Considerations When Procuring A Fintech Solution

By Tom Wheatley | 8 March 2016

Over the past few years I have learnt a lot about the sales process and the varied requirements of small hedge funds to multi-national commodities firms. This article aims to raise some questions that are not always asked by the prospective purchaser or are sometimes missed during the process, with particular reference to the buy-side reconciliation space which my company specialises in.

1. Engage in a proof of concept before buying

Proof of concepts or ‘try before you buy’ used to be rare in the reconciliation space because of the established players in the market but are now expected and often encouraged by vendors to see whether there is a good fit and are beneficial to both sides. Just like any project a proof of concept should provide outcomes to specified requirements. It allows a brief view of timescales and a more meaningful view of the product. It can also show whether your vendor really understands your business.

2. Take up references from similar firms and recent implementations

Any vendor will have their favourite reference sites which they will be happy to pass on but what about recent implementations or firms with similar needs? Even if the feedback is good then there are bound to be some areas to take away and improve on for your project should you choose that vendor. Private non-vendor groups such as the COO Network or areas on LinkedIn can often be a valuable impartial reference.

3. Pose specific business cases to the vendor

Take issues from your current process and pose them to the vendor, what does the software do if this occurs or can we set up a process to deal with that? Do they have experience of similar issues and can they offer sensible, manageable solutions? These cases often reveal how much collaborative work actually goes on with existing clients and whether there is any real and regular communication between vendor and users.

4. Meet the implementation team

The sales team is always in front of you but they aren’t the ones that deliver the final product. Can you meet the implementation team so you can gauge the experience they have and how relevant is it to your business? The costs of implementation can often be quite high therefore having confidence in the implementation team is paramount. You don’t want to be paying for a long implementation by a junior member of their team when a more experienced consultant could complete the job in less time with perhaps better results. Another consideration is whether the vendor implements their own systems or has a consultancy that they recommend.

5. Future proofed software

The software fits your needs now but does it allow for future growth? This can cover everything from data volume to a move from installed to hosted or addition of new instrument classes or reconciliation types. Crucially are you going to have a long lead time on any change requests and are they going to carry a large cost or time commitment? A product roadmap is also helpful to see if it aligns with the rest of the market and your expectations.

6. Best practice guidance

You (hopefully) aren’t just buying a tool but also vendor knowledge of the process. You know your data better than anyone but your vendor should have best practice knowledge they can share whether it is preparation for the implementation or business as usual best practice. Most companies publish white papers online but do these resonate with your experiences and does the viewpoint of the authors extend to the practical delivery of their systems?

7. Support management

Support for the software can be crucial to your business but it is amazing how few questions we get on this subject. Does the vendor provide local or remote support? How does knowledge transfer from the implementation team to the support team? Can you quantify the response times for differing levels of support? Change requests may also come under the banner of support therefore how are small changes managed and charged for? The lead time on changes may also be a consideration in your vendor analysis especially where the business does not always have full knowledge of upcoming requests from other areas of their firm.

8. Continued vendor interest

Vendors are keen to sign long term contracts but how does this fit with your expectations of support and relationship management? A five year contract might provide price stability and enable forward planning but are you going to get the same level of service throughout this period or only near renewal time?

In conclusion there are clearly many other aspects to the procurement process especially when some RFP’s run into hundreds of pages but these points perhaps challenge the traditional vendor sales process and arm you with some excellent questions for your next round of vendor demonstrations.

By Tom Wheatley, Director, Watson Wheatley. 

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