Why Did We Set It Up This Way?

By Jessica Parker, founder of JP Advisory.

Eighteen months after the new investment reporting platform went live, someone asks a question like: why is this bank account connected and not that one? Why was history loaded for one custodian account and not another? Why was one family member's report configured differently from another family member’s report? Why was this personal asset included and that one left out?

Everyone in the room is sure there was a good reason at the time, however no one can remember and it was not written down anywhere.

I have watched this happen, and I have caused it!

When you are the person making most of the decisions during an implementation, you carry the reasoning in your head, and it feels obvious why you made specific choices. However, 12 months pass and even you struggle to reconstruct why you did something in a particular way. The problem is made worse when that person leaves, as you are left with a platform that works but no record of why it works the way it does. 

There are two simple documents that go a long way to help this issue.

The first is a decision log. When you set an investment up a particular way, you write down the topic, the decision you made, the reason behind it, and who was involved. That is the whole thing. Why you connected one custodian feed and not another. Why you configured a report differently for two stakeholders. Why some investments carry full history and others do not.

The second is a parking lot. During any implementation, good ideas arrive that are not requirements for phase one. Better analysis you cannot build yet, a report someone would love in a year, an integration with another system that would reduce manual steps, a refinement you want to come back to. The parking lot is where those ideas live so they are not lost. Without somewhere to hold them, the ideas get forgotten, because they were only ever sitting in someone's head with no owner attached.

These documents do not need to be complex or over-engineered; simplicity is the point. The moment they become a project to maintain in their own right, they stop being kept. 

I think about operational context a lot, and one of the things that strikes me is how normal these tools are everywhere except family offices.

Ships have kept logs for centuries. A ship's log records the important events in the operation and navigation of a vessel, and when something goes wrong, investigators reach for it the way an aviation inquiry reaches for the black box. Scientists keep a lab notebook for the same reason. It is a contemporaneous record of what was done and why, detailed enough that someone else can reproduce the work, and it carries real legal weight when the question of who invented something first has to be settled. 

Software engineers formalised the same habit. In 2011, the software engineer Michael Nygard wrote a blog post called "Documenting Architecture Decisions", which introduced what is now known as the Architecture Decision Record. His argument was that large documents go unread and unmaintained, so the reasoning behind important decisions gets lost along the way. Teams then make new decisions that undo earlier ones, because no one remembers why the earlier ones were made.

His fix was a lightweight record of a single decision and its rationale, small enough that people would actually write it. The collection of those records becomes the project's decision log.

That idea translates almost directly to our world. A family office reporting platform is the accumulation of hundreds of small decisions. The decision log is the record of how it came to be the shape it is, for the specific family office that is implementing it.

When I worked inside a family office, the reason I pushed to implement investment reporting technology in the first place was what I used to call the ‘hit by the bus’ strategy. If something happened to me and the General Manager, who would hold the context of the family office operations? The answer was nobody, and that really concerned me.

Lean offices run on the knowledge in one or two heads, and while those people are there, everything works. However, when a key person does leave, a large amount of institutional knowledge often leaves with them. 

The value of these two documents shows up in a few ways. 

The first is consistency. Once you have documented why you set an investment up a particular way and under what conditions, the next similar investment is easier. The reasoning is already established, and you can follow the same approach rather than solving it from scratch and hoping you remember how you did it last time.

The second is continuity. A successor inherits your reasoning alongside your configuration. Onboarding a new person to look after the system becomes a matter of reading and digesting the reasoning, rather than reverse engineering.

The third is where context has become more valuable than it used to be. Operational context has always mattered, and it matters more now, because it is what makes AI helpful to you. A well-kept decision log is the raw material an AI can use to draft an onboarding guide for a new starter, or a briefing note on how a particular investment is treated.

Think of the decision log as the knowledge centre for how the platform applies to your specific family office, sitting alongside the generic knowledge centre the vendor provides. AI needs context as much as it needs data, and this is how you give it that. 

The parking lot needs to be maintained and kept as a living document. The easiest way to do this is to assign an overall owner, as well as an owner per parked item, and revisit it at natural checkpoints, for example the next phase of work or the annual review.

Priorities change over time, and so does the technology, both the vendor platform and the rest of the family office's tech stack. This review allows you to continue to determine if the items in the parking lot are still relevant, and how each item should be prioritised.

I have been on the family office side implementing the platform, and on the vendor side as a solutions consultant helping other offices set theirs up, and I think vendors have something to gain here too.

A simple decision log and parking lot template, handed over at onboarding with ten minutes spent explaining why they matter, would cost a vendor almost nothing. However it supports a successful implementation over the long term, which is in the interests of the vendor as much as it is for the family office.

Two plain documents, kept from the first day. The topic, the decision, the reason, and who contributed to the decision. Simple enough to survive contact with a busy office, which is the only kind of documentation that ever does!

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Jessica Parker is the founder of JP Advisory, providing independent technology and operational advisory services to family offices. She has worked inside single family offices, on the vendor side as a Solutions Architect, and now as an independent advisor.