While bankers today may think of vendor user groups as second nature, there was a time when data processors ran chaotically without this important tool. Allow me to share a few war stories from the pre-user group days and then share some best practices for user groups today.
Some years ago, back in the late ’70s and early ’80s, I was the executive in charge of a data processing service bureau. We processed work for about 75 correspondent banks and a smattering of other clients.
We were very customer-focused, but as was common in those days we had our share of troubles. Disk packs (anyone out there remember what a disk pack is?) crashed and deadlines were missed. Check sorters choked on the paper and capture runs ran late. Programs blew up in the middle of the night and programmers were called in to make emergency repairs on the spot. (The term User Acceptance Testing had not yet been invented. In fact, the term “testing” was still a four-letter word to most programmers.)
Sometimes we slipped into a downward spiral, where after a long hard night of data processing we finished late, which caused our clients to run late the following day, which got us off to a late start the next night so that we ran late again the following morning—a vicious cycle of missed deadlines and late deliveries. Tuesday nights after a 3-day weekend were murder—it was sometimes Friday of that week before we caught up! But we always knocked ourselves out for our clients, and they knew that we were trying hard. More importantly, while we had our share of troubles our competitors seemed to have even worse problems. We were the best of bad lot, some would say.
Prioritization of Enhancements
We also had a huge problem setting priorities for software projects. We had a fair-sized development staff, 20 or so programmers and systems analysts, so that we were in position to crank out quite a bit of new code. (Remember, we weren’t hampered by the need to always test software before putting it in production!) And the requests were endless. Some clients wanted all our efforts focused on improved reliability, while others wanted new functionality. Our annual project “wish list” was always much longer than we could possibly hope to accomplish in any given year, and the “big bank” (the bank of which we were a part, and that constituted about 25% of our volume) always seemed to think their priorities came first—until we reminded them just how much cash we were generating for them, at which time they became more circumspect about the urgency of their development requests.
During this time, we also had a cracker-jack relationship manager working for us. This Whiz Kid—who is well-known to this day for his passion about putting customers first—came into my office one day with a bright idea: Let’s form a user group! If we got all of our customers in the same room once or twice a year—invited them down to the bank for cocktails and hors d’oeuvres and so forth—and asked them what was important to them, explained to them the issues we were struggling with (those disk packs again) and the long list of enhancement requests our development staff was trying to complete, they could give us some guidance as to priorities. What a concept—listen to your customers and let them help set the priorities! After all, it was their money that was paying for the development.
I took the idea to my boss. His response: Are you crazy? That would be like Custer’s Last Stand, only you’ll be getting them drunk before they massacre you!
We discussed it quite a bit more, and in the end he relented. He told me I was crazy but made sure that, if we were going to do it, we did it well—first class hors d’oeuvres, plenty of booze, and a small army of correspondent bankers to “help us” properly wine and dine our clients. He even agreed to say a few words at the beginning of the meeting, right after Whiz Kid (sometimes known to our clients as Chief Blowing Smoke because we couldn’t always deliver what we promised) welcomed the unruly crowd and identified me as their primary target.
The User Group is Born
It was a huge success. Our client banks had never been asked their opinion before! Even when we couldn’t accomplish what they wanted, they appreciated being asked. We loved the opportunity to help them understand what the competing priorities were. And, of course, we found that the consensus of the group yielded much better guidance than simply listening to those who complained the loudest. Thus was born, for our little data center, the concept of providing a formal vehicle for customers to influence software development priorities.
Within a few meetings, Whiz Kid had lost his reputation for blowing smoke and was able to generate more sales than ever. That was some 25 years ago. It’s pretty much unheard of today for a vendor to NOT have a user group—and that applies to everything from the major core system providers (outsourced and in-house) to minor ancillary system vendors. But there is a world of difference between vendors and the way their user groups work. For some—and we’re talking household names in the banking systems world—the attitude is still that encouraging customers to communicate among themselves is an invitation to Vendor Little Big Horn. To others, a user group meeting is an opportunity to schmooze with customers but it’s not truly a vehicle for obtaining guidance and harvesting good ideas.
How are your vendors doing in 2007?
Here are 10 things a first-tier user group should be doing:
When Cornerstone does system selection work, we regularly ask for the details about each prospective vendor’s user group. Invariably, those providers who have the happiest customers are those who work the hardest at promoting an effective user group, even at the risk of “organizing the insurgents.” Some user groups are nothing more than a scam—an excuse to wine and dine the attendees and then do whatever the vendor wants with respect to development priorities. We don’t name names at GonzoBanker, but we’re really interested in hearing from those who think their user group is either THE best or THE worst—there’s a Gonzo T-shirt and maybe even a year-end Gonzo Award for the most interesting user group story! Drop us a line if yours fits either extreme!
From system assessment to system selection to contract negotiation to conversion oversight, Cornerstone Advisors has a wealth of experience to assist in all phases of your involvement with existing and prospective data processing vendors.
Contact Cornerstone today and take the guesswork out of your vendor relationships.