Like most manly, bearded men, I never stop to ask for directions or a roadmap to navigate life’s twisted pageant. Nah, just gimme a spit-covered index finger to test the wind, a well placed sign or two and the sun and the moon and the stars, and I’ll get us anywhere worth going.Yet, when it comes to keeping up with what’s going on with the bank tech vendor community, I need focus and direction – explicitness to help me track the vague moving target of chaos.
As you know, the Brown Ties at the FFIEC are pushing you hard on vendor management.
Just like every other prescription the FFIEC has written for whatever risk topic ails you, they want you to Understand, Monitor, Measure and Control your vendor risk. They want you to go deep with your key vendors’ roadmaps. With tough-as-nails earnings foes and the spectre of an angry CRE market threatening to kick our economic asses, bankers don’t need yet another distracting brawl with the Feds.
So, you have to toe the line a bit. But for anyone with such worries, this IS NOT a risk management article!!
While you have to keep the Feds happy, that’s not why you should be all over your vendor’s roadmap. There are several other, much more important reasons:
Here’s enough to get you started.
Develop a feel for the direction at your vendor’s corporate office. It’s time to push your vendor HARD for candid input on the major decisions being made in the ivory tower. That’s just step one. Step two is to develop your own spin on their plans and really think through how your bank could be affected by the decisions being made by a small and shrinking number of vendor execs.
Is your core product a likely survivor?
When you look at the array of core products your vendor offers, can you clearly see where your core product fits in or where it differs from other products in the vendor’s quiver? Core products with a shaky future obviously don’t garner the R&D dollars needed to keep your FI flush with fine functionality. No, they flounder in the dreaded (Nearly) Maintenance-Only Zone.
Here are a few practical examples from discussions I have had with clients.
The vendors may well have good answers to these questions. But more importantly, CIOs, you need to have your own clear, concise, thoughtful slant for your board, CEO and peers.
What is the corporate-wide ancillary product strategy?
Vendor consolidation of ancillary products is inevitable and smart. Why would a vendor fund six different Internet banking systems when it could perfect one badass IB system that fits well with all of its core products? It shouldn’t, of course.
But be prepared for the possibility that an ancillary system your bank adores – maybe one you have spent countless dollars and thousands of hours customizing and integrating – will go by the wayside. That announcement is not one you want to sneak up on you, CIOs; you want to be way out in front of it and ready to discuss it with your peers in the LOBs.
Some more real life conversations I’ve had that exemplify the vendor digging process you should go through:
Now that you have some Big Picture issues figured out, it’s time to take a closer look at your core product.
What is the realistic outlook on my core vendor’s development efforts?
Sometimes, for a variety of reasons, we want so badly to believe the vendor’s development timeline that we eventually do, even when just a touch of cynicism, realism or well-targeted critical thought would have kept our zeal in check.
The vendor’s product roadmap PowerPoint slides with timelines and cool architecture charts will get you about 10% of the information you need. The rest has to be mined, finagled, and strong-armed from the vendor.
Some more real life conversations I’ve had with my clients, who wanted to know:
Far too many CIOs pawn off deep vendor roadmap analysis and involvement onto their staff. For some vendor relationships, I simply don’t believe this is a luxury you have. As the CIO, you have to OWN at bare minimum your Big 3 vendor relationships in terms of dollars spent and strategic significance. Core, Internet banking and EFT are three usual suspects, often carrying hefty strategic significance and a monster portion of your systems spending.
So how does a busy CIO elevate to the lofty status of Lean Roadmap Ninja? Here are a few tips, the first two of which come from GonzoBanker’s own Quintin Sykes, former CIO of South Financial and fellow Top Notch Roadmap Spin Doctor:
So don’t bust out the Understand/Monitor/Measure/Control Dance because the Bank Pigs are making you. Get into some serious Participate/Criticize/Analyze/Spin to make yourself eternally credible and effective. In the words of the great Jim Rome: “Have a take. Don’t suck.”
Smart money’s on Spain by two goals this weekend.
If any of these questions sound familiar, it’s time to check in with the folks at Cornerstone Advisors. For more than a decade, Cornerstone experts have been assisting financial institutions with their technology assessments, vendor selections and core system conversions. We have helped our clients save big bucks in their contract negotiations.
Team up with the experts at Cornerstone for your next vendor decision.