Family office technology solutions

The art of successful information management

Originally published in Family Office Magazine.

Are family offices that invest in advanced technology better positioned to preserve long-term wealth? Short answer: Yes. However, achieving organizational effectiveness requires enterprise-wide alignment—of people, processes, and data, with the best-fitting software at the helm. Here are five crucial steps to consider when implementing new family office technology.

As family offices face rising expectations from external parties and the families whose assets they manage, a common question is whether technology investments and priorities are suited for the moment. At these pivotal junctions, there are multiple factors that may bring about this reflection. There are evolving tax and regulatory compliance needs that require robust processes, easier access to data, and enhanced documentation. There are also internal pressures from owners and principals demanding more personalized reporting, including insights and analysis into both current and future projected investments. In other cases, the factors comprise a mix of internal and external influences, such as a family enterprise making the leap into adjacent markets or expanding their investment portfolios, triggering a review of technology models.

This white paper seeks to explore the importance of choosing the right technology and operations service delivery model for family offices to promote organizational effectiveness—and support the core responsibility of the family office in ensuring the long-term preservation and growth of wealth.

Key areas of consideration

Here’s a summary of the essential ways family offices can ensure technology implementations meet the family’s needs.

  • Technology selection. When considering tech implementations, family offices must prioritize understanding their specific needs and goals. Identify use cases, reporting requirements, and data accessibility to ensure alignment with objectives. Rather than focus on the technology itself, focus on the core problems the business needs to solve. 
  • Vendor management. Effective vendor relationship management is crucial to successful technology implementation. Establishing dedicated points of contact and relationship managers ensures continuity—and a deep understanding of your system and business. It is important to choose vendors that align with specific needs. By fostering strong vendor relationships, a family office can secure the needed expertise, receive personalized support, and address issues promptly.
  • Data conversion. Thoroughly review and validate data before migrating it to a new application. Identify and address any issues or inaccuracies in advance. Careful review prevents misconceptions or problems originating from the new system, rather than the underlying data. Coordinate with the vendor to establish a data conversion plan that enables smooth testing of the application’s functionality and reduces the risk of data-related challenges during implementation. 
  • Stay firm on time limits. When planning the timeline for evaluating a new technology, family offices should consider several factors. An adoption process may take eight to 12 weeks, depending on the complexity. Negotiations and due diligence can extend the timeline. Then there’s the implementation phase, which can range from three to six months, depending on the use cases and software being implemented. To avoid any misunderstandings or disappointments, it’s critical to start with a thorough selection process that includes clearly documented requirements. Adequate resourcing should also be ensured to support successful implementation.
  • Conclusion: Ensuring transparency across the family enterprise
    The benefit of technology enablement is the ability to integrate technology and data seamlessly. A family enterprise can connect portfolio management capabilities from the front office into its tax and fund accounting requirements and then feed its ability to conduct performance analytics and added reporting. That means not just the organization benefits, but also the family and its individual members. A complete, centralized, and interconnected document management system also strengthens client relationships and embeds data and cybersecurity across the whole technology suite.

Thanks to vendors, family offices don’t need to have all the capabilities necessary to acquire these benefits in-house. When considering an operating model and the technology to implement, strategic thinking is going to set the foundation for a successful transformation.

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