Market funds. The unsung heroes behind pretty much all super cool, revenue driving co-marketing efforts. They’re Samwise Gamgee carrying Frodo up the mountain so he can have his big moment destroying the one true ring. They’re R2D2, working overtime to fix problems and unlock doors to pave the pathway for the Jedi’s glory. They’re — ok, you get it.  

In all seriousness (and my recent re-watch of the LOTR trilogy aside), market development funds (MDF) and co-op funds play a crucial role in driving channel partner engagement and revenue. When managed well, they can incentivize partners, boost brand reach, and make sure every marketing dollar counts.  

But here’s the thing: managing these funds isn’t just about cramming everything into spreadsheets or relying on makeshift tools. It requires a solid specialized and scalable software solution. 

Before deciding whether to build an in-house platform on the back of an existing tool in your tech stack or to invest in a dedicated solution, you need to consider all of the factors. You know, like the hidden time and resource costs that come with building and scaling your own solution. Or what getting slapped with a hefty fine (and sparking a feud with your legal team) due to compliance issues could mean for your company and your own professional future.   

This blog dives into everything you need to know to make an informed decision and why specialized software is the clear winner.  

Why Market Funds Are So Complicated to Manage 

Whether they’re Market Development Funds (MDF) or Co-Op funds, market funds are designed to drive channel engagement and fuel co-marketing efforts. But managing them effectively is far from simple. 

The truth is, running an MDF or Co-Op program requires more than just good intentions and a few spreadsheets. It demands a robust system that can handle multiple layers of complexity while ensuring accuracy, compliance, and scalability. Let’s break down the biggest challenges: 

• Complexity: Managing market funds is no simple feat. You need expertise in back-end integrations, financial tracking, and crafting an intuitive user experience. But wait—there’s more. Unlike internal tools, market funds platforms need to serve external stakeholders—your channel partners—who demand a sleek, seamless experience. 

• Scalability: Market funds programs evolve. New partners, new regulations, and new features to add. And what works for a small program may break down when your partner engagement grows, or fund allocation gets more complex. 

• Compliance: Compliance isn’t just a box to tick; it’s a requirement. Fund distribution, financial tracking, and reporting regulations are constantly changing—and not staying compliant could mean hefty fines and a very unhappy legal team. 

• Services (Claim Audits + Payments): In addition to the tech systems, services related to claims and payments keep things running smoothly. Even with automation, claim audits still need oversight to prevent errors, compliance risks, and financial losses. On the payments side, most systems are designed for vendors, not partners, making scaling payments a challenge. Reconciliation becomes a full-time job, slowing teams down and adding unnecessary costs. 

Managing market funds without a dedicated solution is like trying to build a house on quicksand—it might look stable at first, but the foundation is shaky. That’s why specialized software is essential to keeping your program efficient, compliant, and scalable from day one. It can: 

• Streamline workflows: Make fund allocation and tracking easier. 

• Improve accuracy: Reduce errors and improve transparency for everyone involved. 

• Scale effortlessly: The right platform grows with your program. 

• Compliance without the headache: Stay on top of regulations, without manually tracking changes. 

The question then becomes whether you and your IT team want to try and cobble together your own framework or if you want to buy a bespoke solution that’s been custom created by experts for this particular purpose.  

The Pitfalls of In-House Development 

Building a custom market funds management solution might seem appealing at first. After all, your IT team knows your systems, and it feels like you’ll have full control over the outcome. But the reality is often far more complex—and costly—than it appears. 

The Hidden Costs of Development 

It’s easy to underestimate the sheer volume of resources needed to develop an in-house solution. Beyond initial coding, you’re looking at continuous maintenance, troubleshooting, updates, and compliance monitoring. These hidden costs can quickly balloon, especially as your program scales or as regulations change. 

Plus, you’re not just investing money—you’re investing time. Building a robust, reliable system from scratch can take months (or even years), during which your team’s attention is diverted from other critical projects. 

IT Bandwidth and Expertise 

Even if your IT team is technically capable of building a solution, that doesn’t mean they should. Creating a market funds management platform demands niche expertise, from financial tracking to compliance management to partner-facing UI design. 

Your IT department likely has higher-priority projects that align more directly with your business goals. Stretching them thin to build a market funds system can delay other critical initiatives and result in a subpar tool that doesn’t fully meet your needs. 

The Iceberg Problem: Tech Is Just the Tip 

When it comes to market funds management, technology is only part of the equation. Under the surface lies a massive infrastructure of services that support the tech, like claim auditing and partner payment processing. 

For example: 

• Claims Audits: Even automated systems need human oversight to ensure compliance and accuracy. 

• Payments: Corporate finance systems are usually built to handle vendor payments—not partner payments—making reconciliation a nightmare. 

• Reconciliation: Without a specialized system, you may end up dedicating entire teams to resolving discrepancies and tracking down errors. 

In-house solutions often fall into the trap of being "too smart for their own good"—trying to force existing tools like CRMs into roles they weren’t designed for. This cobbled-together approach leads to inefficiencies, data silos, and constant workarounds. 

The Case for Buying Purpose-Built Solutions 

Instead of reinventing the wheel, purpose-built market funds management platforms offer a faster, more reliable way to streamline your program. Here’s why investing in specialized software is the smarter choice: 

Purpose-Built for Efficiency 

Purpose-built solutions are designed from the ground up to handle the unique challenges of market funds management. They come equipped with intuitive interfaces, automated workflows, and compliance tracking baked right into the system. This means less manual effort and fewer headaches for your team. 

Ready-to-Use Integrations 

Leading market funds platforms offer seamless integration with your existing tech stack—whether it’s your CRM, ERP, or financial management system. This ensures data flows smoothly between systems without needing custom-built connections. 

Reduced Maintenance Burden 

When you build in-house, every update, bug fix, and compliance change falls on your IT team. With a purpose-built solution, those responsibilities are handled by the vendor—freeing up your internal resources to focus on core business functions. 

Proven Reliability and Ongoing Support 

Unlike a custom build that may never be fully “done,” purpose-built solutions are continuously improved by dedicated product teams. You also gain access to customer support and technical assistance, ensuring your program runs smoothly from day one. 

Lower Total Cost of Ownership (TCO) 

While it might seem cheaper to build your own system upfront, the ongoing costs of maintenance, troubleshooting, and compliance updates quickly add up. In contrast, purpose-built software typically offers predictable pricing models and delivers a faster ROI by eliminating inefficiencies and manual labor. 

Speed to Market and Agility 

Deploying a purpose-built solution means you can get up and running faster—often in a matter of weeks rather than months. Plus, as your program scales or changes, updates and new features are pushed automatically, without needing to initiate lengthy development cycles. 

Overcoming IT Resistance to External Tools 

Ah, IT resistance—the final boss in your quest for a streamlined market funds management solution. They mean well. Really. But IT teams often fall into the “we can build it ourselves” trap, convinced that cobbling together a custom solution is cheaper and more controllable than buying something purpose-built. Spoiler: it’s usually not. 

Here’s the reality: building an in-house platform isn’t just a one-and-done project. It’s a never-ending saga of maintenance, bug fixing, and keeping up with changing regulations. Plus, every integration point becomes a potential pain point. Meanwhile, your purpose-built solution? It’s already equipped with pre-configured connectors for CRMs, ERPs, and financial systems, and the vendor handles all the updates. 

Common IT Objections and How to Respond: 

• “It won’t integrate well with our current systems.” 
  • Reassure them that leading market funds platforms are designed with integration in mind, featuring out-of-the-box connectors for major CRMs and financial tools. 

• “We’re worried about data security.” 
  • Emphasize that purpose-built solutions come with robust security protocols, data encryption, and compliance monitoring baked in. Share documentation and certifications to back it up. 

• “It’ll be more cost-effective to build it ourselves.” 
  • Present a cost analysis that highlights the hidden costs of in-house development—like maintenance, compliance updates, and IT bandwidth—and how they outweigh the upfront cost of a purpose-built tool. 

• “We don’t need another tool to maintain.” 
  • Explain that maintenance is on the vendor, not the IT team. Automatic updates and ongoing support are part of the package, so they can spend their time on higher-priority projects. 

• “We can just customize our existing tools.” 
  • Point out that repurposing CRMs or ERPs for market funds management often leads to inefficiencies, data silos, and constant workarounds. Purpose-built software is designed specifically to handle these challenges without forcing a square peg into a round hole. 

So how do you get IT on board? Treat them like the experts they are. Involve them from the start. Show them the data—how much time and money an in-house solution would really cost versus an off-the-shelf option. Offer to run a pilot to prove how seamlessly the new tool integrates with existing systems. 

The bottom line: once IT sees that a purpose-built solution means less hassle for them (not more), they’ll be way more likely to wave the white flag and join your cause. 

Conclusion 

Market funds programs are too critical to be managed with inefficient or makeshift tools. While in-house solutions may seem appealing at first, they often lead to significant challenges in complexity, scalability, and compliance. Purpose-built software eliminates these pain points, ensuring streamlined fund management, regulatory adherence, and superior experiences for both internal teams and channel partners. 

At the end of the day, investing in specialized market funds management software isn’t just a convenience—it’s a strategic decision that drives better results, faster. 

Curious how a specialized market funds management solution can help you meet your goals? Let’s chat today.