Working in the business, you know entity management is complex and ever-changing. More often than not, we find that organizations don’t have an entity management system in place. Those organizations are likely to face a number of unique challenges. Here, we talk about eight common pitfalls that organizations encounter managing their entities.
Challenge: information in silos
A critical challenge is that without an entity management system, there is no central repository for important documents. There’s no one place to go if you need to find the current or historical sites of directors and officers or get a clear graphic organization chart. We find that organizations typically have information in multiple spreadsheets and documents on various shared drives. They’re using programs like Visio® or PowerPoint® to manually build org charts.
Challenge: process bottlenecks
Another challenge for organizations that don’t have an entity management platform is that the legal department can become a bit of a bottleneck when other parts of the organization—like tax, or finance, or treasury—needs to access entity vitals. If there’s no self-serve, people have to ask to the legal department each time they need to access that type of information, which can create bottlenecks.
Challenge: not scalable
Another critical challenge to not having an entity management system is that you have to update everything manually, which is not scalable. This usually means that a person in the legal department is responsible for managing and updating core data elements, with no system or automation helping them stay on top of the changes. With these types of manual updates, it’s easy to make data entry errors or fall behind in terms of keeping up with the pace of change in your organization.
If you don’t have an entity management platform, it becomes really challenging for organizations to do even simple reporting, because all of your information is in a silo, making gathering insights really difficult. Without the ability to report, you cannot keep a pulse on what is in queue or show your value.
Challenges of having the wrong entity management system
In many cases, having some sort of entity management system is better than none. But when you have the wrong entity management system in place, you’re likely to encounter a whole separate group of challenges.
Challenge: entity management system is not intuitive
If an organization has bought a system that’s powerful but not intuitive, this can present a challenge. If the learning curve is too steep, it can be difficult for both power users and more casual users to integrate the platform into their workflow. In this case, it often leads to a lack of adoption across the organization because it’s just too difficult to use. As a result, the system starts to immediately lose value if individuals are not collaboratively working within the solution.
Challenge: standalone platform
The reality is there are a lot of entity platforms on the market that are just static databases that don’t connect with your other tools. With this type of solution, the expectation is that the administrative users have to enter every single piece of information. While this is a step up from having a spreadsheet (because there’s some reporting that would be built into that type of the database), without some sort of automatic flow of information into the solution, the burden is still on the administrative users.
Challenge: reporting issues
Another problem with some entity management platforms is that it can be difficult to create reports. In some cases, the standard reporting might be too rigid and not suit your organization’s needs. In other cases, reporting is just too complicated and it’s difficult to even build simple reports.
Challenge: no exit strategy
You might not be confronted with this challenge until you realize that you’ve outgrown your entity management solution and want to switch providers. Unfortunately, some vendors make it very challenging to get your information back. It’s sort of like the Hotel California where you can check in anytime you want, but you can never leave.
Having an exit strategy is important, because your needs as an organization may change. The system that you select today might not end up being the right system in the future. To avoid this situation, it is important to ask questions when vetting vendors, such as:
- What would happen if we were to change direction at some point in the future, and switch to another vendor?
- Are we able to get our data back?
- Can we get our documents back?
- What does that process look like?
Solution: choose the right entity management system
The easiest way to address all these challenges is to make sure that you choose the right entity management platform from the start. To help, we’ve put together some tips on how to select an entity management system that suits your organization’s needs, which you can use to help guide your search.
CSC is a leading provider of legal entity management solutions and can help your organization capitalize on all the benefits that an entity management system has to offer. Learn more today!
Want to learn more about entity management? Sign up for our upcoming webinar “New Tools for Improved Entity Management” on August 15, at 11 AM and 2 PM (ET). See all of our upcoming webinars here.