Next Steps: When a CRM Doesn’t Work for Fund Management

Here’s a scenario we often encounter: A fund manager spearheads an initiative to implement a customer relationship management (CRM) system as the tool they’ll use to manage their fundraising or investing. 

They heard—from their peers or the CRM software company rep—that this system “does everything!” They get promises that it will solve all of their problems as soon as they get it up and running, and can’t wait for that to happen.

Fast forward to six months after implementation: The system sits idle, or at best, is used in only the most rudimentary way. Users are frustrated, but the fund manager and the firm vow to truly focus on making the CRM a valuable tool soon. So, management renews the software contract for another month or two.

“Maybe we can have an intern take a stab at getting to know the system and teaching us how to use it effectively,” someone says. But, of course, that doesn’t happen. And, ultimately, the firm starts thinking about getting rid of the CRM altogether and going back to using spreadsheets as a poor alternative to fund management software.

Fund Management Software: Designed for Tasks a CRM Can’t Handle

The scenario above isn’t the CRM’s “fault”—or the fund manager’s fault, for that matter. Most CRM systems are highly customizable, so when someone at a firm hears that a particular one “does everything,” itt’s not too hard to believe. But, even so, the firm is now back to managing its stakeholder data in an inefficient, ad hoc way.  

Our recommendation to firms that reach this point violates the business truism that you shouldn’t “throw good money after bad.” But, if that capital is going to deliver a positive outcome, then it’s money well spent, and firms can be forgiven for breaking that rule!

The reason that a CRM investment doesn’t work out is, in nearly all cases, because 1) the decision to purchase it was made hastily, and 2) CRMs lack functionality firms need. When organizations fail to think carefully about their requirements and how a system will meet them, bad things tend to happen. 

Important Questions to Ask Yourself 

If you’re looking for true fund management software—particularly after a CRM implementation that didn’t work out—it’s important to ask yourself a few key questions; 

  • Why do we need fund management software?
  • What issues will the right solution solve for us?
  • What features and functions will our users need?
  • How can we ensure that everyone who uses the system has a chance to provide input on how it’s configured?


Just by answering these questions before starting your search, you’re in a far better position than you were when you purchased your CRM and quickly brought it online. When everyone involved in the buying and launching of an advanced software solution is on the same page and working toward the same goal, you greatly increase the odds that the new system will provide the benefits you’re hoping for.

Other Keys to a Successful Software Implementation

It’s also important to get buy-in from executive sponsors who know what you want to do and why. And the second half of that sentence is important. It’s critical that your sponsor(s) understand your goals and how your new system will help you meet them, rather than just blindly approving your purchase request.

And, finally, you should have a plan in place for ensuring firm-wide adoption of your new fund management software. If you didn’t have a strategy when you implemented your CRM, that could be part of the reason you’ve now abandoned it. “Change management” is an essential element of any type of software implementation.

Moving beyond a CRM-only approach to fundraising and investing, and implementing purpose-built fund management software, is crucial if you want to be successful in today’s competitive business environment.

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.