Vendor Evaluation & Selection

 Vendor Selection can often be a challenging process with very tight deadlines. It can also be the most consequential decision in achieving the desired outcome. Once the purpose of the new system is clearly defined the organisation needs a clear answer on the following before the contract is signed:

· Can the system meet the purpose?

· Is the system a replacement or complementary to existing systems?

· What resources will be required for implementation and how long will it take?

· What resourcing and skills are required to maintain the system post-implementation?

· Is the system scalable?

Can the system meet the purpose?

Before this can be answered, it is important to have a clear purpose. This is especially important if the system will replace another system as they could be complementary systems that could result in an alternative purpose or capability being lost. 

Once the purpose is established, a requirements gathering phase must be completed with all appropriate stakeholders involved. The key requirements should align very closely with the purpose. These will form the RFP/RFI and PoC stages of the evaluation process. It is critical that someone with the appropriate experience is involved in this stage to probe deeper when answers appear wrong or require a customisation. Vendors will present their solutions in the best light.

Is the system a replacement or complementary to existing system?

Clearly answering this question upfront can save a lot of pain later. A lot of systems evaluations focus on what is missing from the investment team’s current capability and can ignore another important purpose the current system is fulfilling. The distinction between Portfolio Analytics and Performance Attribution is often where this can cause problems. 

A trade off can often be required. Even if two systems become part of the architecture the impact on resourcing, skill, and cost need to be well understood. If the system will replace an existing system the relative importance of both purposes needs to be clear and factored into the selection process.

Resourcing and Time

This can vary significantly between systems and has strong dependencies on the quality and experience of the implementation team (both internal and at the vendor). It is common for implementations to take 1 year at one fund and over 3 years at a similar fund due to quality and experience of the internal team. The quicker team often has less resourcing. 

The key things to consider:

· What support is provided by the vendor?

· What dependencies does the system have on data and other processes?

· What resourcing is required?

· Do we have the skill?

· Do we have the right communication skills?

· Do we have the right stakeholder management?

· Do we understand the risks?

Maintenance post-Implementation

This one is often not intuitive to Senior Leaders at a fund. Systems are expected to create efficiencies and bring more capability, although they often require more resourcing with a higher level of skill to maintain. This is especially true if the system now allows you to do things that couldn’t previously be achieved. The flood gates of new requests will open once a new system goes live. 

The resourcing can be thought of in 3 parts:

· Minimum resourcing to maintain what has been implemented.

· Resourcing to support further buildout and use of greater capability.

· Resourcing required to maintain further buildout. 

The other things that also need to be considered are upgrade frequency and complexity, training will be required if self service is offered to Investment teams, if the data is now more granular than it was previously expect an influx of more complicated questions. 

System Scalability

Often a chosen system will stay in place for at least 10 years and could be extremely difficult to ever replace if it becomes entwined with other systems and processes within the organisation. The longer a system is in place the harder it will be to remove. 

This makes it critical to choose a system that will meet your future needs not just current. 

Key things to consider: 

· Has the system and vendor demonstrated the ability to evolve?

· How does the vendor incorporate client needs into future roadmaps?

· What relationship do existing clients have with the vendor?

· Are other clients as complex in terms of amount of data, structures and decisions?

We are here to help

Summit Glow Consulting has deep practitioner experience on all of the above. We have done a complex implementation in 12 months that has taken other funds 3 years.  What sets us apart is our deep technical understanding combined with our ability to communicate effectively with all levels from detailed technical conversations with business analysts to high level presentations to Boards and Investment Committees. Contact us if you value quality and speed, we  will reach brighter summits, together.