Along the technology journey toward automotive automation and self-driving cars, experts frequently talk about five levels of automation, ranging from no driving automation whatsoever (Level 1) to full driving automation (Level 5). Today's family offices might think about a similar spectrum when considering where they are in harnessing the power of automation to improve the way they get from here to there.
We may not have flying cars already like Back to the Future led us to expect, but surely we'll have regular self-driving cars soon, right? It seems like that topic is a common headline in automotive news lately. However, the reality is a little different, as explained by this article in Forbes:
“Despite the hype that liberation day will dawn soon, and cars will drive themselves, there's no realistic chance that full-on self-driving will be available before 2030, and then only in a tiny number of top-of-the-range sedans and SUVs, according to consultancy Accenture.”
Level 5, according to the article, is a state of automation that assumes control by a computer with no steering responsibility for humans. And that level of total control is still some time away: “A L5 system that can drive from door to door in the whole of Europe and North America at least, for at least 80% of all itineraries and with 0 accidents and disengagements” is at least a decade away, researchers say.
When you zoom out and look at the big picture, all cars do essentially the same thing, but other considerations determine the make and model you buy. One factor could be the degree of self-driving, and a more fully automated self-driving car may imply a higher-value luxury car. And yes, Rolls Royce has a self-driving concept car. Of course, the other option is a Rolls Royce with a chauffeur!
So, what's the analogy with family office operations?
Business operations in a family office revolve around processing data and information, moving it through various defined processes to achieve the desired outcome. It's perhaps analogous to driving a car from point A to point B, obeying all road rules in the most efficient way possible while avoiding potential obstacles and problems. Is it easy to see the benefit of a “self-driving family office”?
In most family offices today, the core problems to be overcome are the lack of an integrated technology system and the resulting reliance on manual processes and procedures. To use the self-driving car analogy, these family offices are at Level 1 or 2, at best. They're relying on human work to do almost everything in their offices.
Is self-driving possible in family office operations? Yes, and you do not have to wait until 2030.
Depending upon the business process and workflow, Level 5 is attainable. Fully integrated family office software is at the pinnacle of family office technology. This next-gen tech provides a platform that automates the business processes and workflows behind transactional work—ultimately enabling family office professionals to focus on data-driven analysis, recommendations, and decisioning—what all family offices should strive to be spending more time on.
Here’s one example of how an integrated platform can help family offices automate critical processes and improve accuracy: Say that a custodian incorrectly enters a digit for a capital call transaction and sends the wrong amount. The exception reports that an integrated platform can automatically generate will catch the mistake the same or the next day, allowing the error to be rectified quickly and with minimal impact to operations, instead of the mistake going unnoticed for potentially weeks.
Another way integrated family office software can immediately improve efficiency in a family office is through automated reporting. In many family offices, data is siloed, and creating a unified, holistic report to share with family members and stakeholders can take staff days or weeks to produce. At the same time, they cross-check spreadsheets and compile them. This is both time-consuming and mistake-prone. Fully integrated platforms centralize all the information so that data is quickly compiled into customizable, interactive reports that can even be automatically generated. This automation frees up staff to do higher-value tasks, improves accuracy, and reduces risk. Just like the Level 5 self-driving car of our dreams!
We might be waiting more than a few years for a car that drives itself while the “driver” naps or reads, but the future is now for family offices. Take advantage of all a fully integrated technology platform can do for your team. A family office leveraging technology, like the coming Level 5 automobile, can drive itself. Imagine what your family office can achieve with its own personal chauffeur and a fully automated self-driving platform.