Data management, workflow and reporting under the lens. LPEA PE tech user & provider insights

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Data management, workflow, and reporting trends and practices were scrutinised by roundtable participants at the November 2023 PE Tech Day. The discussion, moderated by GOVERNANCE.COM’s Co-Founder Bert Boerman, covered key topics such as data aggregation and connectivity, process automation, and the perennial debate over “buy versus build” in software development. Read on for insights!

Optimising data aggregation and connectivity

Key obstacles to optimising data aggregation and connectivity the participants observed include efficiently managing spreadsheets and ensuring data is investor-friendly. Best practices leaned towards more upfront investment in proactive data governance and design to avoid burdensome data cleansing later.

“Nobody realises how bad the data is!” was a statement shared and supported amongst several experts calling for more of an upfront focus on ensuring only quality data is input into any data governance system. Similarly, participants recommended thoroughly analyzing data and ensuring a complete understanding of the data’s future application(s) before selecting a technology. Companies must remember the basics, like proper data governance, mapping, and data dictionary creation.

According to several roundtable contributors, the current tendency amongst PE firms favours collaboration with a combination of specialised external providers for tailored digital solutions. A “best of breed” over a “one solution” for all approach was becoming the trend.

Generating value through process automation

Another discussion theme was on getting the best value through data management. Participants stressed the need to highlight how data can be helpful in different ways and to carefully examine and understand what data could potentially be used for once collated.

They emphasised that understanding what the potential multiple use cases are for data management can help advocators promote new tools internally. For example, process automation technology could be used to standardise and automate back-office procedures, and the same technology could be applied to generate similar efficiency gains in other parts of the business, such as in the front office for investor relations.

Visiting the classic “Buy Versus Build” debate

The “Buy or Build” debate was also a hot topic. The consensus was that there continues to be a market shift away from building all technological solutions in-house and towards a more flexible approach. This trend sees a mix of external “off-the-shelf” pre-built solutions with high “configurability”.

Some PE tech users want to bring solutions back in-house at a later stage. Still, time has proven this is not straightforward due to internal decision-making, risk and accountability challenges.

PE firms seek a collaborative, specialist-driven approach to tech adoption

In conclusion, consensus leaned toward a collaborative, specialist-driven approach to data management, workflow and reporting technology for PE firms. The lens highlighted the importance of upfront investment in data quality and governance design. Risk mitigation, as well as capacity savings, would continue to urge PE firms to include tech in their strategic investments.