Tag Archives | salesforce for Private Equity

In 2017, Private Equity Faces its Greatest Test Yet

Navatar Helps Private Equity Professionals Win DelasIf you factor in co-investments, separate accounts and direct investments – three channels investors are increasingly using to pump money into the private equity sector – 2017 is shaping up to be a record year for the asset class. The industry is on pace to raise a wallet-busting $691 billion in commitments this year, about 10 percent more than the previous high mark. That’s on top of an estimated $1 trillion in dry powder already waiting to be deployed.

All this capital raising is good news, right? Maybe, because at the same time that cash is flooding into the sector private equity deals are getting smaller. Deals under the $25 million mark accounted for nearly half of activity thus far in 2016, representing the highest proportion since 2009. Observers chalk this up to a number of reasons, including rich stock prices and increased regulatory scrutiny, but our guess is that private equity firms are seeing better opportunity for returns at the smaller end of the market, where greater growth and operational wins are to be had.

Which takes us to a bigger point: it’s getting tougher these days for private equity firms to source the types of deals they want. The problem is that flood of capital chasing smaller deals combined with more competition. During the 15-year period from 2000 to 2014, the number of active private equity firms globally exploded 143 percent to 3,530. Intensifying competition further is a migration of large buyout shops moving down market in search of yield amid today’s low interest rate environment, and other kinds of entities with access to cheap debt, including sovereign wealth funds and pension funds with direct investment capabilities, entering the field.

Continue Reading →

Comments { 2 }

Improve Deal Flow: How Private Equity Firms Should Share Their ‘Sweet Spot’ With Sellers

Deal Sourcing Improved by Sharing Investment Criteria with Sellers

(From left to right) David Mahmood, Chairman & Founder, Allegiance Capital Corporation; Bruce Cameron, Chief Executive, Berkshire Capital; Ulrich Schneider, Partner, Proventis Partners; Tim Page, Managing Director, Whitehall; Martin Stein, Managing Director & Founder, Blackford Capital

Buyers want quality deal flow, but too often sellers don’t have a good sense of their investment criteria.

In fact, these days “private equity firms all sound alike in what they are looking for,” said Allegiance Capital chairman David Mahmood, during a recent Navatar roundtable on “Why Buyers Must Redefine Their Intermediary Deal Sourcing Strategy.”

Given that boutique intermediaries control access to a majority of transactions in today’s deal market, buyers need to build relationships with a large number of boutiques. At a minimum, they have to make sure all these intermediaries know about their current investment strategy, so that bankers and others can channel the right investment opportunities to them.

Here are some of the approaches that buyers commonly use:

Continue Reading →

Comments { 0 }

For Private Equity Funds, Perfect CRM May Be The Enemy of Good CRM

Salesforce for Private Equity

“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.

Continue Reading →

Comments { 0 }

Are You Using an Older Version of Salesforce.com’s Service?

The answer is - it isn’t possible.  ”No one’s ever on an old version of Salesforce.com because Salesforce.com is multitenant, that is everybody shares the same servers, so when those servers are upgraded, everybody’s upgraded.”

So naturally, when a perplexed customer asked me whether “Navatar runs on an older version of Salesforce,” I became very curious about what could have prompted that question.

When the customer revealed that a consulting firm had advised him about Navatar being on an older version, the mystery began to unfold.  Basically, consultants and systems integrators make money customizing software. Some of them don’t like Navatar’s pre-built software for financial firms (built on the Salesforce platform) since it reduces the hours they can bill to a customer. To steer the customer away from off-the-shelf products, they feed false information so they can make money re-inventing the wheel.

This happens often, since the cloud, still in its infancy, is a bit like the wild west. Fortune hunters, such as consultants fixated on their billable hours or software salespeople obsessed with their commissions, sometimes discover easy money by planting fear or simply distorting facts. … when that happens, it is the customer who often loses.

The customer loses because they walk away with the impression that reinventing the wheel is a better and easier option. They end up spending a phenomenal amount of time engaged in system implementation, instead of their core business – in addition to paying thousands of dollars for consulting and support services that are redundant or available for free in the cloud world (see my InformationWeek post:  How to Reduce IT Services Costs in the Cloud).  But their frustration really peaks when, even after all the spending and distraction, they never get a system that meets their needs. They are then left with two difficult options:

a) changing course – switching to a pre-built product, which requires writing off the time/money spent on system implementation (it also requires someone willing to acknowledge their mistake, which is probably a bigger challenge)

b) continuing the reinvention process – assuming, somehow, that they are close to the finish line and finding a different consultant with the hope they can somehow salvage their investment (which inevitably requires throwing more good money after bad).

How to avoid getting into this situation? Read on.

So, should I reinvent the wheel?

Even though there will always be con-artists, having choices isn’t a bad thing. Customers need to be aware of some simple facts that can lead to an informed decision, when they choose between buy versus build, a standard IT industry concept. Build refers to buying some generic software or platform and then using it to build the functionality you need – you also then need to continue maintaining and supporting whatever you build. Companies usually go the build route when they believe their business processes are so unique that they cannot fit any packaged product – some large companies also choose to build since they are heavily invested in their IT organizations that like building systems. A company will buy commercial off-the-shelf (COTS) software, instead of building, if they believe 75-80% of their needs can be met by it (read more about buy vs. build in this article). So, both buy and build are valid options, suited to different types of scenarios.

The cloud offers options between buy and build.  For instance, Salesforce provides a top notch cloud (and CRM) platform, which is sold directly by them as well as by other resellers and OEM partners, through AppExchange and other channels. You can find so many products on AppExchange that can provide you what you need – if not, you can also try to build it yourself using the Salesforce platform (or other cloud platforms). Not every product can be replicated using the build process, but given time and money, quite a few of them can.

When it comes to build, there are plenty of available statistics around the value provided by software development projects. According to Standish Group (Chaos Report), 68% of all software development projects are unsuccessful. Mercer Consulting’s Firoz Dosani claims 80% of technology projects actually cost more than they return. In the cloud, the build success percentages may be better – but so are the number of buy options available to you.

The statistics notwithstanding, if you choose to build in a cloud environment, you have to be ready to spend (at a minimum) the next 6-12 months working with consultants (or IT staff) – and then hope your investment will pay off. All this time you will be spending your time thinking about what your system should be doing, how it should be modified, how to generate reports, etc – and if you do get a system that does what you want, you will also need to figure out how to support and maintain it.

That said, if reinventing the wheel still seems tempting, it’s most probably due to one (or more) of these reasons below:

1.   You believe your business processes are very unique - you’re convinced, after careful analysis, that other businesses similar to yours operate in a very different way and no off-the-shelf product comes close to matching the way you do business.

2.   You have to deal with complex integrations - you have to integrate the new system to several of your internal systems, before it can provide any value.

3.   You are an IT person who loves to build - you are not scared of writing software or you find building to be a fun activity or you believe doing it yourself will make your job secure.

4.   You have assumed that building is very straightforward - you have been told that building is simply a matter of a few mouse-clicks, while enjoying a couple of beers – or a consultant has convinced you that building can save you a lot of money.

5.   You’re worried about the viability of the COTS provider - you like the off-the-shelf product but are concerned about the risks of the provider going out of business.

6.   Someone with credibility has badmouthed the buy option - this is exactly what happened in the example above.

If your reason is #1 or #2, you may not have much choice but to build - the best option then may be to hire a good consulting firm who can provide proper guidance. But remember – good consultants don’t reinvent wheels. Stay away from the type that I described in the example above and hire a firm that has credibility in your industry.

If your reason is #3, you may have made your decision already. Assuming that your job will remain secure in case the build project doesn’t deliver as expected, at least you’ll have fun doing what you love.

If your reason is #4, you will do yourself a huge favor by assessing the total cost of ownership (TCO) of what you are about to do, to understand what it would really take to build and maintain the system. You will need to understand the time and money involved in requirement gathering, building, modifying, training, supporting etc, over a period of time (there are several simple TCO models available). It won’t take you more than 30 minutes to understand the TCO, if you can spare that time.

If your reason is #5, you have to understand that in the cloud world you’re not really buying software – you’re only paying for a year’s usage, so your real risk isn’t that of losing your investment; the only risk is the additional cost of migrating to another system, which is usually lower than that of reinventing the wheel. Generally speaking, if the provider has been around for more than 3 years and has more than 100 customers, you should be on solid ground.

If your reason is #6, you can test the credibility of whoever advises you against buying, by asking them to put their assertions in an email. If you never see that email, you will know that they are not acting in your interest.

It’s really about TCO

When it comes to choosing a cloud-based product, there are a number of factors to be considered (which I will cover in a later post). At a minimum, the product fit and the total cost of ownership (TCO) are important. Most customers are able to assess whether a product fits their needs – it’s their inability to estimate TCO upfront is what steers them away from their core business, into the messy world of systems integration. It shouldn’t be that way.  As Robert X. Cringely observes:

Unless you are operating a software company, software should not be central to the way you view your business. It’s just a means to an end. And to be classed as truly successful, the means should be quietly efficient and as close to invisible as you can get.” 

Alok Misra

Comments { 0 }

Cloud Computing & Salesforce Expands Into Financial Services Firms

Susan Wright of Investment Underground interviewed me about the rapid increase in the adoption of cloud computing on Wall Street. Yes, it’s happening. It’s not surprising since financial firms have never been afraid of new technologies. What has also helped us is the fact that traditional software providers tend to be cloud-averse. As I said in the interview:

Our competitors are mostly on premise software providers, who charge insane amounts of money for software from 2 generations ago. Their products were not created for today’s interactive internet and social media world – in fact, it is very hard to modify them. If a user wants a report, you cannot just quickly generate it – you have to pay the vendor $15000 to $20000 in services fees to develop a report for you. There are very high implementation and support fees involved.

The other set of competitors we have are consultants that convince financial firms that their problem is very unique and no off-the-shelf product will fit their needs. They make tons of money reinventing the wheel at the customer’s expense.

However, it’s our value proposition that is compelling for these firms. To quote from the interview:

Our customers love our products because they’re out-of-the-box, based on a pay-as-you-go model and are fully supported by industry experts. They are very flexible, reporting is easy, and the products can be used from mobile devices. And, they are built on Salesforce, the cloud computing leader, so the customer data doesn’t sit on the servers of some local provider. It is as secure as it gets.

Even more importantly, cloud computing and multitenancy enables continuous improvement of the products. Customers get free upgrades as the products improve.

In addition, I think salesforce.com has done a fantastic job of eliminating most of the apprehensions around data security – they have made our job much easier.

To read the full interview, please click on the link below:

Cloud Computing Takes Shape Over Wall Street

Alok Misra

Comments { 3 }

How Salesforce CRM Helps Private Equity Funds Improve Deal Sourcing & Portfolio Performance

The private equity business requires a lot of focus – focus on fundraising, on finding the right deals, on company performance – before it can deliver successful returns for its limited partners.

Distractions can be plenty.  Martin Stein, Managing Director of Blackford Capital, who is one of the most tech-savvy private equity professionals, discusses some of these issues in a new video. He outlines why focus is so critical in the private equity world.

Martin has been one of the early adopters of cloud technologies and social media, deploying Navatar Private Equity CRM, which is built on the Salesforce platform, at Blackford Capital 3-4 years ago. Blackford Capital is a private investment firm that acquires, manages, and grows middle-market manufacturing, distribution, and service companies. Blackford also uses Navatar Deal Connect for deal sourcing and building intermediary relationships.

According to Martin, the cloud has helped Blackford Capital focus their time and efforts a lot less on deal sourcing, so they can allocate more time towards their portfolio companies. He adds:

In the end, it is finding a good deal and managing that deal effectively that allows us to drive higher returns for our LPs.” 

In addition to the video, do not miss the recorded webinar, The New Rules of Private Equity, with Martin Stein, to learn about the detailed metrics that Blackford uses to improve operating performance. When it comes to focus, Martin is one of the pros in the business.

Alok Misra

Comments { 0 }

Navatar Bringing Cloud Computing for Investment Banking & Asset Management to Latin America

Alternative Latin Investor highlights Navatar’s role in bringing the cloud to the capital markets and investment banking world in Latin America, in a recent article.

“Foreign market leaders such as Fidessa, Direct Edge and Navatar are challenging local providers in the race to meet the booming region’s needs,” says the article.

Read the full article here. It goes on to say:

One subsector of the industry in particular is pioneering a new paradigm of easy distribution: cloud computing. One of the leaders in cloud computing for global investment is Navatar, a New York based firm. Their first product line came out 3 years ago, and in the last year sales have more than doubled, giving the company a name recognition that has attracted major international financial firms. The hardware and software with which they serve their clients is hosted by the cloud computing host Salesforce.com.

The major financial firms they are referring to, are names such as PNC and Jefferies. In Latin America, we have customers such as Banco Lafise, a prominent bank. One big reason they like our products is that they never have to go to their IT departments or hire consultants. As the article quotes me:

“Our products are very tailored to the type of asset class,” Alok Misra explains, “But they are also out-of-the-box, so companies don’t have to spend so much on IT and maintenance – it’s all included at no additional cost.”

Another key reason for our success globally is Navatar Deal Connect, the free marketplace for middle market deals – if you’re a dealmaker in Latin America, there is no better way to build relationships in America and Europe – without spending a penny.

Stay tuned for more developments in this exciting region.

Alok Misra.

 

Comments { 3 }

Webinar – Salesforce CRM Meets Deal Sourcing for Private Equity Funds

Don’t miss this webinar, Deal Sourcing meets Salesforce CRM, to learn how Navatar Deal Connect, integrated with Salesforce, is redefining how private equity operations are managed.

Navatar Deal Connect is the free online marketplace for middle market transactions, used by thousands of dealmakers worldwide. Salesforce CRM helps manage fundraising, investor relations, deal sourcing, deals, portfolio and much more.

Register here.  In this webinar, you will learn how these two critical tools now work together, so you can:

  • Build private connections and interact confidentially on relevant transaction opportunities worldwide, and have those connections and deals be delivered right to your Salesforce CRM
  • Use Salesforce, fully pre-built, for automating investor relations, deal management, deal sourcing, portfolio management as well as secure investor reporting – without paying any extras
  • Quickly benefit with little to no investment, so you can save your precious time and money instead of spending it on subscriptions or software development/maintenance

Register for the webinar here.  Also, feel free to post your thoughts after the webinar.

Alok Misra

 

Comments { 1 }

Navatar Private Equity CRM and Hedge Fund CRM for Salesforce Cloud Featured in Hedgeweek

Hedgeweek and Private Equity Wire mention the work Navatar is doing in bringing cloud computing to the alternative asset world, in their latest article that they interviewed me for.

“US-based Navatar Group is a leading provider of cloud computing for Wall Street firms, but increasingly that client base is widening out to alternative investment managers as they start to fully appreciate the benefits of cloud systems and how they can streamline their operations.”

We see this as a sector that will be gaining a lot of prominence in the US, given the regulatory changes that are anticipated. However, we have also received significant attention from European firms recently and our customer base across the pond has been growing rapidly. We are working on recruiting resellers in each country so we can provide local support. More on that soon …

But I’m truly happy that only 1 out of 50 prospects now mention data security as a concern (our partner salesforce.com has done an excellent job of alleviating those concerns). I’m excited because it takes us to the next step – opening the door for some game changing innovation, as Greg Johnsen points out in his Wired magazine article, The future belongs to cloud-networked companies.

“We’re only in the second inning of cloud computing. Its most profound impact will not be on reducing total cost of ownership, but rather for enabling powerful, game-changing systems — that were not possible before.

Today’s systems were designed for a world without an internet. They assumed little to no connectivity between or across companies. They were designed for companies, in isolation — not communities or “networks” of companies collaborating together.

To survive, companies must transform themselves from silo-based, inward-facing corporate operators to interconnected, highly agile business network orchestrators. They must leverage newer cloud-based B2B platforms designed specifically for inter-company process orchestration and collaboration on a global scale.

I will be communicating more about the cloud platforms of the future, that we and some of the others have been building (it will take more than just Navatar to bring about this change). So back to Hedgeweek, and as I am quoted in their article:

“As with everything, change only happens when clients realise it’s possible and force the vendors.”

Alok Misra

Comments { 2 }

Private Equity CRM – we hit the ball out of the park!

Sometimes we get criticized in the salesforce.com world about not highlighting all the good things that Navatar does. Yes, we are shy at times. So this time, let us draw your attention to some good things being said about us – a recent one related to one of our most popular products, the Private Equity CRM for salesforce.com, which continues to ride high. It was great to receive a glowing review from Glenn Oken, one of the most seasoned Private Equity pros and Managing Director at Mangrove Equity Partners, LLC, a Tampa-Florida based lower middle market private equity fund. Here is what Glenn had to say:

“Navatar has clearly hit the ball out of the park with their private equity product for salesforce.com. The product’s functionality in support of the various aspects of private equity investing is outstanding. Its ease of customization and remote-use capabilities are far superior to anything we have seen or used.”

Thank you Glenn. It is great to have you as a customer.

Oh yes, and to learn more about Navatar Private Equity for salesforce.com, or to see a demo please visit:

http://navatargroup.com/industry_solutions_private_equity.html

Alok Misra.

Comments { 4 }