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Is Excel digital transformation's most significant competitor?

While Excel continues to be the mainstay of the industry, is it holding back firms from technology solutions designed for growth?
Christopher Bloechle
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Many firms find that the adoption of new technologies can be intrusive to time and cost drain, businesses and a resource, which results, to a certain degree, the slow adoption of technology solutions within the alternative asset industry and specifically private equity. Even as firms lament not being able to leverage their data efficiently, these issues are intertwined with concerns about cybersecurity and data privacy which explains the reticence to embrace new-age cloud-based solutions. Additionally, the fear of the unknown or unproven (newer technologies) and breaking existing business processes leave private equity professionals on the fence. This furthered by an apparent lack of products or systems not specifically designed for the private equity industry to choose to “get by” with Excel.  

Many times, Private Equity firms lack an internal champion which serves to hinders the adoption of technology, leading to a status quo being maintained with Excel.  

The journey to digital transformation

Despite Excel remaining the DeFacto go-to-solution for most business processes, technology solutions have made inroads into critical business processes such as portfolio and risk management, investor reporting and pipeline management. Firms are actively trying to modernize core processes, often in response to expectations from investors and auditors as well as regulatory and compliance pressures.

Plot twist, it is not really about the digital transformation at all

The term digital transformation has become an overused marketing "buzzword”, thereby losing its real meaning - fundamentally, digital transformation is about accessing efficiency gains, improving business processes and being able to scale. Firms often focused on the challenges of implementing digital solutions rather than transforming how they think, act, and perform. The result? They are trapped into focusing on the difficulties of implementation rather than the end goal of transformation and, therefore, widely accepted tools like Excel as a simpler means to an end.

Moving off Excel is part of changing how you think, act and perform

There is no denying that Excel is a powerful, flexible tool, but it was not created to help firms manage funds, period. Excel falls short of the requirements for even the smallest of firms, and if your firm is growing or looking to grow, it can quickly become your Achilles heel.

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