Remember the old children's fable about the little Dutch boy? The little Dutch boy thought he had the perfect solution to stopping the dam from failing, when in fact he had barely analyzed the scope of the issue. Under pressure to find solutions quickly, we find ourselves in situations not unlike the little Dutch boy.
For example: Purchasing a new product and pricing engine (PPE) is one situation where buyers should do their homework and swiftly secure user buy-in. Otherwise, they will experience unnecessary implementation delays from hesitating users, or worse, discover inadequacies in the product.
When banks decide to purchase or replace a PPE, they are making a significant investment. A helpful step to a smoother implementation is to communicate the importance of this investment to users as soon as possible. One of the best ways to do this is to secure user buy-in at the earliest possible time, ideally prior to implementation. In other words, once finalizing your purchase agreement, communicate to your staff that you will soon be including them in training sessions.
Establishing a clear intent to train your staff will signal your commitment to the new PPE. Your staff will receive a positive message, knowing they are being scheduled for training. These training sessions should also be part of a continuous training program provided internally and by the PPE vendor as part of the contract.
Training should include system administrators to loan officers and any other possible users. Engaging user participation at the earliest possible time, especially in a formal training program, will increase acceptance and maximize effective system usage. Experienced lenders and external vendors recognize that retraining users and acquiring user acceptance is an important step in the conversion to a new system.
One approach is to regularly discuss a new feature offered by the incoming or recently installed PPE. Another idea is to use the early training efforts to create user documentation and identify answers to frequently asked questions. PPE vendors should be eager to assist your users with a formal training program because that tends to increase client satisfaction and reduces unnecessary support calls down the road.
In addition to training, implementation also needs some attention. The implementation process should be predictable with realistically projected installation time frames. Some PPE vendors can implement their systems in as little as a few days. Ask the PPE vendor what the projected installation time frame will be and if any problems are anticipated.
After all, your PPE vendor should have gathered enough information during the sales process to make project estimations regarding time and resources to fully implement the PPE system. Be sure to understand what application components, data requirements and configuration customization your company may be expected to supply.
Here are some key points worth pondering:
- Will you be required to manage your own guidelines? Or, will that be done for you?
- Will you have to upload your investor rate sheets? Or, is this an automated process?
- Can you easily manage your product offering?
- Can your system run multiple pricing channels?
Be sure to address the issues before your final vendor selection. Some PPE vendors will handle most, if not all, of the heavy lifting while other PPE vendors may expect your company to further customize your data, add database functions or make additional configuration changes.
Your responsibility to supply particular functionality or reorganize your data may come as an unexpected and unwelcome surprise.
Implementation may include various training opportunities to help staff members understand key technical support areas during the installation.
Remember the training documentation efforts suggested earlier, and consider placing that user documentation on an easily accessible Web site when a working version of the system is up and running. If the system unexpectedly stops working, you may need to fall back on your previous installation training sessions and documentation to fix any problems.
It goes without saying that the system should be easily managed. Be sure to review the configuration management options included in a PPE product. If the configuration functionality is overlooked during the vendor selection process, you may find it hard to optimize the system to your satisfaction.
Q&A time
Asking the right questions during the training and implementation sessions will help you identify future difficulties. Of course, the configuration management problems only get more complicated when the system grows and is being fully utilized. Avoid complicated configuration management problems by understanding what options are available.
For example, future system growth and adjustments may include adding a new business channel such as reaching out directly to consumers from the Internet or extending your brokerage customer base. Can your PPE vendor support the additional configuration changes and increased system utilization at a reasonable cost?
Even better, does the system allow you the flexibility to make configuration changes without requiring the vendor to make those changes for you? Perhaps you simply want to hide external URL addresses when consumers are navigating your Web site.
Ask your PPE vendor if they are prepared to implement this commonly requested feature or if you can do this yourself. And yes, someone will have to obtain and install the additional Secure Socket Layer (SSL) digital certificates needed if you are going to display your Web address on your vendor's PPE server.
Business growth will require that the PPE system be able to grow with increasing business activity. How do you measure the PPE vendor's ability to cope with your anticipated growth plans? One way is to request system downtime statistics from your prospective vendor. Capacity problems will be reflected by long downtimes when servers lock up or crash because of their inability to handle peak transaction periods.
Vendors should be beefing up their system capacities to minimize or eliminate downtime for their customers. Allowable system downtime should be specified in the service-level agreements between the customer and the vendor.
While PPE vendors operate in secure, co-location environments, these hosted data centers and managed security providers may not be supplying adequate backup systems. As you know, data centers in the financial services industry are required to have a SAS 70 review conducted to comply with the Gramm-Leach-Bliley Act, among other requirements. This auditing requirement does not guarantee an adequate backup system and/or recovery process is in place if your pricing engine were to go down.
Ask your PPE vendor if they are prepared to quickly recover from a system crash and provide continuous service to their clients with minimal interruption. Is the projected recovery time measured in seconds, minutes or hours? Don't forget to modify your service-level agreements to insure high availability and reliability from your PPE vendor.
Also, ask your PPE vendor about the number of investor relations supported directly from their system. Direct relationship support between the PPE and investors are preferred versus indirect relationship support. Direct relationships improve the accuracy and timeliness of product updates located within the PPE. These direct relationships also save time because the PPE updates itself when necessary without requiring internal technical support staff to apply any configuration updates.
Indirect relationships may involve the exchange of paperwork, delaying changes to the PPE and increasing the chance of data entry errors.
The PPE is a constantly evolving system component in the loan origination process. The PPE is a system that should be carefully selected by conducting a thorough evaluation of its available configuration options. Users of the system need early exposure and training to speed up the transition and maximize effective usage of the system. Understand your PPE's ability to handle peak traffic loads as business activity increases in your loan origination system.
System recovery times vary among PPE vendors so be sure to set performance expectations within your service-level agreements. By following the advice given here, lenders can avoid costly mistakes and can properly plan for the transition to new PPE systems.
Michel R. Van Hee is CEO of Sollen Technologies, based in Dallas. He can be reached at (800) 582-1074.
