I’m often asked how we go about selecting the best available software system for a particular need. As the chief technology officer for a fast-growing RIA that manages over $11 billion, from my perspective, this is a key aspect of what my teams do.
What typically happens is that we find we’ve outgrown a particular software, or that we’re using two separate systems that increasingly overlap.
While this part may seem obvious, when it comes to technology, long before making any decisions, you must clearly identify the precise problem you are trying to solve. One way to hone your approach is to define how solving the problem will improve your business.
A non-tech example would be that you live in a house that’s too small for your needs. Let’s say you want two more covered parking spaces for your cars, and you want an additional bedroom for your growing family. Simultaneously, you also don’t want to lose any of the great functionality of your current home.
Perhaps after your due diligence, you realize that instead of buying a whole new house, what you really need is a renovation.
The point is, don’t jump in and commit too quickly. It’s amazing to me how often the problem we are trying to solve changes once we step back and ask ourselves what we are really hoping to achieve.
So, say we’ve identified an issue or issues. The next thing we do is to create a vendor assessment matrix, or VAM. On the VAM, we’ll list the various facets and functionalities of the product: the costs, security, reliability and even the customizable options. (These categories are ranked from zero to three.) We then also add a “weighting” score for each product asset, taking into account which bells and whistles are extremely important to us, and which aren’t.
The next step entails sitting through meeting after meeting with vendors who want you to buy their software. While a grind, these meetings represent your opportunity to ask important questions such as, “What doesn’t work in your software?” or “What do customers complain about the most?”
This is where the cat-and-mouse aspect of sales rears its head. It never fails that, just like visiting a car dealership, you have to wade through a lot of information and back-and-forth before you can get down to the brass tacks of the cost for the product’s performance level and the customer service support that you actually need.
After all the sales meetings, after we’ve narrowed down our search, we then approach customers of the software company and ask them every possible question they’ll answer.
After we choose and purchase a product, we come to the processes of implementation and even integration. This is where you hope for the best, but plan for the worst.
We begin by tracking how the systems talk to each other today — and how they will talk to one another in the future. This is followed by numerous internal meetings to discuss the short-term impact, like interruptions or glitches, that implementation could have on the workings of the business.
Next come more internal reviews, additional conversations and more meetings with the vendor, until we have a high degree of confidence that the conversion and integration will be smooth.
From marketing to customer care to security to portfolio rebalancing, technology is at the foundation of practically everything we do. The key is knowing how to choose software that solves your problems while simultaneously improving both the functionality and the profitability of your firm.
Adi Garg is the chief technology officer for Allworth Financial, a Sacramento-based RIA with $11 billion in AUM.
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