Various methodologies have been proposed over time to help with system selection. Often these are merged with implementation approaches that provide a reportedly integrated approach. Personally, I like a simple approach to system selection.
The choice of technology can be complex in itself. Consider comparing Cloud based solutions with in house versus a hosted solution. Why not more options such as an in house hosted solution or a perhaps a solution on a “private” cloud. It’s not just a case of comparing apples with oranges but you are selecting across an entire fruit salad.
And all these considerations, are on top of the all important available function comparison.
Have you seen those stands in the fruit shop with the largest and best looking apples. They have consistent colour, good shape, are firm to touch and the shine is amazing. Often you will find these are the same apples that have travelled around the world, been irradiated to increase shelf life and are waxed to give that sheen. What looks good in the shop or in the brochure is not necessarily what is the best eating. You need to cut open an apple too find the worm.
Treasury system selection is the same. The claims from vendors are in line with what they believe they have developed but this is not necessarily in line with real world requirements. A Proof of Concept (PoC) will often help you to understand not only what function the system can deliver but, as importantly, how that function is delivered. The ability to capture swaps is great, the fact you have to enter details across multiple screens saving with each step is not so good. You need a script.
Ahh, a coupla days – beautiful
How many people remember Con the fruitier? He had a pitch, a script, that he followed each and every time and the phrase caught the imagination. Sure he was a fictional character but the phrase is still remembered today. System Vendors are constantly showing their system. They know their system very well in fact the very best system consultants are often encouraged to move into Sales presentations at the expense of consulting. Repeating the same demonstration time and again, one learns how to string a narrative to achieve a desired result. That same narrative may not answer the questions you have.
By taking control of the script, you can ask vendors to all present according to real life examples that have been impacting your business. This level playing field also minimises the impact a good presenter can have over a presenter less polished. Remember, we are not shopping for presenters we are looking for a set of Treasury Functions that meets our needs. Prepare a script and circulate it too all your shortlisted vendors asking them to stick to it. Give them 30 minutes to provide their standard overview but then focus the rest of the day on the script you need to see performed. If you want oranges and apples, spend zero time looking at lemons.
Going back for bananas.
A script will help to keep your chosen vendors on track and provide an efficient method for you review. It is up to you though to ensure that script accurately reflects your requirements. If you need apples and oranges then the script also should include examples of how you serve this fruit. Do you want lemons with this? If not then you can explicitly say so. What the future holds can often be determined by your plans. If you do not want bananas but may have need of them in the future, include that but keep it all in context. The best way to communicate the context is by way of weighting of requirements.
There is some discussion on whether to share your requirement weightings or not. I’m a strong believer in disclosing all. Why would you not communicate to your vendors that Hedge Accounting is paramount, that IFRS 9 in the next few months will be key, but that you have no remit to enter into options at this stage. This will save your time and the Vendors by ensuring your script only focuses on your requirements. If you are working on introducing options in the foreseeable future, mention this too by way of weightings.
Treasury system selection has in the past been achieved through a lengthy process including requirements analysis, request for information, request for proposal, demonstrations and contractual negotiations before even beginning to consider delivery of function. While it is a key to success to truly and honestly understand and document your requirements, often the documentation within an RFP and the subsequent interpretation by vendors results in a miscommunication and eventually an implemented solution that misses the mark. Create your own script and ask vendors to stick to it. You will spend your time seeing not only the function you need but importantly how that function is delivered.