Private Equity (PE) firms’ operational efficiency is critical in determining their success, especially against shifting market conditions. PE firms typically have complex inter-departmental processes managed through Excel spreadsheets, email communications, and other disparate applications. While Excel and Outlook are essential tools, an Enterprise Task Management system is far more effective in organizing tasks, providing a centralized place to see the status of critical path items, and creating an optimal Private Equity foundation for your overall success.  

FinServ has spent 18 years working with our clients to enhance their business processes. In the past few years, we have focused on assisting our Private Equity clients in Private Equity in leveraging task management software to address some critical areas of their operations. From this experience, we have gained great insight into how a PE firm’s internal operations can be classified into six main stages and how task management tools can optimize their operations on a day-to-day basis: 

Through our work with several Private Equity clients, we have found that the success of implementing an Enterprise Task Management system comes down to a few critical success factors. 

• Ease of Use & Implementation – Sophisticated workflow tools can provide great automation to operations. However, these tools are highly complex and take many months to implement. They often require very technical resources to set up and code solutions. Task management tools offer a simple, intuitive setup that results in implementing a solution in days or weeks, allowing users to see results quickly. 
• Super Users Drive Adoption – Business users can quickly learn how to set up their projects in a Task Management tool, becoming early adopters who share their successes with other groups. Users have set up issue-tracking projects that have quickly spread to several other departments when they share their success stories. 
• Cross-Departmental Collaboration – One client was struggling with the coordination of onboarding employees between their HR and IT departments. The HR team leveraged the Task Management tool to share the new hire process with the IT team. The IT team created its project, which tracked each detailed step of setting up a new employee, including communications with external parties. The new process resulted in a streamlined process where every new employee gets what they need to succeed, resulting in a great first impression of a process often filled with issues at many other firms.
• White-Glove Support – Even if a system is simple to implement, it does not mean every user can handle it independently. Our firm focuses on providing users with all the support they require, including helping them to model their project if desired and providing them with helpful best practice approaches to everyday task management items. When a client has a question about how to do something in the system or something is not working the way they expect, we respond immediately, ensuring they maintain their enthusiasm for the system. Eventually, the users become self-sufficient, but early on, we make sure they have a large degree of handle holding and support.  

The Task Management Tool Marketplace and Deciding What Tool is Right for Your Firm

Different types of task management software tools are available in the marketplace. While some are free and relatively simple, others need to be bought and can be deployed firmwide. We have found that the best Task Management tools provide these core capabilities:

Outside of the key benefits from our extensive work in this area, we have found that there are three main benefits of using task management software for a PE firm: 

Greater Transparency:  

Given that PE firms receive information from various sources – third-party vendors, market data providers, disparate internal systems, and ad-hoc data dumps – it is essential to translate all the relevant information into clearly defined workflows in a task management system. The structured workflow enhances operational efficiencies and provides greater transparency, which is especially important when multiple tasks require inter-departmental cooperation, e.g., when a deal closes, in addition to the Deal Execution team, Tax, Legal, Valuation, and Cash Management teams, etc., need to be notified. Different teams can track their combined workflow and easily compare each other’s progress in the task management system.   

Task management systems can also accommodate the underlying dynamics of a workflow by providing capabilities such as approval tasks, dependencies, etc. For example, if the post-deal closing workflow cannot be started until a deal is closed, the workflow can be structured for the post-closing workflow to be triggered only after a deal is closed. Similarly, approval tasks can be created so that unless a task has been approved, the user cannot progress to the following task. Typically, these are ‘soft blocks’ that can be overridden but are crucial in preserving the workflow structure.  

Greater Integration:  

Private Equity firms use multiple tools to track their operations. For example, many PE firms track the Deal from inception to its funding in Salesforce or other CRM systems.  

Most of the clients we have implemented task management systems used to track this info in their email systems which could have been more efficient and decentralized.  After our implementation, the task management tools connect with different software, such as Salesforce, to ensure the Deal information flows automatically into a central place where all deals and statuses are tracked.  When a Deal is funded, it flows into the task management system in a pre-defined workflow and alerts the relevant teams to complete the assigned tasks.  

Where email can come in handy is to notify a person when they have something important to take care of in the task management system. Task management systems provide more intelligent connectivity with email communications. Through their built-in integrations with Outlook, Gmail, etc., emails can provide detailed information from the task management system and link the user directly to the task they must act upon.  

Some PE teams, like Investor Relations, constantly receive emails from investors and prospects. Many task management tools allow emails to be forwarded to a specific project. They can intelligently scrape critical information from the email to automatically create a task for the IR team to act upon. By providing the ability to translate emails directly into tasks, the task management systems significantly reduce the manual effort required to distill the information into actionable items and assign it to individuals as needed. 

Task management tools can also integrate with file-sharing software such as SharePoint Online. Private equity internal operations rely heavily on spreadsheets housed in a central location, e.g., SharePoint. Task management software can integrate with SharePoint, allowing users to attach their files, located in SharePoint, to the workflow as needed. Users can easily be redirected to the SharePoint file through the task management software whenever they need to access the files while completing their tasks. Task management tools can maintain the same privacy rights as SharePoint, thus protecting the security of sensitive documents. 

Greater Reporting:  

Practical task management tools report essential metrics in real-time, allowing users to draw insights about any workflow’s progress. For example, a task management system can produce graphics and visualizations on multiple metrics, such as the number of tasks completed, the number of tasks assigned to a specific user, etc. This allows an executive to quickly see projects or processes in trouble or critical staff members whose workload is too heavy. 

Teams can use these reports to easily track the overall project’s progress and gauge individual members’ performance. For example, through sorting and filtering capabilities, the task management systems allow the users to filter the tasks by an assignee and check if they have completed them on time. Additionally, if a task remains incomplete beyond the due date, it will be highlighted, and the assignee will be notified accordingly. 

Moreover, these reports can easily be exported from the system. Flexible reporting options allow users to customize the reports according to their needs. This provides a quick and effective way to fully understand the workflow’s progress and ensure that delays can be identified promptly.  

Conclusion

Private Equity firms have complex internal operations and continue to rely too heavily on spreadsheets, email, and disparate application software to track their internal operations. These methods could be more inefficient and error-prone, and valuable energy and time are often spent searching for the data to verify its accuracy.  

Adopting a task management system can streamline the workflows across multiple teams and provide greater visibility of each team’s performance. Centralizing all tasks in one system makes it easy for line-level staff or senior executives to get the information they require quickly.  Greater transparency ensures that any bottlenecks can be easily identified and addressed, strengthening organizational transparency and efficiency.