“The best customer relationship management software for private equity firms is one that works for everyone – from the investor relations team, to the information technology department, to the deal origination group. It has to work across all of a firm’s offices, from the US to Europe to Asia,” says Chelsea Stevenson, in her article “Need for CRM Speed” within PEI’s Fund Administration and Technology Special Supplement 2014.

We agree. The ideal scenario for CRM is when everyone in the firm uses it.

However, the ideal scenario isn’t always achievable.  Private equity folks are often too busy to worry about getting trained on a CRM system.  Larger firms have teams across continents, making it challenging to get everyone to be enthusiastic about a certain technology.  In situations like these, the CRM decision inevitably gets postponed.

It shouldn’t be an all or nothing approach.  Firms are competing for investors or for investments, and the cost of a single lost opportunity, due to inefficient processes, can be high. There should be more than one way to skin the cat, if everyone in the firm isn’t enthusiastic about a CRM.

What usually stalls a CRM decision, is the perception that CRM is expensive. GPs as well as LPs worry about CRM being cost-inefficient, as Chelsea’s article points out.

“The State of New Jersey Division of Investments does not have a CRM system, says investment director Christopher McDonough. “It’s something that we have discussed internally, but it would take a significant effort to procure and implement a system and we don’t have the resources to dedicate to that type of project.”

The worry is that CRM has to be done right and doing it right requires a significant investment of time and money. These concerns have been fueled by a combination of legacy CRM vendors and systems integrators – the former charges an arm and a leg for outdated software and the latter makes money fixing the software.

The reality is that CRM isn’t that complicated or expensive anymore, as Navatar has proved.  Gone are the days of writing big checks for software. A CRM pilot can be done very easily with minimal cash or time investment.  So, if a couple of dealmakers are looking for a tool that can help them process deals faster, but the rest of the firm doesn’t really care, the dealmakers can easily take advantage of CRM for themselves, rather than trying to convince everyone in the firm to adopt it.  It’s possible because of the low cost and low risk involved.

Quite a few tech-savvy funds have already figured this out. As the article points out:

“Navatar appeals to both mid-market firms and large buyout funds. Chicago-based High Street Capital employed the CRM in 2010, while Austin-based Blue Sage Capital took the system on last year. Some of Navatar’s larger users include Cerberus Capital Management, CCMP Capital and Lone Star Investment Advisors.”

That is good news for GPs and LPs. They can still have the ideal CRM, with the entire firm on-board, but they don’t necessarily have to do it in one stroke.  If one group within the firm experiences success, others will follow.