By: Sean Semenetz and Dan Olley
Whether you are a local credit union with $100M in assets or a multi-billion dollar national bank, investing in a new software solution is one of the most important decisions you will make. Every purchase from an entirely new core banking system, to a simple loan origination solution can have a significant impact on your margin these days. As consumers in the banking industry come to rely more and more upon technology, it is imperative that your financial institution provide efficient and convenient solutions for both internal staff and the account holder. However, investing in the technology that makes the most sense for your staff and account holders can be a real challenge. So what steps can you take to help ensure that your final selection generates the type of return on investment (ROI) that truly improves your overall bottom-line?
Thanks to Google, many financial institutions will begin this process with a quick internet search. While that is certainly a logical starting point, it may not be the most ideal place to begin. It can be difficult to determine if a particular vendor meets your needs until you yourself determine what those exact needs or objectives are. Is your staff tech-savy; are your account holders? Do you rely on third-party service providers, or are most processes handled in-house? Will this new software affect just one area of the financial institution or is an enterprise solution something to be considered amongst various departments?
Once you have nailed down your wish list, then you should start searching for providers, or talking to others in the industry about solutions that will best meet your discovered requirements. By doing this, you will quickly narrow down a list from about a dozen or more potential vendors to just four or five top candidates. You can then follow the steps below to create a consistent and fair environment for the evaluation.
Now that you have narrowed down your search, it is time to engage these vendors and begin to plan for demonstrations so you can see the solution in action. While vendors may want to demonstrate their platform on their terms, it is paramount to keep your needs at the forefront. Scheduling a short call prior to the demonstration will allow you to communicate your objectives for a new software solution. Interested and organized vendors can then take that information and mold their demonstration to your exact needs. On the flip side, failing to have a short call could leave you with a vendor that shows off features that have nothing to do with your evaluation or requirements.
After the discovery work has been done it is time to view the demonstration. So far you have done your best to make these demonstrations as effective and informative as possible. With your objectives laid out it is now time to rate each vendor based on how you feel they met these objectives. Setting up a scorecard is a great way to keep track of how you feel. Label out your top five most important objectives and whether the vendor was able to meet these goals or not. Creating a side-by-side comparison is an easy way to qualify, or disqualify, vendors and keep your evaluation moving in the right direction.
You have finally come to the point of the evaluation you have been waiting for; decision time. As a decision maker it is important to get feedback from all stakeholders. One department may feel different than another; and on the flip side one department may be more affected than another. This is where that scorecard will be very helpful as you can decide on a vendor in an easy, transparent way. After all feedback has been heard and a vendor has been chosen you will want to move towards viewing and evaluating that vendor’s contract. Sufficient time should be given to this process and planned for in the overall project timeline. Compliance issues are very important so both sides should be comfortable with terms and agreements before signatures can be made. Another important step that can’t be overlooked is planning for the project post signature. While the contracts are being reviewed this is a great time to ramp up a team for implementation. Decide who will run the project and what members of the team will be involved. A timeframe should be set and communicated to the vendor for buy in.
Now that terms and conditions are agreed to you are ready for signature. To not lose steam in the project it should be imperative to know the next steps post signature and outline an implementation plan developed by both you and the vendor. You are now on your way to a new, innovate solution that will bring improved efficiencies to your financial institution!
Every software provider has strengths and weaknesses and no two solutions will be the same. At the end of the day, you want to create as close to an apples-to-apples comparison as possible. By outlining a detailed evaluation plan upfront, you will assist each individual vendor in preparing for and providing the information that is of most important to you. The goal is for each vendor to prepare their very best presentation. By doing this, you will more clearly be able to determine not only the highlights of each solution, but the shortcomings will also be more obvious as well. This will allow you to quickly identify and address those gaps, or simply move on and ultimately bring you closer to the decision that makes the most sense for you.