Brad,
Having just gone through this process 2 and one-half years ago, may I offer a word of caution. First off, all the core providers have advantages and disadvantages. You will find things you like about your new vendor AND, after conversion, you will find things you don't like. on balance, you may not find yourself all that much happier after conversion. The conversion process if you switch is painful, exhausting, a distraction, a disruption to your client, and probably not worth the pain. Heck, my Ops manager retired so she wouldn't have to go through it. Plus, the extortion from your current vendor on files held hostage by them is likely to be woefully underestimated in the financial modeling. You might take all this to say...don't do it. Exactly...that's my recommendation unless your current arrangement is unsustainable in some way. But, the shopping process will get you some savings if the vendors believe you'll make the change...and even at that they'll play chicken with you until the very end. So if you think that you really might NOT switch...don't tell anyone in your organization (really...no one) or your current vendor will likely figure that out in the process. My last point is that many of the consultants in this process charge a percentage of the savings...the PRE-TAX savings...over the life of the contract. You can not possibly imagine how the core provider finds ways to goose the pricing up over life of the contract...so your savings upon which you paid a percentage (UP FRONT) evaporates over time (and the exit fees will be underestimated in the percentage calculation). I've learned this the hard way (40+ years in the business) so no bank I run will do a percentage contract for consulting. So I would suggest you seek a fixed contract...which many consultants will not...or don't want to do. If you wish you can build in a very modest incentive. Fixed contract providers are out there if you mandate the contract be in that form.
OK....that's everything I know about the process. Forgive me for having fairly strong opinions on the matter and this is just one persons perspective so take it for what it's worth. Good luck. Kit Stolen
------------------------------
Alvin Stolen
President & CEO
Providence Bank
------------------------------
-------------------------------------------
Original Message:
Sent: 02-06-2019 14:47
From: Brad Butler
Subject: Core banking system selection and contract negotiation
------------------------------
Brad Butler
SVP, CFO
Merchants and Manufacturers Bank
------------------------------
Having just gone through this process 2 and one-half years ago, may I offer a word of caution. First off, all the core providers have advantages and disadvantages. You will find things you like about your new vendor AND, after conversion, you will find things you don't like. on balance, you may not find yourself all that much happier after conversion. The conversion process if you switch is painful, exhausting, a distraction, a disruption to your client, and probably not worth the pain. Heck, my Ops manager retired so she wouldn't have to go through it. Plus, the extortion from your current vendor on files held hostage by them is likely to be woefully underestimated in the financial modeling. You might take all this to say...don't do it. Exactly...that's my recommendation unless your current arrangement is unsustainable in some way. But, the shopping process will get you some savings if the vendors believe you'll make the change...and even at that they'll play chicken with you until the very end. So if you think that you really might NOT switch...don't tell anyone in your organization (really...no one) or your current vendor will likely figure that out in the process. My last point is that many of the consultants in this process charge a percentage of the savings...the PRE-TAX savings...over the life of the contract. You can not possibly imagine how the core provider finds ways to goose the pricing up over life of the contract...so your savings upon which you paid a percentage (UP FRONT) evaporates over time (and the exit fees will be underestimated in the percentage calculation). I've learned this the hard way (40+ years in the business) so no bank I run will do a percentage contract for consulting. So I would suggest you seek a fixed contract...which many consultants will not...or don't want to do. If you wish you can build in a very modest incentive. Fixed contract providers are out there if you mandate the contract be in that form.
OK....that's everything I know about the process. Forgive me for having fairly strong opinions on the matter and this is just one persons perspective so take it for what it's worth. Good luck. Kit Stolen
------------------------------
Alvin Stolen
President & CEO
Providence Bank
------------------------------
-------------------------------------------
Original Message:
Sent: 02-06-2019 14:47
From: Brad Butler
Subject: Core banking system selection and contract negotiation
Does anyone have a good recommendation for someone they've worked with on core banking system selection and contract negotiation? We're ready to begin that process but would really value outside guidance and expertise in the process. Thanks!
------------------------------
Brad Butler
SVP, CFO
Merchants and Manufacturers Bank
------------------------------
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