• Compared to a ready-built CRM, the upfront costs of developing a custom platform are a lot higher and their time-to-deployment is a lot longer.
• Once it’s set up, firms that choose a custom-built platform have to bear the additional, ongoing costs and risks of maintenance, feature upgrades, compliance and security, and platform hosting fees.
• With a ready-built platform designed for investment bankers, MadeMarket helps firms lower costs and risks with a CRM that’s easier to set up, maintain, and use.

In an increasingly competitive, tech-driven market environment, investment bankers can no longer afford to operate without a proper CRM. While some firms with complex needs and large budgets choose to develop their own platform from scratch, more often than not, the additional costs and risks of doing so are too high for most firms.

In this article, we’ll break down what those costs and risks are and how a purpose-built platform like MadeMarket can help you decrease them while maximizing the return on your investment.

Compared to a ready-built CRM, the upfront costs of developing a custom platform are a lot higher and their time-to-deployment is a lot longer.

In the initial design phase, CRM developers and consultants which often charge by the hour, will need to be heavily engaged with you and your team to better understand your firm’s operational, technical, and data needs. One of the major challenges during this stage is that investment banking professionals don’t often understand how to translate their business and day-to-day workflow needs into the kinds of technical requirements engineers can use to develop products around them.

At the same time, engineers don’t often have a strong enough understanding of investment banking to take the lead without extensive involvement from senior bankers and various department leaders throughout the firm. Altogether, this information and communication challenge often results in slower development times, increased costs, and the development of products that don’t meet the unique needs of investment banking professionals. This in turn often leads to the development of unintuitive platforms that are difficult to use, with lower user adoption and engagement rates. Without generating enough business value for users in the short term with easy-to-use features that create tangible benefits, these in-house CRMs often struggle to generate a strong return on their investment over time.

After a few to several months, once the design phase is complete, the development phase, when the platform is being built, usually takes anywhere from several months to a few years. The amount of time firms spend during this stage largely depends on the size of the team they’ve hired and the extent to which they’ve been able to articulate their technical needs effectively during the design phase.

While a simple CRM could be built from the ground up in a shorter amount of time, the costs of doing so are hard to justify because a simple CRM is easy to buy. Once firms begin to consider the variables of cost and time-to-deployment for a CRM that’s designed around their unique industry needs and the market standards for a similar product, these variables begin to increase dramatically.

Good engineers are expensive, but in addition to developers and development managers, firms need to hire a handful of designers, quality assurance specialists, and ongoing support staff as well. For a firm with around 50 users or less, the direct, upfront costs of building a CRM over the course of three-plus years is often over $3,000,000. Meanwhile, for larger firms with several hundred to around a thousand users, it’s not uncommon to see upfront costs of well over $5,000,000 and reaching upwards of $8,000,000.

Looking ahead towards the first few months of using the platform, custom-built CRMs don't usually come with a user manual, training resources, or a dedicated customer support team. This can increase the amount of time it takes for a firm to get up and running with a new CRM, slowing down operations and increasing indirect costs.

Just as important to keep in mind are the opportunity costs of operating without a functioning platform during the design, development, and deployment phases. Similarly, it’s also important to think about the opportunity costs of using a platform that’s been built by a team without expertise in investment banking, since most developers a firm can hire are not exclusively dedicated to building products for the industry.

With MadeMarket, for example, users can save hundreds of hours per year and when we calculate the costs of lost banker output, the costs of building an in-house CRM are even higher. For smaller firms with about 50 users or less, these direct and indirect costs of building an in-house CRM are closer to $4,000,000 to $5,000,000. For larger firms, these numbers can reach over $20,000,000.‍

The MadeMarket Advantage: MadeMarket’s ready-built CRM helps firms significantly reduce upfront costs while supporting a much more rapid deployment time. As the only CRM that’s uniquely built for investment bankers, MadeMarket comes ready-built on day one with a variety of intuitive tools designed to answer a banker’s most important deal, business, and relationship questions, while helping teams save thousands of hours per year.

At MadeMarket, we’ve empowered hundreds of investment banks like MTS Health Partners, Atlas Technology Group, and Imperial Capital in the US and around the world. We’ve also learned a lot about the challenges and best practices surrounding a firm’s transition from one system to another. From helping your team to prepare and migrate its data, to training dealmakers and customizing features, our team’s unique capabilities help investment banks transition quickly and effectively. And while we offer a variety of options for building customized features, many firms find they don’t often need them.

MadeMarket also comes with a variety of free resources, ongoing training sessions, and extensive customer support to ensure your team has everything it needs to get started right.

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Once it’s set up, firms that choose a custom-built platform have to bear the additional, ongoing costs and risks of maintenance, feature upgrades, compliance and security, and platform hosting fees.

Upkeep and maintenance costs can include a variety of tasks like fixing software bugs, improving and developing new features, technical support, and everything else that might be necessary to keep your platform up-to-date and running smoothly. On average, maintenance costs typically amount to around 20 – 25% of the initial development cost annually.

Given the sensitive nature of your relationship and transaction data, robust security measures are crucial. That means there will also be the ongoing costs associated with maintaining and updating security systems, as well as ensuring the CRM remains compliant with any relevant data, financial, and privacy regulations, which can vary drastically.

If the platform's software and data are hosted in a cloud-based service, there will also be ongoing hosting fees, which can range broadly depending on the size of your firm. If not, firms will need to purchase and maintain the hardware necessary to run their software which can range between $35,000 and $100,000 per year for smaller to larger firms respectively.

It’s also important to remember that over time, an in-house CRM will need a lot of upgrades to improve existing features and keep up with industry standards, while working to accommodate any changes to the firm’s operations and technologies. Think, for example, how much artificial intelligence could change the work and technology landscape for investment bankers in just a few years. After a few years of building and refining an in-house CRM, firms will likely find themselves needing to go back to the drawing board in order to keep up with their competitors.

Despite the high costs, some large firms with big budgets believe they can justify their investment in an in-house CRM because they think they can build something that’s more tailored to their firm’s unique needs. Still however, most other firms don’t believe the investment is ever worth it, regardless of their size and budget, which is why the more common path towards a custom CRM involves tailoring a generic platform like Salesforce, or one that’s more ready-built for bankers like MadeMarket.

The MadeMarket Advantage: With a ready-built CRM from MadeMarket, the only ongoing cost firms need to consider is the cost of their subscription. Instead of trying to manage all of these unpredictable costs and risks to your firm and its operating system, MadeMarket manages all of it for one simple fee.

Beyond helping to control costs and decrease risk, MadeMarket empowers firms with an industry-leading platform, helping them stay competitive in an increasingly tech-driven capital markets environment.

Shifting gears from deal sourcing and client service toward building and integrating great tech is hard. Moreover, most CRM companies focus on building general-purpose products for a wide variety of use cases and don’t understand the unique needs of investment bankers and capital markets professionals. Trying to be everything to everyone, these generic CRMs are often expensive to integrate and difficult to use.

In contrast to a generic CRM, MadeMarket’s purpose-built platform is the only CRM that’s designed around the unique needs of investment banking professionals. With a more intuitive, ready-built platform, our platform helps firms dramatically increase the return on their investment over time.

Looking at the workflow efficiencies alone, MadeMarket helps firms generate cost savings of around 5% of their annual revenue through a number of productivity-boosting features.

With better data organized around faster workflows, MadeMarket can also help firms expand their funnel and increase conversions to source and close one additional transaction per year for every 5 MDs or one per MD over 5 years.

To learn more and explore what MadeMarket can do for you, connect with a member of our team to get started with a demo!