Moving to a private equity platform is a great first step for any Private Equity firm but the utility of having a place to aggregate data can be significantly diminished if the data isn’t reliable.
Many managers assume that giving their employees a CRM tool will solve the old problems of storing all their information in Excel and Outlook, but without reliable information, for investors and analysts to use, private equity firms run the risk of making poor business decisions, providing sub-par client service leading to a lack of trust between the firm’s personnel and the CRM system.
So what can be done to counter this outcome?
The first step in maintaining data integrity is prevention.
It must be understood all throughout the firm, from partner to intern, that the CRM system is the system of record; there should be no alternative databases where employees store data.
There is the point of 3 users using the system to the fullest if 1 user is still storing their contacts in Outlook. It is important to remember that there are tools to bridge platforms like Outlook with your database and taking advantage of this type of technology can go a long way towards keeping your data up-to-date, accurate, and standardized in the system.
The second step is monitoring your data. Even the most diligent of users can miss duplicates or inaccuracies in the system and it is a lot to ask of your users to make sure their information is unique every time they enter data into the system.
Periodic checks by select members of your team, however, should ensure at least confidence by the other users.
Whether you are a smaller firm that must monitor hundreds of records per month or a much larger firm with tens of thousands of records, there are tools to keep tabs on your data integrity.
Lastly, whether you followed the first steps or completely neglected your data, you should have a plan in place to regularly clean out your CRM.
There are many programs and apps out there that will do this with the minimal technical knowledge needed and take no time for users to compare information across fields and records.
You might cut your contact list in half but the data in your system will be up to date, accurate, standardized, and non-duplicated.
The cost of bad data is much higher than any product that can solve it. Over time, if data is not kept in check it could lead to poor decisions, and unproductive work atmosphere, and in the end, an ineffective software investment.