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Why Opt for Investment Management Software?

August 6, 2019 2:00 PM By Paul Barchitta

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Real estate investments, in general, have consistently respectable returns. That’s not to say that a 10-20% return is guaranteed, but if your numbers are looking good, why do you need to invest in better Investment Management (IM) technology? After all, if it’s not broke...

Things that were discretionary before—software, data analytics—are now a necessity for investment firms and their investors today. To be more competitive in the marketplace, your investors are going to want to see that you are making use of all your investment data with the latest technology, and that they are satisfied with any specific reporting needs. This is a core advantage of utilizing Investment Management software and why you should invest in it.

When Should You Implement IM?

Like the old Chinese proverb, “the best time to plant a tree was 20 years ago,” the best time to implement IM software is now. Mostly all Investment Management software these days can manage, maintain, automate, and calculate whatever you need if it has all the required data to do so. Whether your firm has been around for 20 years or 2 months, you will continue to create more and more data that will eventually have to be set up within an Investment Management system. Therefore, the sooner there is a decision to move forward with Investment Management software, the better.  

Implementation Step One: Locate + Normalize Data

The first step in an IM implementation is to locate and normalize your data. Take an inventory of where all your data is. Oftentimes, a lot of data is in Excel spreadsheets—or even locked away in filing cabinets, so it’s difficult or impossible to analyze it as it currently exists. Getting your data into a “consumable” space is commonly the first challenge. Normalizing data will allow you to do the following:

  • Reduce duplicate information. If you don’t already use a deduplication tool, then normalizing your data first will bring to light any duplicate information, allowing you to remove it from your database.
  • Improve the ability to segment leads, which is especially useful for your marketing team. Since lead verbiage can be different from company to company and from industry to industry, normalizing your data can standardize any incoming leads, simplifying the process for your marketing team. 
  • Increase performance and metrics. Management fee and distribution waterfall calculations can be tricky and incorrectly interpreted via various types of operating agreements. Sorting unstandardized and/or mismanaged data can also be time consuming. Normalizing your data saves time, and allows you to identify at an early stage missing or incorrectly managed data that needs to be updated prior to a software implementation. 

Implementation Step Two: Organize Your Data

Once you’ve located and normalized your data, it’s important to understand how you should organize your data. Let’s be honest: On a scale of 1-10, not being able to find the data you need is an 11+. The best time to set up a system for naming and organizing data is at the beginning of a project, which alleviates the need to go back and reorganize data when you’re already well into that project. Here are the top three things to consider while you’re setting up your systems:

  • When organizing data, consistency and simplicity in naming it is key so that data remains user-friendly. Anyone on your team should be able to use the system to find any needed data at any point in time.
  • Always, always, always make sure your data is being continually backed up to prevent data losses, which can be catastrophic to your business.
  • Continually review and then remove unneeded data so your system remains clean and uncluttered.

Implementation Step Three: Choosing a Software Solution

It’s not easy to settle on a solution, especially when you are moving from traditional Excel-based workpapers or spreadsheets. New software options probably seem amazing and overwhelming, which is why it’s a good idea to engage with experts who can understand your business needs, where you’re coming from, your reporting goals, and help you identify the best fit for your business. 

  • The Yardi Investment Suite: Complete with Investment Management, Business Intelligence and CRM, Investor Services, Trust Accounting, Market Data, Document Management, and Online Learning, the Yardi Investment Suite is a viable one-stop solution to help you run your business successfully and as stress-free as possible.
  • MRI Investor Connect: If you’re wanting an all-inclusive, web-based option for all your investing, analyzing, and reporting needs that also simplifies your reporting processes, then MRI Investor Connect might just be the solution for you. 
  • Juniper Square: Developed for client and investor management, partnership accounting, and investor reporting, as well as including an investor portal, Juniper Square promises to “move mountains” to make you and your business successful.  

Maybe you are already using investment management software. If you’re not, thinking about implementation is the first step towards addressing your investment management needs. We’ve been working within Yardi and MRI’s IM modules since they launched, as some of the earliest adopters. Whatever your IM needs, we’re here to help you along the way.