Given the implications of differing approaches to syncing email communications adopted by competing platforms in the private equity and venture capital CRM space, PE Stack clients are faced with a major philosophical decision early in the selection process -

Do we link and ingest all email communications to the platform automatically, or do we have users determine what gets synced?

After working with a variety of firms in terms of size, investment stage, and team focus we do see trends emerge for which type of approach certain types of firms gravitate toward or tend to dismiss – and not always with good reason.

As this is the area where we are most likely to gently push back against certain misconceptions which clients hold, we put this piece together to provide some clarity on how firms can balance privacy concerns against value gains when thinking about email ingestion.

Privacy & Security

As this tends to be ‘front of mind’ during these considerations, we’ll tackle this area first. Concerns around privacy and security are typically driven by fears of who can see what, with potential for sensitive or personal information to be widely available within a firm.

The easiest way to assess risk is to think of a CRM as containing three key applications:

The front-end, user-facing application
The back-end database where all the firm’s data lives, and…
The privacy and permission control layer, which gates and controls the flow of data between the back and front end

When looking at a platform where a large amount of potentially sensitive data sits in the database, the importance of a robust control layer cannot be overstated. For many clients, it will be important for the platform to provide granular options around who can see what and who can set these permissions.

For example, firms may set up a platform so that it is possible to see where communications have taken place, but not show the email body itself. Some may wish to set such controls at the user level. Each firm takes a different view of this, although we do note that VC firms tend to be far more accepting of platforms powered by direct connections to email servers compared with private equity.

The point we would emphasize here is that buyers should not dismiss platforms out of hand based on security concerns without investigating what controls exist to manage risk. For platforms where ingestion is more user-driven, such controls may be less important.

Is More Data Better? What about Garbage in, Garbage Out?

Platforms that pull all emails directly from a server offer some big advantages in being able to use this data to power relationship intelligence functionality which can both map and predict the strength of relationships between the firm and external entities.

The presence of comprehensive email data can also be very useful when seeking to understand the background and context of relationships with individuals and businesses. The more automated and comprehensive the ingestion, the lower the risk that valuable intelligence is lost, which is not always a function of users failing to input data and can be due to conversations and relationships which seem unimportant in the present becoming more relevant in the future.

We do hear some counter-arguments to the idea that more data = better, some we can dismiss out of hand, while others have more validity.

We would dismiss the idea that ingesting all emails automatically can lead to users having to wade through a lot of meaningless intelligence before finding relevant information. Platforms predicated on automatically ingesting all emails do not intend for users to access this raw data directly, even with security settings set to a minimum.

More valid are considerations around duplication and general data quality. Platforms where ingestion is gated by the user are less likely to see duplicated contacts and business entities where multiple URLs or email addresses are in use for example. Automated ingestion may fail to pick up on cases where individuals switch jobs or have roles at multiple organizations without manual intervention.

In certain cases, user-driven ingestion can work better in cases where a more complex CRM structure is in place and there is a desire to log email communications to, for example, specific deals or with reference to specific relationships. Where CRM is paired with document management, ingestion via an email client plugin can also be advantageous.

Some Maintenance is Inevitable

Ultimately, the key point to bear in mind is that some maintenance is always going to be necessary, it’s just a question of where this will be focused and how important it is for the use case. Platforms with more automated ingestion will require users to be mindful of issues with duplication and may require manual intervention to ensure intelligence is not hidden away.

Platforms which rely more on users to enter data manually naturally run the risk of poor adoption from individuals or wider teams and may require more management and oversight.

Weighing these factors can be a cultural consideration and should also incorporate thoughtfulness around the use-case for the platform.

What is the best way?

When we say “it depends”, this isn’t just a classic cop-out driven by our desire to not upset some of our Vendor Partners. Buyers in this space must consider their specific requirements and consider platforms and the ingestion methods they offer within this context. And of course, there are many other factors which come into play when considering the right front office platform which we have not even touched on here.

That said, there are certain scenarios which we would tend to avoid:

Completely manual data entry
While this is acceptable and even valuable as an option for capturing emails, it is to be avoided where this exists as the sole method. Even the most basic version of the generic sales platform Pipedrive allows users to add emails by forwarding them to the platform. Our expectation would be to see integration options via an email client plug-in, some of which are using advanced technology to extract contact information and documents from email communications to make life easy for clients and maintain a robust database. This relates directly to the next point…
Selecting the wrong email client
Some CRM platforms will build a Microsoft Outlook plug-in and simply leave it at that. Although we are seeing more firms especially on the VC side using G-Suite, plug-ins here are going to be more limited – which may not be a concern, but it is a factor to consider. For new/smaller firms setting up their own IT in-house we strongly recommend buying O365 directly from Microsoft and not from a third party such as GoDaddy as we have found plug-in compatibility issues in such cases.
Failing to consider security issues
While platforms built on a broader email ingestion methodology tend to have tight controls around privacy and security, it is essential to get this set up properly during implementation and ensure an appropriate ongoing policy toward email is in place and communicated to anyone new that joins the firm.