The Role of IT Director in Buying Fund Management Software

Because SaaS (software as a service) products are, by definition, hosted remotely, and often supported remotely as well, the role of IT in researching and evaluating options is growing increasingly unclear. 

Fund managers in the market for new fund management software—or any SaaS offering—will often send a member of their IT team out to evaluate the market and determine the best options. 

Frequently it’s the IT director. Why? Well, it’s a technology solution, so who better to assess the contenders than the person at the top of the IT group.

However, that approach exposes firms to a potential pitfall. And it’s a significant one—one that can haunt them for years after they make their purchase.

The IT-Only Approach to Purchasing Software

There are many types of solutions that an IT director can assess on their own and approve for purchase. Often, they are infrastructure-related systems about which the director is the firm’s top authority.

Fund management software is another beast altogether. The problem with putting the IT director on point for your software selection process is that they typically look at products primarily or exclusively from a technical perspective. You can’t blame them—technology is their thing.

Unfortunately, with this approach, the end-users of a software solution may not even be brought into the conversation until a short (sometimes very short) list of potential providers has been created. That means users don’t learn about products that have excellent functionality but have been excluded from the list due to some technical issue, and potentially an issue that really wouldn’t negatively impact the value of the solution to the firm.

In other words, an IT director may be inclined to “throw the baby out with the bathwater,” which leaves the firm with a product that isn’t ideal but that they’ll now have to live with for the foreseeable future.

The User-Only Approach to Purchasing Software

So, if the IT director’s software selection criteria may be skewed toward the technical aspects, a better approach is to let users make the decision without IT’s help, right? 

Especially since the whole point of cloud-based software is to remove the technology from the premises, meaning there isn’t much for a SaaS provider and an IT director to talk about anyway. 

Actually, users have their own biases and blind spots, as well. And because SaaS solutions are “technology”, input from IT is still important and valuable. 

A fund management software solution that has all the “bells and whistles” a fund manager could ever want but that doesn’t play well with other applications, for example, is not going to provide the kinds or degree of benefits a firm is looking for.

The Middle Way to the Right Fund Management Software

It will come as no surprise—particularly on the heels of the previous two sections—when we say that we have found that the most effective fund management software evaluations are performed not by one person from a particular department, but by two people from different departments working as a team.

Specifically, having the IT director and someone from the fund management group work together is ideal. The IT director still must be involved in evaluating the viability of a SaaS platform in terms of attributes like security, uptime, and performance. IT might also evaluate the possibility of integrating a new solution with other systems already in use. 

The fund manager can weigh in and judge each solution based on other aspects such as functionality, usability, the extent to which it matches (or can be made to align with) existing processes, the industry knowledge of the support staff, etc. And this is no ceremonial “final blessing” authority. A fund manager should be involved in the search right from the start. In fact, there’s nothing wrong with the manager observing the assessment that the IT manager makes. Doing so will only make them that much more helpful in future software evaluations.

Fund Management Software Selection: A New Skill on the IT Director’s Resume

Keep in mind that researching SaaS solutions (as opposed to on-premises solutions) and being involved in the buying process may feel odd to the IT director and others in the department. “If it’s hosted remotely and doesn’t affect any existing systems, why should we care?” is a common way for IT to look at this process.

But the job of IT, especially as SaaS solutions have become the dominant type of system, is less about racking servers and more about helping the organization find technology that makes the business more successful. 

So, if you’re looking for fund management software, get your IT director and fund manager together and let them know that their insights and input will be vital to finding the ideal solution.

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 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 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 — 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.

fund management software