From: Scott Hodgins
Re.: Vendor Demonstrations
Date: October 5, 2001
As temperatures in Phoenix plummet to a frostbitten 97 degrees, it can mean only one thing – fall is here! The palm fronds are changing color and the Gila monsters have a little extra spring in their step.
With this season always comes a rash of vendor demonstrations for our clients who are undergoing core processing selection processes. October is the perfect time to squeeze in vendor demos as it leaves just enough time to conduct due diligence, visit a peer bank or two and get a contract negotiated and finalized by year-end. Having sat mesmerized through countless vendor presentations in the past four years, I offer our fair readers…
“GONZOBANKER’S DO’S AND DON’TS OF VENDOR DEMONSTRATIONS”
For the Bankers:
DO involve senior management (including the CEO) as heavily as possible. At the absolute least, all bigwigs should attend each vendor’s introductory session. Banks with the greatest enthusiasm and sense of commitment to conducting a winning systems selection process have at least some members of the senior staff actively engaged throughout the demo day. It’s a significant time commitment, but the commitment to switch core processors is colossal. Having the CEO attend the demos underlines just how crucial this decision is and reinforces the fact that selecting a new core processor is much, much more than just a stand-alone IT project.
That said, DON’T involve senior management in rating or voting on the products’ functionality. Senior management plays a strong role in evaluating the various systems’ risk, vendor strength and price and will establish the hurdles that vendors must clear before they get the opportunity to present their product to your bank. But let’s face it – senior managers are almost never heavy systems users. Limit the actual rating of functionality to the people who will be using the systems on a daily basis. It keeps the users – who are the people you will have to depend upon for a smooth conversion – engaged and excited about the project and will give your bank the most thoughtful evaluation of the products you see.
DO arrive at the demonstration armed with a few pointed, frank questions about the product’s functionality, and be tenacious about getting direct answers. Make the vendor show you how it’s done rather than describing it, and even be obnoxious in following up if you feel that the vendor is tap-dancing around your questions. This is too important a decision for you to worry about appearing hardnosed. Typical scenario: You ask how a loan application taken over the Internet is loaded onto your origination platform. The vendor says it depends on your procedures, policies, etc. That’s probably a true statement, but don’t settle until the vendor tells you or shows you how most of their clients do it now.
But, DON’T bog down the demo by asking infinitely detailed questions that no one but the vendor’s programming staff could answer. You want to understand the breadth and depth of the product’s functionality, but the demo is not the place for the vendor to prove that its product can replicate the most complex international C&I loan ever underwritten. To keep the demo moving at a reasonable pace, handle the minutiae offline or via written correspondence.
DO consider conducting the vendor presentations offsite. This keeps the attendees focused – not reading e-mails and answering phone calls between sessions, turning 10-minute breaks into 45-minute absences.
For the Vendors:
DO give examples of peer banks successfully using your system. Nothing is more powerful in a demonstration than disclosing the name and contact phone number of a bank now expertly using your system to do what the prospect bank is trying to do. Telling the bank about your top rate floorplanning solution is one thing. Telling it to call Adam at FNB San Antonio who has used your floorplanning system to reduce costs and increase productivity is a much more cogent approach.
DON’T waste the bankers’ time by spending hours showing PowerPoint presentations that summarize functionality and display screen shots of the product. Get into the product and SHOW the bank what it will do. Open a new account. Process a few teller transactions. Follow a loan through the collections and shadow accounting process. Show how a prospective client’s information that was boarded on the branch platform system shows up in CIS and can be accessed through the call center. I have seen day-long demos in which the vendor never shows the actual product. It’s no surprise I’ve never seen such a vendor win the deal.
DO know the bank thoroughly, and start the day by talking in detail about what you know. All sales reps can spout off the bank’s asset size and ROA. But the truly effective presenters can quote the bank’s commercial loan portfolio growth over the past three years, EPS growth since the last acquisition, trends in non-interest income and the sources thereof, name of the Deposit Operations manager, etc. Successful presenters can speak easily about the bank’s history, market, competition and strategic direction. These are details that the bankers notice. Of course, knowing the bank won’t make up for a dog of a system, but it definitely gets the day off to a great start.
DON’T talk for more than 30 minutes about your company’s financial strength, the goals of the day and the map of the USA with dots and stars showing all of your installations. Believe me, the bankers know your company and are familiar with your financial statements. I’ve seen a company introduction last two hours, and we were passing out No-Doz by the bucketful. Just get on with what you’re really there to do – show the bank how your product works. It will give you more time to shine.
Just a few observations from the field, loyal readers. Next time, I’ll provide you with the second installation of our ever-popular GonzoBanker Tale of the Tape. The contestants this time will be Vendor Demonstrations vs. Root Canals. -smh