Patty Esslinger is vice president and head of product for Trove, a multifamily office. She joined about a year ago and has been evaluating technology needs for Trove and its clients. She discusses issues family office leaders should consider when evaluating technology:
How can a family office tell when it’s time to consider a technology upgrade?
A lower-end system can work really well for smaller organizations, but as you start to grow and scale, systems built for simple structures or low volume tend to slow or burst when introduced to complicated entities or high-volume user load. If you’re forcing systems to work beyond their design or creating numerous processes to make them fit, it’s time to upscale.
Take a step back and identify whether the challenge is due to 1) inadequate training, 2) inefficient processes, or 3) a system that does support the effective operation. Depending on your goals, you may need to address all three matters during your technology upgrade.
What issues should family office leaders consider when embarking on an IT project?
There are multiple layers to consider when you’re looking at big or small transformations. Leaders need to document and communicate their plan to the appropriate stakeholders and ensure they’re considering the impact each decision has on the end users and throughout the business. There’s a lot of planning that you really have to think about. It’s a big mapping exercise using a well-thought-out roadmap.
Often, implementing new technology involves more than one system. You have to kind of take a step back and assess how and if these systems will integrate. Are there pre-built integrations that are already there? Or do you need to go and hire someone that’s going to come in and have to build an API?
Another factor to consider, if you’re looking to phase in multiple systems, is to be mindful of your roadmap and the impact future systems may have on the current structure. For instance, enable the appropriate data fields and prioritize your roadmap to avoid technical debt and near-term missteps. This approach ensures that, when integrating new systems in six months, there will be limited need for extensive reworking in either system.
What are potential pitfalls of technology projects?
Technology is a disruption: to the clients and to those implementing or learning a new system. It’s disruptive to the old dogs that must learn new tricks. It can also be a time-consuming effort to migrate data from old systems to the new systems.
Implementing new technology can be costly initially, since it involves hiring trustworthy consultants and/or full-time employees, paying implementation fees and investing time in training teams on new processes and change management. When considering the cost-benefit analysis and return on investment of this new technology, it is important to determine whether it reduces staff hours, creates a more scalable business process, and allows employees to focus on higher-value tasks while delivering value to clients.
If you successfully navigate the pitfalls and focus on the upside, then the juice is worth the squeeze.
