On-Demand: Family Office Technology Solutions Series | How Technology Can Improve Your Family Office Operations
- Apr 26, 2022
Part I of this series will focus on the various types of technologies currently being deployed by organizations and how utilizing them can lead to improved efficiencies and create new business opportunities.
Gregory Fritsky: Thank you, Bella. Good afternoon, good morning, everyone. Thank you for joining our webinar today. Pretty excited about this topic and hope you're all doing well and it's springtime, so a good time to get a refresher on everything technology.
I'm a director here at EisnerAmper for the past four years. I work in the business transformation space. I basically grew up in the accounting/auditing space and then moved into software roles. Spent the last 12 in this digital transformation area. It's an exciting time. A lot of changes going on. There's a lot of opportunities with technology. We'll talk a lot about that today and how that could impact family offices and other organizations, as well. I'd like to pass it on to Jason for his introduction.
Jason Juliano: Thanks, Greg. So happy Tuesday, everyone. So I'm Jason Juliano. I have roughly around 20 years of experience leading technology, risk management and operations for investment management firms, investment banking. The last few years, I started a fintech, regtech AI and automation company, before I started with EisnerAmper Digital. For EisnerAmper, I lead up the digital transformation team for Eisner digital practice, overall. We help clients look at their digital strategies, processes and get deeper insights into their data, within their firm, so they can become much more competitive. Laura, I'll pass it to you.
Laura Macca: Hello, everyone. I'm Laura Macca, I'm the director of transformation. I lead the transformation efforts internally. Again, looking at our strategy, process automation and re-engineering. I have 20 years of tax experience in the big four and private and previous to EisnerAmper, I was with a large family office in Connecticut, leading their transformation efforts and operations.
Gregory Fritsky: So thank you, Laura and Jason. I work with both of them very closely, with Laura internally, we're doing a lot of great things, leveraging bots, leveraging technology, to transform our internal operations. I work closely with Jason for the last three years, helping clients externally transform their business, as well. So excited to be paired up with both of them.
Just to give you kind of a summary of what we're going to talk about today. Obviously, many different business applications. There's a lot of new technologies. We want to basically give you kind of a plethora of different things that are going on, things we're working with, things that clients are working with. We're not going high, high tech. We're really talking about things that are really useful, really useful use cases that are relevant today. We'll try to answer any questions as they come along, as well.
But hopefully, when you walk away, I always say, "The important thing is, you walk away with a few things." One is to understand that, the technology today is a lot more low code, or even no code. There's an opportunity now for the business to get more engaged and involved. This is something that every person on this webcast, can probably pick up, start to learn and start to enable themselves. Hopefully, there'll be some interest as you learn more.
So then we'll talk a little bit about what we've seen, our collective experiences, best practices, challenges we've seen. One of the most important things, is making sure that users accept and become enabled and use the technology, because the reality is, it's only as good as the fact that, if the users are actually implementing it and continue to use it. That's always something that organizations have to look at.
So why the increased focus on technology at this time, by family offices? I think the obvious one, we always talk about and have been talking about for the last couple of years is, the pandemic has really brought us to, forced us to work remotely. Now, I think we're kind of getting hopefully towards the end of that phase, but the reality is, I just saw a statistic on the news earlier today. It said that something like 70% of workers were polled and said, "If you had to return full-time to the office, would you leave your job?" 70% of people basically said they would.
So that's very telling. It's probably also a function of a lot of opportunities in different organizations, but the reality is, we know we can work remotely. The technology enables us to do that and we're going to continue to see that. So that's definitely an important point. The other is that we're all seeing this, the hiring challenges. As time is going on, we have to pay more, locating good talent, retaining talent, it's difficult. One of the real benefits of working remotely, is being able to hire talent from all across the country and sometimes even across the globe, right?
So if you're looking for a real specialized need, or you want to tap into resources that are in another state, you can do that and those opportunities will continue. So those are kind of the first two things, points, that I wanted to talk about. But Jason, I want to get your thoughts a little bit more on some of the IT aspects of it, like security.
Jason Juliano: Well I'll circle back on the pandemic, because what I've seen across different size, whether it's small businesses, mid-tier businesses, or even enterprise businesses, the pandemic has actually jump-started in the last two years. We've as a society, have innovated much faster than we ever have done before, especially in the last 10 years.
So I think the pandemic actually helped us pivot to a more digital transformation age ever, leveraging technology anywhere, anytime. In terms of cybersecurity. Cybersecurity is a real threat now. Especially with everything that's happening, across the pond in Europe and Asia. There's a lot of bad actors there. We have to make sure that we're much more secure than ever before.
There's also things related to zero trust. Some of these malware attacks happen in real time and we just have to make sure that we're following best practices, add several layers of cybersecurity in place. So I think that's definitely essential. Then just talking about this topic, I would say ESG also, from a family office perspective, really looking at how you're making your investments, from an ESG perspective, with the environment, climate risk. Not just specific to industry, but specific to geo-locations.
Laura Macca: And Jason on that, what I'm finding is a lot of the second and third generation are really focused on ESG, right? They're looking to see what the impacts are there investments and philanthropy. So they want that transparency, I think more than I've seen in the past. Touching on security, I think family offices always have a level of confidentiality, that's always been pretty high, right? I think it's actually getting more secure. The concept of on the need to know basis, is becoming very prevalent, when they're building out their security models. I think that's important to note.
I know in the past, some of the statistics in the last, like 26% of the family offices who have been attacked, had some kind of cyber-attack, 17% in the last year. Some of it is because of the pandemic and people working from home and having home Wi-Fi and VPN and trying to work through those issues. But again, a very high concern for family offices, going forward.
Also, it's just the, we list the expectations, right? There's a level of expectations that in the past, a lot of the reporting was historical, right? How did we perform? What are the balances quarterly and at year end? Family offices are expecting strategic partners, like internally and externally, right? They want it from their employees and they want it from their advisors, right? So there's a huge push for forward-thinking insights. That really involves technology piece of it, right? So there's a big push for that.
Again, they want their staff to be analyzing data, not just plucking the data and there's things that they're focusing on. How do we get direct feeds from custodians and brokerage firms? How do you manage like entity structures, right? One of the big asks I get is, "We want to do look through, through tiering, for partnerships." Right, that's one of the biggest asks I get. Consolidated reporting, tracking investments. Partnership reporting, so again, the level of the data, the complexity and more family offices are working on global operations. Again, involves all these things. Technology, security, collaboration with vendors.
So I think more than anything, I would say it's one of the top priorities for all the family offices that I've met, over the last few years.
Jason Juliano: Yeah and leveraging emerging technologies like automation, AI, specific to the ERP solutions. Handling a lot of those mundane tasks, that these family offices are having, from an operational perspective. Then yeah, as you stated, from a reporting perspective, really digging deep and getting deeper insights into the data and whether it's internal and external, right? Leveraging alternative data sets that a lot of these investment management firms are leveraging.
Laura Macca: Also I would say with these staff in the third generations, it's the ease of use, right? I think mobile apps are kind of like the focus area for that second and third generation, right? They want the information real-time and they want it quickly and they want it on the go, right? So a lot of requests in that area.
Jason Juliano: Yeah, definitely. Okay, let's go on to the next slide. Sorry. So what are the top technology initiatives? All right, so-
Gregory Fritsky: So-
Jason Juliano: Go ahead, Greg.
Gregory Fritsky: No, I was just going to say, just to kind of build on the previous slide. Yeah, process automation, as you can see here, is one of the top trends. Everyone is obviously focused now on doing more with less, right? So being able to automate a rules-based, structured process, is pretty much across the board. Everyone is looking for ways to automate the work that doesn't add value, right, so that the employees that are hired, are doing the work they want to do. I think that's important too, because as we're starting to see more and more challenges staffing these roles, people want to be in a position to be making decisions and using data and getting to it quicker, to Laura's point.
So, these are the types of tools like UiPath and Blue Prism and Automation Anywhere. We use at the firm UiPath, but all of these different process automation tools are being deployed and helping us automate multiple processes across everything from procure to pay, to record to report, investment accounting. We'll get into some of the specifics. So Jason, you wanted to comment?
Jason Juliano: Yeah, yeah. So I like this picture because, it leverages not just technology solutions, but the processes that are in play, during the normal business operations. But then the integration pieces, right? So having all these systems communicate with each other. Yeah, we've seen a big push to basically open up these systems, to be exposed. Again, anywhere, anytime, at any device. Every time we're building custom solutions, we typically say, mobile first strategy.
From a data and AI perspective, we've helped clients implement AI initiatives, where we're reading in large governing documents, contracts, policies, regulatory opinions, also creating digital chat bots. Again, across different technologies, whether UiPath, IBM, Automation Anywhere, Blackline. But then looking into the data, right and not just the data that you have internally within your firm, but also externally, allowing you to create more management dashboards, real-time, to get deeper analytics and include artificial intelligence and machine-learning to do some of those predictive analytics, also. Laura, you want to say anything on ERP solutions?
Laura Macca: Yeah, I think it's and I agree with you, Jason, looking at this picture. Like the different processes, right and looking at the different areas that come together. I would say that, it varies on the size of the family office, or the investment companies that we're looking at, right? So it could get very sophisticated, but it could be very simple. I think that's what we're going to talk about a little bit later is, how do you approach it? The number one question I get from family offices is, "How do I get started?" Right and they're looking for the technology, right? Like what technology do I buy, right? This is just a sampling of what we do, but again, step back and think that there are things that within each process that we can, that family offices can address independently. Again, it's just looking at that holistically. So process automation is probably the key area, along with the business applications that people are really trying to get started with right now.
Gregory Fritsky: And just to round out that discussion, the important thing to note, as you're looking at different technologies and making considerations is, you want to have an integrative platform. You want to have one single source of data. You want the ability to integrate and you want the ability to get information quickly. Remotely and quickly. So being able to use the different tools are great. The important this is, all of these things work together and you can see, there are many different technologies here, some of which you may be using today. But the important thing is that they integrate well.
Whatever you choose to decide, we'll get into some of the questions to ask. But that's important to note. I often say that, technology is the great equalizer. So no matter how big or small you are, if you do it well, you'll give yourself leverage, that you'll be able to scale quickly and be able to compete with just about anybody and differentiate as well. So it's important to kind of look through that lens.
Jason Juliano: Yeah and there's a question here that is tied to this overall webinar, but "How much of this webinar can be applied to general business operations?" I mean from my perspective and Greg and Laura, you can provide some feedback to this, but I think as we go deeper into the slides, we'll give use cases on some of these, how we're leveraging some of these solutions and technologies for overall operations and give you a deeper picture of the use cases of how family offices are leveraging these technologies today.
Gregory Fritsky: Yeah, so we'll start with one of the areas I find I've been working in this space for the past seven years. Process automation. Robotics process automation software. If you haven't heard of it, essentially it is the ability to create what they call a digital worker, or a bot, a software bot that can execute functions just like a human worker can, right?
So if you think about everything you do when you pay bills, when you reconcile statements, when you do your investment accounting, or you do your reporting, you probably run through an exercise of 10, 12, 15 steps. Excel's probably a big part of that. That whole process chain from receiving the file, extracting the data, importing it, running the macros, everything that you essentially do. Hans on keyboard. A lot of that, a lot of that can be automated and companies have been actually automating 60, 70, 80, sometimes the full process, using this type of software.
Again, it's just, think of it as a digital worker. It's emulating what you do. It can be used to go into applications, go out to websites, pull down data. If you're doing any kind of market analysis, or you're doing valuations and you're pulling data in from multiple sites. It can extract that and populate the Excel spreadsheets. It can do the transformation of the data. It can do a lot of the data gathering and transformation, so that you can get right into, "What is it telling me?" And start looking for exceptions and anomalies and start to report.
It's definitely geared towards rules-based, structured data sets. Jason will get a little bit more into the AI/machine-learning components. But this technology's been around now and it's been proven. Laura's been driving a lot of the initiatives within the firm, areas around tax audit, within our outsource accounting group. Think of all the different processes that we perform, similar to family offices. This is a technology that's very powerful. It continues to gain traction. I'm going to give, Laura can maybe speak a little bit on that, a little further.
Laura Macca: Yeah, I think again, there's a host of opportunities to implement RPA. A lot of it, again, one big area that we look at and we get requests for, is bill pay, right? There's different options to do that, right? It could be, which software, someone asked, I think one of the questions is, "What bill pay software?" There's a lot out there. Billpay.com is a popular one. But it doesn't mean it's the right one for you, right? But there's other things that we can implement, either to compliment that, or replace that. We get a lot of cases where we're able to read the invoices, especially because of the pandemic, a lot of vendors changed so they're not mailing the invoices anymore, right?
So you'll get an email. But were able to build software that can read those invoices, can actually go and read the email with the subject line, because it's usually pretty standard for vendors to read the document, post the invoice against if there's a PO, post it against the PO, book an entry and it could take it all the way up to actually issuing a check, right? It depends on where you want to put a human touch for risk. But a lot of opportunity, again, anything from booking the entries, to check pay, to looking at which software you should use, whether it's billpay.com, or some other vendor. But a lot of the family offices are focused on that area, I would say.
Jason Juliano: Yeah and I want to add something, because I'm looking at the second and third question that came in and they're mostly around recommendations for tools. I would say, every family office is different. So it really depends on your overall operational structure, your culture, what data you're looking at, what's your strategy from an investment management play? What's your overall business plan for generational wealth, within the next 10, 25, even 50 years? So I would say, it's really understanding who you are as a family office, or multi-family office and then using the best tool for your needs. Because again, every family office is different and that's what we see, time over time.
Laura Macca: Yeah and again, that's probably the question that everyone starts off with, Jason, right, is which software? We approach it after we've done a review, we have our vendors, our knowledge of vendors and what their strengths and weaknesses are, but we have to apply it to the facts of the family office, right and with all those considerations that Jason listed. Your growth plans, size of the office, volume of the office, the complexity of it. So again, we do that attribution as we go through that process. But there are plenty of tools, whether it's a third-party tool, or if it's something that is developed, right, which might get you there faster and less expensive and more user-friendly.
Jason Juliano: Yeah, I mean I would say like 50% of our engagements with family offices are system selection engagement, just really doing a deep dive in your internal operations and processes and then making recommendations for the best tools that fits the family office needs.
Gregory Fritsky: So just to speak to some of the use cases, because I know there's a lot of questions about that. There's one in particular that we have here, regarding just this is an example of using a technology, I don't know if you're familiar with OCR, optical character recognition software, which can basically read in data and then capture that information and then basically import that. But by using that information and in this particular case, a family office could use hundreds of vendors. Each vendor has a different template. Think of all the different PDFs, the different formats. How do you pull in all that information?
A lot of people spend countless hours, just importing that data. Populating the ERP system. It just keeps growing. I think Jason, you and I worked on a particular client experience or something, along these lines of just multiple data, trying to extract it, importing it, putting it into Excel and then pumping it into ERP and the solution could be an OCR-type tool, leveraging, ERP using the OCR tool and then basically performing the functions that the user does. You could just imagine, it takes all that time out of the user's hands, so they don't spend time populating fields. That's a critical part of the family office function, any office.
One of the things, just to comment earlier, with regards people are asking about the ERP systems. Which ones to specifically look at and again, it does come down to the use cases. But understand that you could compliment what you do today, it doesn't necessarily have to replace your current ERP. You can use RPA to perform some of the functions within your ERP. So it's not really an either/or. It's more of a compliment and could just help you expedite the processing in your current system. But if you do start to look at additional, or new systems, certainly look at its automation capabilities and the ability to be able to do the work flow for you and embed some of that RPA technology in those applications. We're seeing more and more of that. That's important, as you're going through that selection.
Jason Juliano: Oops.
Laura Macca: Yeah I think, like we've been talking about, there's a lot of areas to leverage automation, whether it's RPA, or different areas. But we're looking at it with account reconciliations. Getting bank statements. We have clients who get their bank statements and reconcile to their general ledger and there's an exception report when they come in, in the morning. Whether it's monthly, or weekly, however often they want to run it. Those are all automated, at this point.
Financial closes and entries are automated. We talked about bill pay and invoice processing. Sales tax, able to again, read statements, read and book those entries directly onto your general ledger and track those, so you can report your sales tax easily. Another common area is partnership tax, populating tax forms. We have software we can easily build and there's third-party tools that you can extract the information from K1s and summarize it, so that you can either book the entry, give that information to your advisors, analyze it. So very simple actually, RPA use cases, but very powerful.
Someone asked about, they had HubDoc recently, depreciated their statement. Their ability to banks training roadblocks for data scraping. Does your team have experience in this area? Have you developed the solution to fetch banks and brokerage statements? We have. We've done it, we actually did this recently, internally. There are roadblocks with the banks, but we've been working with the larger banks. So we automatically fetch those statements and are able to, through bots and able to record entries and do validations on our end. So it is possible. But sometimes we have to work with the individual banks and we have to build relationships with the banks, so we can make that work. But that's yeah, a big area also.
Jason Juliano: Yeah and I want to add also, two other use cases that we've done, time and time again, is creating automation processes to make the financial close process much more faster. So creating bots to again, handle some of those mundane tasks, that one of your senior accounting managers, or controllers are working on. Validating and reducing, again, the time to do the financial close, from a month-end perspective. Then another big use case that we see, is the PO and invoice use case, where we create a process to pull in data from purchase orders and then we pull that into the ERP solution. Then again, we pull in the data from the invoices and then we create an exception process, so if there's any invoices that have been approved by a specific purchase orders, we'll red flag it, send an email to the CFO, or send an email to the controller saying that, "This was denied, because this invoice is over this specific purchase order." Then, have the accounting department do further action from there.
Laura Macca: Someone, we had a question, it might be any of us can take it. But someone wrote, "I investigated RPA a few years ago, but was told you need a full-time IT person to maintain it. Data accounts change all the time."
Jason Juliano: No, that's definitely not the case anymore and I would say, it's actually getting more mature, where a lot of these technology suppliers are providing RPA as a service. So you could think of like a market place and say, "Okay, I want to pick net suite RPA to do my financial close process." Then once you turn it on, it's good to go and as a service model, it allows the technology supplier to make updates on the back scenes, without you knowing about it. So you don't have to have an IT person maintaining that file for you.
Gregory Fritsky: Yeah, I would say robotics as a service, is definitely getting much more attention. It gives you the ability to get the support that you need, yeah, things do change. Files change. Work flow changes. If you have somebody internally, they can be enabled, but you're right. There's the opportunity now to contract directly through the providers, to provide that support, as you change and your business changes.
Laura Macca: It also depends on the actual RPA, right? So if we're looking at, sometimes it's an internal system, right, that we're looking at and to the extent that it relies on a third-party solution, I would caveat it and say, there are some changes that happen over time, but it's something that's very manageable as long as we have the process around it. It's documented and we know the work flow behind it.
Jason Juliano: Okay. All right, so financial transformation. So I'm going to talk about specific use cases on how we take your existing accounting process and go through a digital financial transformation workshop and even the implementation. So a lot of ERP solutions today, include Dynamics, NetSuite, Intacct. I mean most of them are doing it, but they're actually, out of the box, integrating AI/machine-learning into the solutions. Now in terms of anything that there's a gap, that you need to do more predictive analytics, you could always bring in a third-party tool with that. Or engage our firm and then we could find the best solution, based on the ERP solution that you're trying to solve. But many of these applications are now reading invoices, extracting data, pulling the information from the invoices directly into the general ledger. Some of these use cases could be accounts payable and receivables.
I talked about this previously, but pulling in data out of the invoices, whether you get them via fax, if people still use fax, email, even like snail mail, right? Scanning those invoices, pulling the information out, creating a process to put that into the ERP solution and then post into the general ledger. Then pulling in the information from the purchase order, for instance, to do that exception and making sure that you're not paying invoices that were not approved. Another use case is the financial close process that I mentioned before. Getting the right information, much more quickly, accurate. Making faster and better business decisions. Then going back to the aspect of anywhere, anytime, any device. A lot of these big ERP solutions are cloud-based now.
So really making the investment and making your overall operations and processes much more efficient than ever before. Then a lot of these ERP solutions, also providing some built-in predictive analytics, allowing you to, give you some financial reporting, make decisions much more faster and then doing some predictive analytics, based on some business rules that you push into the ERP solution. Laura, you want to add anything else to this? I know you have some experience in the ERP space also.
Laura Macca: Yeah, I think we're going to talk about it a little bit later, but again, people are asking again, the insights are very important. The collaboration is very important. The tiering is very important. How do we, someone even asked, I think the question of, are we able to get automatic feeds from private equity and hedge funds, into the general ledger? We have done that, in the past for our clients. So it is possible.
Again, those kind of questions are the things that people are asking for and again, automatic feeds, data integration and reporting, I think is the number one area that we could ask for. It's transparency and accountability, right? How do you inform stakeholders, families and investors, right, in a good way? Dashboards are a big ask and a really powerful tool, across all generations. But they do like that dashboard where they can log in and get that personalized information, without a lot of phone calls, or emails, or long reports, right? They're able to log in and see their position, or their basis, or different scenarios that can be played out.
Jason Juliano: And drill down, right? Drill down from those-
Laura Macca: Right.
Jason Juliano: Yep.
Laura Macca: The tiering is big. I think that's been a big focus.
Jason Juliano: Yep. All right, what's next in the deck? All right, so another use case we see. I wouldn't say often, but it's up and coming. So it's getting more screen play, more activities. The family office relationship intelligence. So you could think of this as looking at basically putting CRM on steroids, if you will. So yeah, having relationship intelligence. Finding the next unicorn, in terms of your investment management strategy. Leveraging new insights into your data, allowing you to find and manage and close more deals, based on the relationships that you have. Creating predictive analytics on relationship scoring. That overall helps you with investing, whether it will be VC funds, online investment platforms, or even helping the actual family office, or multi-family office lead rounds, advantages, or the investors who lead the best deal flow, will have the best engine and return on investment, based on their technology investment.
You could also create watch lists from the data they're ingesting. You can ingest data into your CRM, whether it's Salesforce or NetSuite and pull data sets directly from PitchBook, for instance, or Bloomberg and add that to the metadata that you're capturing, to have some predictive outcomes, based on the relationships that you have. The high hopes, or as you manage generational wealth, is getting increasingly better tools, access to data and having more transparency across these systems and external data sources. Again, giving you deeper analytics and improve operations and then overall, just simplifying the deal management process that you have for your family office. Greg, Laura, you want to add anything else to that?
Laura Macca: What should we jump to, I think ERPs?
Jason Juliano: Okay.
Gregory Fritsky: Yeah, well no, we'll continue that conversation, but let's talk a little bit about business applications, ERPs. What should be considered? I heard earlier, obviously understand the use case, but how do you understand what are the best use cases and what is applicable to you? We do a lot of process discovery, a lot of we do workshops with clients. We've done them internally, getting in front of a white board and just sort of mapping out the steps and understanding, what are the processes, what are we doing and what should we not be doing? Sometimes that's just as important, right? So we do a lot of reconciliations.
But if we're touching data, that's probably why. If we can get a streamlined data flow, if we can be able to extract it, without touching it. If we're able to export it and validate it, using robotics, that's going to make life a lot easier. So kind of diving into this conversation is more like, what are some of the things to start to consider? I know Laura has a lot of experience in this space, as well. We're often talking about roadmaps. I don't know if you care to comment.
Laura Macca: Yeah, I think both Greg and Jason know that's my famous word is roadmap. I use it probably on a daily basis. I think I can't emphasize the importance of building that roadmap. By roadmap, that means sitting down, looking at everything that we talk out. The strategic vision, the goals, the resources, the timing. It's not just the money question, it's the resources that you have, the time that you have and building out that roadmap. What that looks like six months from now, a year from now, two years from now, three years from now. That's the best way to get the best possible outcome, in both process solution and cost-wise, right?
As Greg mentioned, the best way to do that, is to do that discovery, that process review, end-to-end and look at all aspects of it. Because, we're not just looking at replacing an ERP, because of all of the things that we've mentioned. There's opportunity to implement like RPA solutions, automation. Maybe, I've benchmarked this a couple times in the last few years, I think it's over 90% of family offices use QuickBooks. Now it's QuickBooks Online. I think everyone's looking at ERP, instead of jumping to, "We need a new ERP", or jumping to which ERP is most often used by family offices, we walk through this process, a different process of whether it's general ledger, practical accounting, whatever we need to look at and stage it, right?
So what makes sense for your family office and the situation that you're in? What are your plans to scale it? Resource needs, whatever we do, it's still a collaboration. We need to work with people from the family office. We reach out to advisors. There's things that you can do upfront, while you are choosing an ERP, to when you're building out your chart of accounts, there's things that can be built in, so that it makes it easier to do the RPA afterward. We personally look at it, we look at it as you're working with different advisors and how do you make that more efficient, right?
So it could be talking to your advisors, right, if we're your advisors, we also know your day to day, but law firms, your brokers, your tax advisors and making that more efficient, because three or five years down the line, the goal is to ingest that information directly, right? It goes from your general ledger to whatever final reporting you need to do, right, especially in the tax area. So days of a portal or emailing files, yeah, I would predict will be gone pretty quickly and you'll be able to upload that information, if needed. So that I would say is probably the most, I can't stress the importance of that and it's not a huge flow. It's sitting down with whoever's doing this process with you and walking through what your requirements are in detail.
Maybe Jason can cover a couple of the other areas. I would just say there's a focus on the business requirements also and walking through those in detail. We get a lot of calls where, family offices have chosen a certain software, whether it's an ERP, or a document storage or investment accounting and they've implemented it pretty painfully and then it doesn't do what they thought it was going to do, right? It doesn't have some of the key functionality, or reporting that they wanted and that's an expensive place to be. So doing that upfront, is really important and getting those detailed business requirements and walking through what you expect, what it looks like, access, control, everything, right down to access, reporting, user interface, whatever that looks like. Dashboards and planning that out carefully.
Jason Juliano: Yeah, a lot of times, we have clients that just say, "We don't know what we need. We don't know what we want." So they can't really define real business requirements. So we usually start them off with like a design-thinking workshop and then look at their strategic business plan and then try to align that to where they want to be at and then back pedal into business requirements for, let's say if they want to migrate to a new ERP solution. But Laura, you mentioned chart of accounts. I was just telling a client this past Friday, I was going through a design-thinking workshop.
They're moving from legacy QuickBooks, to a new ERP solution in the next coming months. I told them, "The more time you spend cleaning up your chart of accounts, the easier you're going to have through your transition to the new ERP solution." So it's not a technology solution to fix it, you just have to spend the time look at your chart of accounts and then envision where you're trying to be at in the future, in the next three, five, 25 years from now. We mentioned a couple of times, the integration across systems is so important. But in order to do that, you really need to understand all your processes, right?
So what are the manual processes? What systems do you leverage? Then what systems out of the box can talk to each other and wherever systems can't talk to each other, then create something called application processing interface, programmable interface to make sure that those systems could speak to each other. So you streamline those operations and processes for your systems. In terms of remote accessibility, I mentioned this before, but as you embark into new emerging technologies, look at solutions where you could leverage these anywhere, anytime, anyplace, mobile first technologies. A lot of these CRM/ERP solutions, you could basically open up on your tablet or mobile phone. Just from a management perspective, you need to look at your KPIs. Look at some financial reports, so you can manage your business, again, anywhere you're at, especially when we're in this hybrid work force mentality.
Most of the time, we're spending our hours managing our business either at home or traveling. Then just again, try to be a step ahead from a cybersecurity perspective. The biggest thing with cybersecurity, is just make sure that you have several layers of security in place. You have a third-party assessment to look at your overall infrastructure, your policies. So you're just more protected from, not just from a data privacy perspective, but overall organization and making sure that you reduce any exposure you have for your firm. All right. Common challenges. Let me, so what are the common challenges?
Gregory Fritsky: You know, I find this is one of the, over the years, one of the biggest challenges I often see and I always say, it's not a lack of understanding necessarily. It tends to be more around the culture of change. Change management. The ability to change. I think we're all, we get excited, we get passionate about this. Everybody likes to be part of these projects from the start. The challenge is, how do you get everyone on board? How does everybody become part of that vision and I think that's important, because, if you don't communicate what that vision is, if you don't have that roadmap, if you don't align the business needs and get the stakeholders involved, it's very difficult to change. Most organizations, it's just the way we are.
Change is, it could be difficult and technology can move very quickly. So are we ready to implement a bot that does 80% of a function that I did before? In theory, it sounds great, but what does that mean for me and how does that operating model change? So you need to consider that and that's an important point. I think that that's definitely one of the common challenges I've seen. I don't know if Jason, Laura, you agree.
Laura Macca: Yeah, I mean personally I've seen the time and resources being the biggest challenge. A lot of family offices are strapped. Yeah, so on top of their day job, they're tasked with helping choose the systems and sitting down and walking through and getting the business requirements and actually implementing it. But it's kind of push and pull and if they implement these technologies, right, they'll have more time, right, to do the other things that they're working on. But again, it's just laying out realistic expectations, timeline and yeah, just making sure that everyone is on the same page, right? Stakeholder involvement is really important.
Gregory Fritsky: Yeah and I would just add that the investment first cost debate, oftentimes, in the short run, we're looking at how much does something cost? Can I potentially capitalize this project? Again, the roadmap can help you get there. If you start to look at it from a two to three year horizon, that seems to be the roadmap that most are looking at and take smaller steps, early on.
Look for quick wins ROI. We talk about that all the time. Again, if there's something that's dangling that we can automate that's just taking an inordinate amount of time and costing us, let's approach that. Let's tackle that with something that's less invasive than something like a new ERP. Maybe there's process automation, or there's other technology. We were looking at a technology recently, DataSnipper, which was essentially taking data from different PDF files and populating and extracting it into Excel, in a very rapid fashion.
So Excel's not going to go away, but the reality is, if I don't have to keep touching it, if I have to keep importing data and just sitting there in front of the screen all day, if that helps and helps me get to the end game, then why wouldn't I implement that? So where's the investment, where's the cost? What am I trying to achieve, long-term? Having that roadmap will help you settle that debate. Then lastly is, stakeholders. Who's involved, keeping the business involved, that's critical at making sure that everybody plays a part in this. Family offices aren't always, it could be five people, it could be 50, it could be 500. The reality is, getting as many people on board, so that they understand the vision and that they can impact change, as well. So back to-
Jason Juliano: All right.
Gregory Fritsky: Go ahead.
Jason Juliano: So best practices for successful implementation. So I would say, leverage your partners. Leverage your network. Within your own operations, make sure that you're much more agile. Amazon actually has a statement where, "Take risks where you can make sure you could back out of the risk, but if you cannot back out of it, just make sure that you document your requirements ahead of time, so you can minimize any risk along that specific project", right? Make sure you have a feedback loop. Then, something the pandemic showed us, is that everyone has an ability to pivot quickly, right? So just like anything else, if you make an investment and you see that it's not working for your business, it's okay to change. It's okay to pivot.
But definitely leverage your partners. I would say, a lot of your partners have some practices already engaged, where they're leveraging automation, AI, deep data analytics. For us, we go inside our family office or multi-family office and we look at how that office actually operates, right, because we want to cater specific recommendations and tools and technologies to the way that family office operates and look at their internal processes and then figure out what the gap is, right? See what we need to do to help them innovate and transform and become much more profitable.
Laura Macca: I would say even look at their business model, right? I feel like sometimes we're looking at systems and they're thinking about their current process, right? I've had a client that was looking at their general ledger, new general ledger system and talking about investment accounting and we decided on a certain solution, but they also decided to outsource their accounting function, right? Which kind of changes some of the requirements, right and what the solution might look like.
So, kind of keep those things in mind. That's why it's really important to collaborate with your advisors, because we can come up with something that you have your four team who are focused on the strategic thinking and the analyzing and it's actually less costly to kind of adopt a different business model like that, with staffing, with the technology. So again, looking at the process is really important.
Gregory Fritsky: Yeah. I would say the successful implementations really comes down to the project team, but also for the leadership, making sure that they champion the communications are there, the vision is there. But also, re-evaluate things. I do this with all of my projects, all of my clients. We take another hard look, every week. Adjust the schedules. Make sure you're doing things realistic and they're fit for purpose, meaning, are we looking at solutions that are going to meet, are we looking at bill pay? Is that specifically, that's 80% of our focus right now. Then let's bring in the vendors. Let's identify what the requirements are. Let's go through the design workshops. Let's build those things and then make sure we're selecting things that we know, if we grow, we'll be able to continue to scale and do the things that we've mentioned. That's important. So having those requirements and making sure that we continue to engage the stakeholders. That's all going to lead to successful implementation.
Jason Juliano: Yeah, I would also add, just making sure that you have a process to manage and monitor your operations right, because what you actually don't measure, you can't manage, right? So just make sure that you have that in your sights. So you're constantly innovating and making your overall operations much more efficient.
Gregory Fritsky: And so, our last question, how can you achieve high user adoption rates? In my opening, I basically said, these technologies are only going to be powerful change agents, if people are actually using it. Obviously, training, user enablement, making sure that you understand it. If you do contract with a vendor, or with a partner, make sure you create a hybrid team, where users are going to be the ones who sort of learn and then the trainer approach, where they'll now take that out to the user community and continue to manage and monitor it. Make sure people are actually using it. Report that back to the stakeholders.
Set the acceptance goals for what's the level of adoption that you'd like to see in the first three months, six months? I often say, make sure that you're continually taking feedback from people and looking for ways to improve. That's why projects that really are successful, are four, six, eight week implementations, but bringing something to the table, showing people, demonstrating it and then ultimately, improving upon it and you'll continue to see people involved and engaged and excited about it. Those are important points.
Jason Juliano: Yeah, I think we're up at the hour. But one last statement. I mean even us internally. We're constantly looking at our net promoter scores and looking at our overall client journey and see the things we do great, but then also, look at the things we need improvement on, right? Then make tweaks along that journey. So again, continuous feedback, continuous monitoring will just help you develop your overall operations for your family office, or multi-family office.
Laura Macca: Yeah, and I think, I mean my final thoughts would be, the thing I think I've been trying to harp on. It's hard to recommend a specific technology, right? Every office is different, every client is different. We can make recommendations based on your fact patterns. So I really advise people not to jump to the technology and there's a process behind it to get there, even when you narrow it down. Like internally, like working with Jason and clients. What we do is, we go through the process and we actually get detailed business requirements and we narrow it down to maybe, it could be two, or it could be three vendors, right? We have very specific requirements that we ask them to show.
So it's not a generic demo, but it's part of the RFP processes, to show us specifically what this looks like for us, right? That's where we kind of, we're able to further narrow it down, because we'll find that it doesn't work for all the business requirements, a certain vendor. So, it's really important to kind of take the process and go through that process and-
Gregory Fritsky: Feel free to reach out-
Laura Macca: Someone asked about the cost of RPA, or the automation around AP. Jason, I don't know if you want to take that, or Greg. We can't really specify a dollar amount, but you give ranges, right?
Gregory Fritsky: Yeah, I did see that earlier, the cost. One of the things with RPA, obviously, there's a software component and an implementation component. So when we do our own ROI, it's understanding the key to buying these software packages. I think that with something like UiPath, if you're spending 20, 25, $30,000 to initially start, it gives you the ability to build a whole number of bots and processes. So if you're going to go in, don't just use that technology to do one process.
You want to do 10, 20, 30 and that's Jason and I and Laura, we've been taking it on a continuous, what can we do next? What can we do next? That, over time, you'll see the value, the cost is kind of fixed and the value just continues to grow. If you start looking at that from a savings of one FTE, the capacity of one FTE, or two FTEs, you can kind of start doing the math and you'll see the savings. So it's a value-
Jason Juliano: Yeah, and we-
Gregory Fritsky: Discussion. But if the costs can be substantially reduced, if you scale the application.
Jason Juliano: Yeah, we also have an AI and automation return on investment calculator. So we'll show you in real-time, like based on the FTEs that you have in place, how much we'll be saving you, based on leveraging these technologies, so you'll actually see a true return on investment analysis.
Laura Macca: I don't think we have any more questions.
Gregory Fritsky: Yep.
Laura Macca: Okay. Well yeah, thank you, everyone. Thank you, Greg and Jason.
Gregory Fritsky: And thank you.
Jason Juliano: Thank you, everyone for your time and we'll follow up with certain individuals that we haven't responded to yet, based on the questions that everyone listed today. But thank you for your time.
Laura Macca: Yeah, if anyone-
Gregory Fritsky: Thank you.
Laura Macca: Has questions, feel free to reach out to any of us, also.
Transcribed by Rev.com
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