In the rapidly evolving landscape of private markets, data plays a pivotal role in driving decision-making and ensuring long-term success. Many asset managers overlook the importance of establishing a solid foundation for managing their investment data with technology in the front, middle, and back office. The process of collecting data, normalizing it, and gaining valuable insights from it is often riddled with obstacles, beginning with the implementation of technology solutions. Depending on the scope of an implementation and the state of existing data, these projects can be time-consuming and costly, often creating unexpected discoveries along the way.
John Coleman, Product Owner of Global Private Equity Deal Valuation Technology at The Carlyle Group, a $381 billion asset manager, shared valuable insight in a recent episode of the podcast Data Disruption on the critical factors that contribute to successful data implementations. Exploring strategies for successful implementation helps build a solid foundation for data-driven endeavors.
Strengthen Alignment & Buy-In:
One of the initial steps in any data implementation project is to ensure alignment among everyone involved. It is crucial to establish a shared understanding of the project’s objectives to avoid wasted efforts and delays. A lack of alignment can result in different teams having conflicting opinions and priorities, leading to overcomplicated solutions. Moreover, Coleman notes that losing buy-in from the business and its users hinders the success of implementation and “it’s really hard to get back on track once that’s done.” Therefore, taking the proper time to build out the right project upfront helps fast-track creating the add value for the company, and getting a return on investment from the product.
Private market investors need robust change management practices when embarking on a data implementation journey. This involves defining data sets, data definitions, and change controls within the organization. Establishing a change management review committee comprising subject matter experts ensures that proposed changes align with business requirements and minimize unintended consequences. This proactive approach prevents issues from post-implementation and helps maintain data integrity and user satisfaction.
Set Realistic Timeframes:
The timelines for data preparation vary depending on several factors such as the current state of the organization’s data, complexity, and any recent mergers or acquisitions. Coleman recommends “standards across your business for your technology to actually be scalable and for it to function.” To build a scalable and effective data solution, organizations must allocate adequate time and resources to cleanse, organize, and define their data sets. While the timeframe can range from a few months to a couple of years, starting early is recommended to leverage the power of data in making informed business decisions.
Use Software as a Conduit, Not a Solution:
A common misconception is that technology alone is the solution to all data-related challenges. However, software serves as a tool or conduit to enable effective data management, rather than being the foundation itself. Coleman says building a solution on a weak data foundation is akin to constructing a house on an unstable base — it is bound to lead to subpar results and “it’s not actually going to solve your end goal.” Organizations must focus on strengthening their data foundation before implementing any technology, ensuring that it aligns with their long-term goals and requirements.
Provide Stakeholder Awareness & Expectation Management:
Effective communication and stakeholder management are crucial throughout the data implementation journey. Provide stakeholders and business sponsors with a clear understanding of the implementation process, including the agile project framework, expectations, and their roles. This awareness helps stakeholders contribute effectively by providing feedback, testing solutions, and aligning their expectations with the project’s progress.
Building a strong foundation for data implementations is essential for private market investors aiming to harness the power of data effectively. By prioritizing alignments, establishing a change management review committee, looking at timeframes, and providing stakeholder awareness, investors can set themselves up for successful and impactful data-driven endeavors. Investing time and effort in establishing a solid data foundation ultimately leads to improved outcomes, cost savings, and a higher return on investment. Take the time to lay the groundwork for success and unleash the power of technology.
To learn more, listen now: Unleash the Power of Technology: Strategies for Smooth Implementation
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The material discussed is for informational purposes only. The views expressed in this material are the views of the author and are subject to change based on market and other conditions and factors, moreover, they do not necessarily represent the official views of Mercatus and/or State Street Corporation and its affiliates.