Modernizing your family office operations and technology can feel overwhelming at times. A key aspect of modernizing is updating your technology capabilities. This article delves into how to better select new technology, mistakes that are often made and how to more successfully adopt new technology.  

This article is based on a podcast interview Mark Wickersham had with Erin Hulse, CEO and Founder of Deviate Consulting who has spent decades working with family offices on technology selection and implementation.

Common Selection Mistakes

One common error is that family offices are not doing your homework before getting vendors involved. The vendor selection process is a front-loaded process. Firms need to fully understand what problem(s) they want to solve, what the requirements are to solve those problems and documenting common use cases that detail the functional requirements that need to be meet.

• Overlooking Detailed Requirements: Failing to articulate detailed requirements can lead to purchasing systems that don't meet operational needs.
• Ignoring Product Fit: A great sales pitch doesn't guarantee a good product fit. Sometimes a vendor can engage well but may not provide the best technology solution for your specific needs.
• Evaluation Fatigue: Firms can rush the vendor selection process in order to get back to work. It takes away from the day-to-day work at hand, and as such, firms can hurry the process and not perform enough demos or fail to ask detailed questions.

Mistakes like these can cause downstream issues after when it comes to implementing the system you just selected. This can lead to frustration both internally and with the newly selected vendor. It is also an area were a consultant can add a lot of value.

Benefits of Using a Consultant

Outside technology experts can play a beneficial role in guiding family offices through the rapidly changing landscape of technology choices and conducting comprehensive evaluations of potential vendors. 

• Market Scans: A good technology consultant consistently stays up to date on the latest market trends and understands the universe of vendors that may be applicable to the needs of the office.
• Facilitating Demos: Consultants can manage the scheduling and execution of multiple vendor demos, ensuring that all relevant features are assessed.
• Providing Objective Insights: They can offer a non-bias perspective, helping to identify which products genuinely fit the family office’s needs.
• Training and Support: Consultants can guide staff through the technical aspects of new systems, alleviating concerns about change.

With the help of a knowledgeable consultant family offices can be better guided through the selection process increasing their odds of a success.

The Importance of Use Cases

It's crucial to consider the practical applications of technology to understand its impact in meeting the operational requirements of the family office.

For example, if a family office needs certain reporting features it's important to know if a system can produce those reports correctly. This lack of clarity may cause issues during the implementation process and may even affect the implementation itself.

• Defining Requirements: Use cases help define what functionality is needed to successfully meet needs of the family office, ensuring that the technology selected will meet those operational benchmarks.
• Identifying Gaps: They allow for the identification of gaps in the vendor’s offering, prompting necessary discussions during the selection process. Is another vendor a better option? Does a Statement of Work needs to be developed that details the work done to fill the gaps? What is the cost and timing a vendor needs to meet these requirements?
• Setting Realistic Expectations: Use cases set clear expectations for all stakeholders, reducing the likelihood of disappointment once the system is implemented.

Integrating real world scenarios into the assessment process helps ensure that any vendor selected will be able to meet the operational needs of the office once implemented.  

Evaluating Vendors: Avoiding Shiny Object Syndrome

Family offices and firms of all types can get distracted by slick product demos and flashy presentations. Evaluators need to avoid the ‘shiny object syndrome’ and focus on what will really make a difference to their organizations.  

• Establishing Clear Criteria: Before engaging with vendors, it’s essential to establish clear criteria based on operational needs. This helps maintain focus during evaluations.
• Using RFIs Effectively: A comprehensive Request for Information (RFI) can filter out vendors that do not meet essential requirements, streamlining the selection process.
• Assessing Long-Term Viability: Consider the vendor's longevity and stability in the market. Newer companies may offer exciting features but could lack the reliability of established vendors.

Ensuring that you stay focused, on requirements when assessing vendors is crucial to guarantee that the chosen technology provides benefits. 

Preparing for Implementation

Transitioning to new technology requires preparation and patience for family offices to ensure a smooth implementation and successful adoption. 

• Resource Assessment: Understanding the availability and capabilities of staff is critical. Frank and open discussions about time commitments can prevent unrealistic expectations. In addition, firms may want to consider bringing temporary outside resources from a consultant or seek to outsource some the onboarding tasks to the vendor.
• Setting Realistic Timelines: Acknowledging that implementations often take longer than anticipated can help manage stress and avoid rushed decisions. While project planning and milestones are important, offices should be flexible when it comes to timing to properly address unforeseen issues. Hard deadlines can cause needless stress and create mistakes.
• Engaging Stakeholders: Involving all relevant parties in the planning process ensures that everyone is aligned and reduces resistance to change. In addition to having buy-in at all levels it is key to having an executive champion as well. The tone and priority need to be set from the top.

By investing time up front family offices can better navigate the pitfalls that can come with implementing complex systems. 

The Significance of Data Quality

Ensuring the quality of your data is crucial. As the saying goes garbage in, garbage out holds true for all types of technology implementations.  

• Data Cleaning: Prior to migration, family offices should invest time in cleaning up historical data. This includes verifying accuracy, consistency and completeness across datasets.
• Understanding Data Requirements: Familiarizing with the new system’s data requirements can prevent surprises during implementation.
• Setting Realistic Expectations: Recognizing that not all historical data may be necessary or feasible to migrate can help streamline the process. The more historical data you want to migrate the more expensive that implementation will be. Implementation timelines can double or triple due to the amount of historical data you are seeking to bring over to the new system.

Top Strategies for Successful Technology Adoption

Effective implementation of technology requires preparation and execution strategies, in family offices to ensure a transition and promote user engagement. 

• Involve Key Stakeholders: Engage all relevant parties early in the process. By including staff from various departments, you can gain insights into their needs and concerns. This helps develop downstream requirements and fosters a sense of ownership over the new system.
• Provide Comprehensive Training: Implementations can be exhausting, but one key area that should not be skipped is training. Ensure that all users receive thorough training on the new technology. This helps mitigate anxiety associated with change and empowers staff to utilize the system effectively.
• Establish Clear Communication: Maintain open lines of communication throughout the implementation process. Regular updates and feedback sessions can address concerns and keep everyone informed about progress and expectations.

Implementing these tactics can greatly enhance the chances of incorporating technology into family offices.

Balancing Operational Requirements with Change Resistance

Finding the balance between meeting needs and dealing with reluctance to change is a crucial element in embracing technology within family offices. The mindset of this is the way we have always done it can prevent family offices from modernizing and cause technology implementations to fail even when they have selected the best system to meet their needs. It's important for family offices to manage the change management process while being aware that your employees may need additional support during this process.

• Assess Staff Readiness: Evaluate the readiness of staff for change. Understanding their mental state and willingness to adapt can guide how to approach the transition.
• Communicate the Benefits: Clearly articulate the benefits of the new system. Demonstrating how it will improve workflows and enhance operational efficiency can help alleviate resistance.
• Provide Ongoing Support: Offer continued support and resources post-implementation. This can include additional training sessions and accessible help desks to address questions or concerns that arise.

By striking a balance between meeting requirements and addressing resistance to change effectively, family offices can establish an environment that is more welcoming to embracing new technologies. 

Conclusion: Avoiding Common Pitfalls

As family offices navigate the challenges of selecting and implementing technology solutions for their operations; it is important to stay mindful of mistakes that might impede progress. By steering clear of these pitfalls and providing proper oversight offices can increase the odds of a smoother implementation process and more successful adoption. 

• Neglecting Change Management: Failing to address the human side of change can lead to resistance and frustration. Develop a robust change management strategy to guide staff through the transition.
• Underestimating Resource Needs: Many family offices underestimate the resources required for successful implementation. Be realistic about the time and personnel needed to ensure a smooth transition.
• Ignoring Feedback: Feedback from staff is invaluable during the implementation process. Actively seek input and make adjustments as necessary to improve the user experience.

Keeping an eye out for these traps to avoid them when it comes to technology adoption and ensuring smooth long-term operations is crucial for family offices' success. 

When family offices evaluate staff preparedness and convey the advantages of the technology while offering assistance, they are able to successfully navigate the fine line between operational requirements and reluctance to change. 

About Erin Hulse

Erin Hulse is CEO & Founder of Deviate Consulting, which focuses on software selection, implementation, and accounting services for single and multi-family offices. Erin founded Deviate Consulting in 2015, and is based in Indianapolis, IN.

Erin works with family office organizations such as Family Office Exchange (FOX) and Family Wealth Report (FWR) to provide industry knowledge via her articles, blogs, and panel discussions.