“Without access to true chaos, we’ll never have true peace.”
–Chuck Palahniuk, Choke – A Novel
What I want to know is who the hell let crazy Chuck Palahniuk, America’s favorite nihilistic bedlam junky, into my system selection clients’ boardrooms? He’s obviously been sticking his anarchy-loving nose where it doesn’t belong, and GonzoFreaks, it must stop.
There is a noticeable problem among banks at the point of a system selection process where they have to commit, pull the trigger, take the plunge, don’t look back, etc. We’re talking about the time after the RFPs have been digested and analyzed and following the onsite demonstrations when the bank narrows its list of prospective vendors down to, say, one new vendor plus the incumbent or maybe two new vendors. Banks (and credit unions) are truly struggling to make that final, potentially career-threatening/saving decision to pick The Winner. If four months have elapsed since you endured the vendor demos and you still have not chosen The One, you are probably dragging your feet.
Way back in an April ‘03 issue of GonzoBanker, I astutely identified this rather new blip on the system selection radar screen. My advice last year was to make as many phone calls to peer users of the systems you are evaluating as humanly possible and significantly devalue the importance of the obligatory site visit(s). Despite my lunar influence on the tides of our industry’s system selection processes, the problem of extremely protracted time periods to make a system decision has only worsened.
Why is taking so long to make a decision a problem? The most significant byproduct of over-deliberate decision making is lost momentum. If, after having been titillated with visions of sexy new systems, months and months pass without a decision, users naturally lose interest. They’re left believing that, despite management discussions and memos stating otherwise, the system selection process was apparently never all that important in the first place. Alternately, sometimes the final, long-in-coming decision is to remain on the incumbent system. In this case, users interpret the extended decision-making time as the mandatory but mostly smoke and mirrors “analysis period” during which management made the system selection look official but was really just waiting for enough time to elapse to show it really worked hard at arriving at a decision. The users could be wrong in either case, but now their confidence has taken a hit and the selection process has lost credibility.
Changing systems is a hellacious process even when end users are fired up and raring to go. When you mix in a pinch of user apathy, be afraid and cover your head from conversion fallout.
So what can GonzoBankers do to ensure they have put in the necessary time and analysis to make an informed decision without losing that all-important momentum along the way? Read on for GonzoBanker’s tips to Getting Over the Hump.
The High Supreme and Golden Rule of System Selections: There Is No Perfect System.
Thankfully for snot-nosed consultants like me, each system has its own list of good/bad, modern/decrepit, cool/klunky, proven/vapor. Everyone involved in a selection process needs to understand and, even more importantly, truly believe in the High Supreme Rule. Everyone concerned must recognize that there is no mythical moment of enlightenment and clarity that will, with neon lights flashing and some wicked speed metal in the background, lead them to The Chosen System. It’s about keeping perspective and having realistic expectations. There is no Santa Claus. There is no band of illegal organ harvesters that drugs you, takes your kidneys, and places you in a bathtub full of ice. And there is No Perfect System.
“Stereotypes are a real time saver.” —The Onion
Corollary 1(a) to The High Supreme and Golden Rule of System Selections: Business lines will not agree on a system.
Because of the way systems are designed, the disparate target markets and strengths of each system, and the fact that business lines tend to minimize the opinions of other business lines, seldom do different bank areas agree on the best system. The commercial lenders are going to flat-out love a system that the retail folks hate, and vice versa. It’s naïve to think all the business units will hold hands around the server, belch out a couple teary-eyed stanzas of Kumbaya, and then amiably begin a conversion. When the final decision is made, for every happy indirect lending group, there’s an irate mob of accountants. With every fist-pumping clan of mortgage originators will come a band of angrier than usual collectors. Keeping The High Supreme Rule and its redheaded stepchild of a Corollary in mind as the moment of Decision nears will save time in your process and keep the momentum going strong.
Don’t expect the fog to clear to reveal the perfect system, and never expect anything close to a unanimous vote.
Price and ROI Really, Really, Really Matter
Sooner or later, the selection process is going to come down to price. Many selection processes get bogged down by a vocal line of business that simply cannot live without Vendor X’s product, even though Vendor X’s product is 20% more expensive than the No. 2 choice. The logical but oft-skipped next step is for the CEO or CFO to bang his shoe on the desk and demand that noisy line of business put its money where its mouth is and come up with the 20 percent price differential through additional revenue, lower overhead, growth without additional headcount, etc.
My money’s on a red-faced “Thppfffft Oop Ack!!!!” reaction a la Bloom County’s Bill the Cat from that hard to please business line manager. A monstrous chasm exists between being unable to live without a system and putting one’s head on the block to cost justify that system. Knowing early on in the process that this type of ROI hurdle will surface stops many a high maintenance business line from unnecessarily muddying the selection process.
Now that that’s settled… I said it before, and I’ll say it again – get on the frickin’ phone with your peers and find out what they have to say about the systems you are evaluating. Bankers love to brag about how smart they are, how great their systems are, and what heady decisions they’ve made. Bankers also delight in bashing vendors when they feel they’ve been wronged. Either way, your peer bankers are an invaluable but shamefully untapped resource to get the skinny on prospective vendors and systems.
Work with Your Vendor to Plan Your Phone Campaign
In order to mastermind an effective phone assault, you have to collect truly relevant references. You can get references from your consultants, trade rag articles and general networking, but in the end you will need the help of your prospective vendors. They can uniquely put you in touch with the most suitable resources from their client base. But you have to get specific with them about what you’re seeking. Vendors can readily provide you with the names and phone numbers of generic clients who use their core system, but core is not likely to be the driving force of your selection process. No, what will probably win it for a vendor is their ancillary systems. You will want to talk with bankers who have deployed the branch automation, data warehouse, Internet banking, teller, general ledger, loan origination, etc. systems that either impressed or puzzled you during the product demo.
However, in today’s environment of consolidating vendors, the resulting mix-and-match ancillary system menus, rapid (relatively) product development, and DOS-to-Windows-to-browser migrations, chances are slim that you will find any single bank that runs all or even most of the ancillary systems shown in the demo. If you simply start calling the vendor’s generic references, you will undoubtedly find yourself saying, “I had a great conversation with that COO from XYZ bank, but he was only running two of the eight ancillary systems that we liked in the demo so much.” Or, “Man, that head of Retail from ABC Bank & Trust knew a lot about the vendor’s Windows teller product, but aren’t we evaluating their brand new browser product?” Multiply this kind of conversation by six or seven lines of business and several vendors, and we’re talking about days or weeks of wasted time.
Be Persistent and Dial for Dollars
Now is the time to doggedly demand quality references from your toothy sales reps. Put together a spreadsheet that lists all of the ancillary systems you want to review in more depth and force the reps to give you names and phone numbers of clients who use those systems. Assemble a different spreadsheet for each vendor.
The bank is now armed with an extremely targeted, to-the-minute list of references using the products you are so desperately seeking to research. I recommend having each line of business contact their counterpart at the banks listed by your vendor on their spreadsheet and be prepared to report their findings at a predetermined date.
But not so fast! Guess what? Some bankers just will not return phone calls. Sometimes it’s out of self-importance or just making you call twice to make sure you’re serious, but usually bankers do not return phone calls because they are extremely busy. Be persistent in calling them more than once or twice. If that fails:
Sales reps can pull strings and call in favors to make sure you get in touch with your target, or they can get you a new reference. If your sales rep is no help, move quickly up the vendor’s food chain until you find someone who will work proactively on your behalf. (It will not take long before you find a manager who puts the words “sales prospect” and “angry” together and pounds her fist until you get the help you need.) Don’t get me wrong, the vast majority of sales reps will work hard to get you the contract information you need, but some of them need a little reinforcement if their first few attempts at hooking you up do not work.
Don’t Wear Out Your Welcome
Once you do reach the right person at the right bank running the right systems, keep your questions targeted. You need to uncover answers to your questions, but do not push the limits of hospitality. You don’t want to be the idiot who shows up uninvited and drinks the host’s last Zima. Remember that execs from other lines of business at your bank may well be calling this reference bank, and the last thing you want is to have water cooler banter at the reference bank sound like this: “Save yourself if you get a call from LMNO Savings – their skeptical controller kept me on the phone for 90 freaking minutes talking about the system’s ability to backdate GL transactions like they do it on their current system!!! Those guys put the ‘anal’ in ‘analysis.’”
[Also, keep in mind that the references you interview WILL talk with the vendor sales rep. If, based on feedback from clients you have interviewed, the sales rep smells that your bank is simply tire kicking, you can pretty much count on no further help from that rep in your due diligence process. If, on the other hand, the rep thinks that your bank is too eager, they will skewer you in contract negotiations.]
Even though it may not feel like it, at this point in the game your bank has what it needs to make an informed decision. You have set a deadline for when the calls must be complete, accepted no BS stories from managers about why they could not get their calls done on time, beaten on the vendors for strong references, and documented your interview results.
It’s now time for what we call the “Come to Jesus Meeting.” This is where your selection committee locks itself in a room, discusses the due diligence calls, re-rates the vendors’ functionality scores, and generally dukes it out until it picks a winner. It sometimes literally takes a nasty, sweaty-palmed, four-hour bloodletting to get this done.
Of course, now you will likely want to go on a site visit to see the system of choice live and in action. You’ll probably also want to visit the vendor’s home office to get a feeling of comfort. But those activities will not change your mind. Consider site visits and corporate office visits as dotting i’s and crossing t’s. Gotta do it, but keep their usefulness in perspective.
In the words of the incomparable comic, Larry the Cable Guy, “Git ‘er done!”