Leading for Success: Finding Your Answers, Part I

How can private equity firms benefit from accessibility, interactivity, and visualization of their data?

To explore current trends around data and information solutions in the private equity marketplace, we interviewed Jeff Williams, VP of Products at Altvia. The discussion will be presented in a series of blog posts in order to capture a more inclusive view of this trending subject. Thanks for joining us to discuss what private equity firms need to know about data. Let’s start with a quick introduction: tell us a little about what you do at Altvia.

I lead the team that attempts to discover and find problems that we believe are worth solving with technology for private equity firms. Specifically, we’re interested in solving problems or issues that help private equity firms differentiate themselves and become more operationally efficient, and solutions that provide better services within private equity firms’ ecosystems.

What is currently trending around technology in the private equity marketplace? What are people talking about, and which solutions do they need?

As it specifically relates to problems people are having pertaining to technology, or problems that technology can help to solve, the big trends center around data. On a strategic level, how to store, accumulate, and analyze data is a big topic right now. And there’s a bigger conversation about relationships with limited partners regarding the ability to service them and be good partners, which manifests itself in buzz words like transparency. But at a relationship level, it’s more about how these partners interact with each other.

The importance for firms to improve their service interactions with stakeholders is top of mind?

Yes–at the end of the day, private equity is a market that provides financial services. A lot of conversations lately are about the service itself; more specifically, what service is actually being provided. When you look at service industries, they are traditionally driven by incremental steps of differentiation: How can they provide something better or different than their competitors?

Altvia recently launched a new data solution: Altvia Answers. From the perspective of a private equity firm, what exactly does Altvia Answers do?

Altvia Answers is very much a solution for the data problems we’re hearing about. For the better part of the past 10-20 years, this industry has been active in using technology to generate data, and more recently, to consume additional sources of data. We’re at a point where older firms have accumulated data much less methodically than firms that are starting out today, and this reveals several important considerations:  

  • Firms that have been in business longer have ended up with multiple systems along the way, and there are often no integration points between those systems.
  • Those systems, on their own, are often times not capable of doing much with the data within them, nor are they capable of performing the complex analyses that are now needed.
  • The capabilities of modern technology within the realm of data (what’s possible to query, management of large volumes of data, and making sense of all the data) are not things that have been built into systems that firms have accumulated.

In a nutshell, people have systems that don’t interact, even though they’re relevant to each other. Firms would like to look at the data within them together, but there are tremendous inefficiencies with trying to bring those systems together, showing a lack of capabilities of these tools on their own. Altvia Answers is a solution that solves the entire chain of these issues by bringing data together from disparate sources into one place, then modelling the information together to establish a single source of truth for all of your data across all of your systems. Even better, Altvia Answers connects to the data systems already in place, with no need to export or upload information, simplifying the process. It facilitates very powerful and very modern data capabilities in terms of analysis on a large scale, and it does that in the cloud in an automated fashion so there is no need to embark on manual, time consuming, and error prone processes. And, most importantly, Altvia Answers provides the ability for business users to interact with their data across systems in very intuitive ways, and on any device, eliminating the need for highly skilled, IT-centric resources that would historically have spent weeks at a time developing an analysis. Altvia Answers is right at the fingertips of business users and executives at any point, ready for them to ask their own questions and get their own answers in an engaging and intuitive way.As you’ve been instrumental in developing and launching this new product, we’re guessing you have some great stories about how Altvia Answers works specifically to help private equity firms. Could you share some examples?

One particular organization had spent nearly two years assessing vendors in an attempt to find a solution that could deliver on the vision they had, which they felt was not only compelling, but also very different from their competition. They were looking for a solution that would allow them to really provide a service that was highly differentiated, unique, and superior to their competition. After assessing dozens of vendors, they found a few that came very close to their criteria, but there was always something missing from the bigger picture. As we got to talking with them and understanding their vision, what we were able to do with Altvia Answers was allow them to identify the best of breed, best in class solutions across the entire chain of systems involved in executing their vision. This allowed them to use the best CRM solution, then put Altvia Answers on top to connect their entire system. Now entirely connected, this system provides that firm with a single place for business users to go in order to find and understand data across their organization and system. After a lengthy assessment of many different vendors, Altvia Answers provided them with a revolutionary concept that confirmed it is a complete solution to these problems.

Altvia Answers helps firms position themselves as industry leaders?

Correct, and a big part of it is not only the ability to consume data across their system internally, but also to begin to allow their clients themselves to access important, real-time data that is relevant to them. It went from a matter of “we’ll send you a statement in the mail every so often” to “you don’t even need to pick up the phone to ask us, you can just access the info that’s relevant to you in real time, at anytime“ in an intuitive, efficient, interactive and engaging way.

It’s having a snowball effect on their whole business structure?

Yes, Altvia Answers is helping to provide more efficient internal operations that are more organized and more systematic. This snowballs all the way through to providing new capabilities to their investors, which in turn strengthens their relationships and positions them as industry leaders.

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About Jeff:

Jeff joined Altvia in 2011 and leads Product Management and Marketing. Prior to joining Altvia, Jeff spent nearly four years as an Analyst and Associate sourcing and evaluating investment opportunities in venture capital funds and late-stage venture financings in private companies. He was also actively involved in the fundraising process and used AIM extensively to manage both the fundraising and investing processes. Outside of work, Jeff enjoys skiing and playing golf.

A traditional crm was built for general ‘customer’ scenarios

Software platforms have made the world a better place by making work a better place. Indeed the world is better off when people enjoy their jobs even marginally more, and workplace applications on big CRM platforms like Salesforce.com have done that and much more.

But the potential that platforms like these offer presents diminishing returns: once the platform provider has engineered too many industry specific components into its platform, its usefulness for other industries begins to be threatened, and with that so do the usefulness of the component tools built into the platform.

So it is with the CRM category that Salesforce.com has defined: it is generic enough to work for many industries, and yet still offers the potential for others to round off the edges and nail more vertically-oriented and extremely tailored software solutions.

Private capital markets are actually a great demonstration of this dynamic. Where generic CRM platforms simplify — appropriately so — to assume there’s a business, a customer, a sale, and service of that customer, there are a few industry-specific pieces that are missing.

Take for example, that investors become customers by investing through legal entities the GP raises. It’s a subtle but important nuance that just doesn’t make sense at a platform-as-a-service level (because it’s overly complicated for a simple one-time sale that many industries require), but which can easily be added without 10 years or software engineering. Once provided, the rest of the platform’s components become tremendously powerful again and you’re set to take over the world.

As a traditional CRM in our pillars methodology, these nuances must be present to properly account for investors in these legal entities, potential target companies and which are owned by these entities, the context of all interactions with these parties (as well as the appropriate overlap, ie co-investments), and how you’re arriving at finding these opportunities on both sides of the equation, such that you’re able to piece together what’s effective and what’s not. Not just because we say so, but because these are the very relationships and data that are key to the motivation behind a CRM in any industry.

It’s critical, too, that the valuable publicly-available information that helps to enrich CRM systems and save users painful steps of entering it themselves is fully-integrated at the platform level.

Again, look no further than the 3,000+ pre-built integrations that Salesforce.com — the creator of the CRM platform concept — has at a platform level to do so, and which only exists by way of holding just short of overly-specifying certain industry workflows that would present challenges to properly integrate.

Stakeholder reporting and communication (investor relations) draws on a range of datasets

The traditional “customer service” model of CRM systems once again makes overly-simplified assumptions about the customer relationship when applied to private capital markets.

In fifteen years I personally have yet to hear the terms “warranty” or “service call” in this market because it’s just not the same. But make no mistake, as uncomfortable as it may be to say aloud, customer service is more important now than ever and it’s constantly happening; the industry is, after all, considered to be a financial “service”.

As it turns out, that service is primarily information-based — it’s driven by data and takes the form of reports and analysis that drive decisions, and then end up again in investor-facing reports and analysis.

The foundational elements of a private capital markets CRM must be built such that they accommodate this data (like we discussed above), but so too that it can accommodate additional supporting data that investors (customers!) need in the context of service.

Oftentimes this supporting data — financial metrics and time-based values, for example — is believed not to meet the traditional definition of CRM and the natural thought is “well, better do this in Excel!”.

While I happen to believe Excel is still the greatest software application ever built, its introduction to this value chain we’ve discussed herein actually creates the problem many firms suffer from: key data needed to provide customer service (again: effectively the entirety of a firm’s reports and analysis) is now in disparate systems and detached.

Both of those dynamics are important and distinct: not only is this supplemental data disparate, but when brought together there is no logical association that can be made between the two data sets.

Allow me, then, to make the point very simply: not only can this financial and time-based value data (you may be thinking about is as “portfolio monitoring” or “accounting”) be a part of a CRM, it is arguably the most important part of a CRM because it’s at the core of what providing service to the customer entails — information that comes out of data!

Firms need a digital method to engage stakeholders (ie investor portals)

Investor portals are not new; in fact, for many of us — including myself — they conjure up horrifying nightmares in which we’re aimlessly guessing at folders to find the newest document we need.

So in lies the opportunity: not only have the portals we’ve come to hate not simplified the process of acquiring information, they’ve failed to create an entirely new experience that is “customer service” driven.

To be fair, this is not a B2C market where you’d be long out of business for not having focused on customer service and thus the customer’s technology-driven experience. But don’t expect to be around too much longer if you aren’t thinking about this shift.

Today’s institutional investors increasingly expect this same consumer-like experience, and a massive opportunity is being missed by not providing it. It’s not about providing them the experience they desire; it’s more about the ability to measure engagement that is had in return.

Put simply: what’s keeping the market from providing this experience is the availability of the information that’s required to create the service that provides the experience.

If you’ve hung in this long, you know that by focusing on your CRM, you have the data that’s required to manage the customer relationship and the technology-driven experience through which that information is shared to create a differentiated and opportunistic customer experience.

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