Leading GPs, LPs, and advisers share key insights with DealCloud on the opportunities that new datasets can offer, and the emerging challenges that exist.
Does the mere availability of data make life easier? Does our ability to mine new datasets mean we can do more in less time? We recently co-hosted a webinar with Real Deals titled Deal-making and Data: How Capital Markets Firms are Automating and Optimizing Data for the Future where we explored the evolving role that data can play, how it’s changed in 2020, and the ways to approach data so that your organization can, in fact, benefit from it. The key learning is that while data has undoubtedly taken center stage across the world of private capital, a lack of proper data management can erase any potential benefits.
Below are several insights shared from Axel Wehtje, Partner at Park Square Capital, Chris Kindt, Director, Portfolio & Data at Hg, and Richard Lee, Associate Director at KPMG. These leaders have employed extensive data management strategies in their respective organizations and have seen firsthand, through years of trial and error, what works and what doesn’t.
“Culture is king! If the organization doesn’t understand why it matters or the role everyone needs to play, it’s over.”
- Richard Lee, Associate Director at KPMG
Change management is perhaps the most important component for effective data use. At KPMG, we use data across all areas of the business – to improve efficiency, support decision making, and simplify the work that needs to be done. But the value of that data is only as good as what you do with it. If you don’t make it easy for people to understand and embrace and add to, they won’t. And all of those opportunities for additional data points – such as meeting notes and personal experience with certain deals, companies, or partners – will not be captured. This puts your organization at a disadvantage.
While we take a top down approach and embrace one-on-one trainings to make sure data adoption techniques stick, there’s an altruistic element that should be realized as well. Employees need to recognize how playing a small part can have a strong multiplier effect for the whole organization. Involve your staff, make them part of the decision-making process, and get them on board with how you consume and learn from the data. Ensure they understand the value and are committed to taking the time required to go that extra step and input data into your systems. This starts with proper change management.
“Data capture should be easy, frictionless, and simple. Don’t make it more complicated than it needs to be.”
- Axel Wehtje, Partner at Park Square Capital
Quite simply, if data hasn’t been added to the system, it doesn’t exist. It has no benefit. The number one reason that data is not often added is because the means for doing so are not intuitive. And if data capture and digestion are not easy, the company is at a disadvantage.
We are always looking at different ways that we can make it easier for people to contribute data, because if it’s not done now, it’s only going to get worse. This year has introduced a multitude of new datasets as a result of so much information being collected digitally. Once people start traveling again, we need to make sure that data is still inputted, and we don’t fall behind.
Lastly, data should enhance what we do, not replace it. Working effectively and accessing the benefits of what data has to offer starts with ensuring data capture infrastructure is seamless and has broad appeal. Without this, it’s hard to imagine an effective way to tap into the data we now have access to.
“Find the right datasets, fail fast, and continually look for multiple sources.”
- Chris Kindt, Director, Portfolio & Data at Hg
There is so much data that we can now harness, but if you get stuck reading the same public sources such as Debtwire, Bloomberg, etc., you’re limiting your potential advantage. While what we do with the data is more important than the data itself, you still need to start from the right place and take a disciplined approach. We are always testing new datasets and can have upwards of 20 different datasets at any one time, which reflect a mix of publicly available and proprietary information. It’s this combination of experimenting and using different datasets for different deals that, at least for us, has led to a winning formula.
Additionally, know that many datasets don’t work and won’t give you what you are looking for. It’s important to fail fast and move on. Don’t just stop with what seems like it may be interesting – especially if it’s something that your competition has access to as well. You also can’t just hope that people adopt the tools you have; communication and understanding what you use those tools for, is key.