According to a recent article in the ILPA newsletter Private Markets Edge (Q2 2021 issue), nearly 75% of member respondents reported being less than fully satisfied with their current array of technology, despite ever-increasing spending levels. The survey found that limited partners had four main challenges in making technology changes:

Defining objectives: They underinvest in an upfront diagnosis of their issues, fail to consider people and processes, and don’t define success.

Understanding choices: With a mind-boggling number of vendors and functions served, it’s nearly impossible for ad hoc firm teams (typically investment folks, not technology/operations) to manage a search in addition to their day jobs!

Integrating systems: Even after getting the right system for a primary need, integrating it with legacy systems/data often brings process optimization to a halt and undermines adoption.

Managing change: Designing new processes to take advantage of new technology and building/hiring new skill sets to take advantage of new system potential is often an afterthought – leading to not realizing the full value of the investment.

Buying a new system is indeed a huge undertaking, and it can be overwhelming – and ultimately unsuccessful – if not done with much forethought and the right resources. Many firms do not outline a needs/requirements list or even generally define objectives. This is a crucial first step to ensure that you’ve captured not only operational and technology needs, but also the “human element”. One place to start is with First Rate Vantage’s “CHECKLIST FOR QUALIFYING VENDORS & TECHNOLOGY”, but there are many sample checklists or similar (i.e. RFPs) available online.

There are many system choices and if you’re an investment professional, it’s important to also have tech/ops colleagues on the selection team. In sourcing system candidates, start with investment tech directories such as Capterra, Bob’s Guide, or Wall Street & Technology for a trove of information and vendor reviews. Responsible, buyer-focused vendors should also serve you well – a consultative vendor team has nothing to gain by trying to “sell” you if your needs don’t align with their system and service. Look for honesty and objectivity in every interaction, and check references!

When it comes to system integration and change management, choose a vendor that has the size, experience, and teams (i.e. implementation consultants, etc.) to truly be a partner with you in every step of what can be a long journey to attaining your definition of success. At First Rate Vantage, we’re proud of our long history of serving hundreds of investment firms with a consultative, buyer-focused approach that makes you the hero of your new system story.