The Path to Successfully Implementing a Portfolio Monitoring System in Private Equity

September 28, 2022

When implementing a new system, it can seem like an idyllic fairytale. You know that everything is going to change and can't wait for what's coming next. But before the project is considered a success, you need to make sure that your implementation is done correctly.

[Editor’s note, this is the second installment in Lionpoint’s series on portfolio monitoring software. For the first article on system selection, click here.]

Portfolio monitoring software is an essential tool for helping organizations manage their risks by providing visibility into portfolio company performance. However, unless it’s implemented correctly, the desired benefits of this technology won’t be realized. The most successful implementations share a common goal; understanding how this new software will interact with all the different components of their organization.  Below you will learn more about these tools, as well as how to make sure your implementation goes as smoothly as possible so your LP’s needs are met quickly and accurately.

How to get started

Introduction of Project Governance

The first step in any implementation is to introduce project governance, and define early on who are the key stakeholders and key business users that make up the project team. Key stakeholders in this context, will be the team responsible for the success of the implementation.

The ideal key stakeholders group would fit this profile:

  • In a senior leadership position
  • A small team that can make key decisions early and quickly
  • An understanding of technology and the data architecture of their organization
  • Have experience with managing small teams
  • Implemented other technologies successfully throughout the organization

Identifying key business users early on will be important in getting the project off the ground quickly, as the size of the group will lend itself to many scheduling conflicts. These key business users will be critical in communicating current processes in-place, as well as setting the foundation of where and how this new tool should fit within their workstream.

The ideal key business user group profile would be:

  • Power users of portfolio monitoring data
  • Strong knowledge of current processes in place within the organization as it relates to portfolio monitoring data
  • Maintain output reports that are trying to be recreated using the new software as their data source
  • Have bandwidth for parallel testing of system-developed reports before a firmwide rollout
  • Have bandwidth to review demonstrations of product advancement from key stakeholders and provide feedback
  • User group should cover many different verticals (ensure full scope of data collection are identified)

With this core project team in place, a reoccurring weekly status call should be set up for the key stakeholders within the organization. This call should be used as a time to provide updates on progress made during the past week, alignment on work over the next 1-2 weeks and any risks or blockers that need to be addressed. Firms should also consider creating a role within the organization that can help organize and manage the project effectively through different stages of the process.

Planning and Scoping Requirements

With the proper project team and governance in place, it is imperative to start scoping out key business requirements through working sessions with key business users. The goal of these gathering sessions will be to understand a day in the life of portfolio monitoring data and how it fits into the broader organization.

Common questions asked during these sessions would be:

  • How is data collected from portfolio companies? – Understand how data is collected and start planning a future state collection process in lockstep with your new tool
  • What is the current state of your historical data that you are looking to migrate? – Define the level of work needed for the data migration and reconciliation efforts
  • What reports are developed downstream that utilize portfolio monitoring data? – Reporting outputs are reviewed early in an implementation to ensure that data collection inputs are sufficient
  • Do these reports downstream use other data sources? – Determine if there is a need to integrate with your source of cash flows for cross-functional reporting (accounting system). Determine if there are future state integration needs for an output report that live within the likes of Excel, Tableau, PowerBI, Anaplan etc.
  • What processes and output can be automated with this new technology – This can include any and all wish-list items that the business user would ideally want solved with this new technology

Through these working sessions your organization should begin to understand the scope of the work involved, and begin tailoring a project plan with milestones and dates.

How to Define Success

To ensure you’re on the right track with your implementation, here are some success criteria to keep in mind:

  • Design for Data Quality and Reliability – Enable a sustained trust in data whereby all departments reliably pull data from the PM tool
  • Product Literacy – Ensure key business users of the product are well-trained and have documentation to onboard new hires
  • Firmwide Adoption – Wide adoption of the product within the firm will contribute to the longevity of the product and expansion of its use
  • Single Source of the Truth – Eliminates confusion, reduces validation and rework activities
  • Organizational Alignment – Ensure KPIs for key process participants are aligned to objectives
  • Clarity of Ownership – Clarity on business unit owners of the platform, as well as owners identified for all the new processes involved with the new PM tool
  • Automate Activities that Drive Value – Collect financials efficently and develop output reports that are automated
  • Auditability and Traceability – Clarity on key financial data with an easy-to-follow structure for third-party auditors
  • Codification of Process – End-to-end process standardization drives consistency and quality of data,
  • Advanced Analytics – Develop exit forecast analysis and “what if?” scenario analysis by leveraging reliable PM data and other data sources

Common Pitfalls of an Implementation

When implementing a new system, it can seem like an idyllic fairytale. You know that everything is going to change and can’t wait for what’s coming next. But before the project is considered a success, you need to make sure that your implementation is done correctly.

Here are some common pitfalls and mistakes to avoid:

  • Lack of detailed requirements and documented business processes prior to selection
  • Lack of business process and resources to support implementation
  • Under-estimation of the data migration requirements (e.g., quality of existing data)
  • Prioritization of user interface (look / feel, mobile capability) over core data capability
  • Lack of user-adoption outside core power users
  • Lack of testing of fund examples with proof of concept / pilot

How we can help

Where Lionpoint fits within your implementation is both as an extension of your core project team, as well as an extension of the project team on the portfolio monitoring vendor side.

On the vendor side, Lionpoint acts as the bridge for understanding your operations and bringing our industry expertise to customizing the tool to your needs. On the client side, our consultants understand that employees within your firm have full-time jobs, and our goal is to provide the human capital necessary to support your implementation.  In this implementation support role, Lionpoint will typically provide the following roles through engagement:

  • Business Analyst – Acting as a go-between for the vendor and client teams
  • Project Manager – Responsible for coordinating the implementation activities across all parties, developing a change management program, management of budget and project plane
  • Solution Architect – Providing industry expertise to assist in the design of an effective post-implementation system architecture

To take the first step in learning how Lionpoint can help empower your firm, fill out the contact form below or email Mike Tracy at

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