Is it time to review your core system?
Align core system with strategic goals to optimize technology
Optimization of the core processing environment is an essential component of maintaining your overall technology infrastructure to support current and future business needs. Across the financial institutions industry, a very competitive market in core processing software, services and emerging deployment options is helping financial institutions to control cost and align with the strategic direction of their organizations. Through an effective system selection process, you can identify business needs, assure integration with your technology infrastructure, and optimize the core evaluation and negotiation process.
Key components to consider as you review your core and consider conversion include:
- Alignment of the core and ancillary applications with the needs of your business
- Operating model
- Contract terms
- Resources to manage the vendor and implementation process
- Optimization of technology selected
A comprehensive selection approach includes the following phases:
- Needs assessment – Assess the available technology, including core systems, ancillary applications and outsourced services, and the future business needs of the organization. Identify key criteria, features, functions and integration requirements, and use these as the basis to develop a road map for where you want to go. Involve key leaders from all business lines and operational departments to ensure that key priorities from all stakeholders are addressed during the process.
- Request for proposal (RFP) – Develop a customized RFP that solicits specific, comprehensive proposals from selected vendors. The RFP requires vendors to propose total solutions and to address critical evaluation criteria, including features, limitations, growth needs, integration options, implementation, training, support, infrastructure and costs.
- Due diligence and vendor review – Schedule presentations with vendors. It’s a good idea to use customized demonstration evaluation tools to assist the selection team in recording observations and scoring demonstrated system features against requirements.
- Contract review and negotiation – The negotiation process is critical in order to protect your financial institution’s investment in the selected solution. Understand and negotiate pricing, term, service level, termination and price change triggers to avoid agreements that are one-sided in favor of the service provider. Both legal counsel and individuals familiar with the processing and business functions affected by the core system should participate in this process.
- Implementation project management – Complete the conversion to the new core system. Major system implementations are more successful when there is ownership and strong project management at the financial institution. A project manager who can coordinate efforts across your organization is a critical factor to a successful conversion. Note that most vendors offer project management but their focus is primarily on their data conversion requirements.
Financial institutions often choose to work with an independent consultant with broad experience in the financial institution industry to guide the organization through the evaluation and optimization process. A qualified consultant understands that there is no single best choice in the market and brings knowledge across the landscape of solutions and applications available in the market. An independent consultant provides unbiased guidance to determine the best match for your financial institution.