There tends to be a couple of approaches that planners adopt when choosing the systems that power their businesses.
Some people look at what their ‘professional’ mates are using, and some cobble together their approach based on what’s flavour of the month at the time.
This leads to technology or back office systems being driven by what other people are using or what’s topical, rather than the best fit for your firm or your clients.
It’s a problem, because you end up with systems that are just not up to the job – and this can be a system that does too much for what you need as well as too little.
There can sometimes be a danger of going for the ‘bells and whistles’ option, but this can be extra functionality that you end up not using.
The choice of what to use can be overwhelming, so it’s not surprising that firms can be left feeling a bit daunted by the range of systems on offer.
I’ve often spoken to rooms full of advisers where I ask whether they rely on their IT systems more than anything else.
As you would expect; everyone puts their hand up, and yet when I ask how many of them seek professional guidance in selecting their IT, maybe 50 per cent put their hands up.
The factors to consider
When approaching the due diligence process for the systems in your business, it’s important to see this as a team choice.
There are probably many times when an adviser or planner goes to a conference and listens to a speaker, and comes back to the business praising the benefits of a new tool which they now want to use.
But a more helpful starting point is to think about your future business.
In previous articles we’ve discussed a number of business principles, from your business plan and purpose to your client journey and proposition. These all feed into the technology your business needs.
So what does your future business look like, and what is it trying to do?
Let’s take an obvious example.
You may have decided as part of your business plan to scrap the office and set up a remote working environment.
Perhaps the business owner is emigrating overseas, and the team is working towards disbanding the office with everyone working remotely.
That instantly tells you what sort of technology you need, and the infrastructure that’s needed to support that.
You can’t look at technology first or in isolation, because then the only driver is what these systems have on offer.
What instead needs to happen is for you to understand what your business looks like in two, five and even 10 years’ time.
Who is your business serving and how? Then you can turn your attention inwards and ask your team: “What is it that we need this system to do for us? What’s our wishlist?”
The whole team can brainstorm what they want that system to do, and discuss this as a group.
The epic fail is where advisers and planners think they know what the answers are, when they are likely to be the ones to use the system the least.
Then you’re in a position to go out to market.
The best examples I’ve seen is when that wishlist is turned into a brief or tender document, which is sent out to prospective providers.
This is the same approach whether it’s an IT company, a back office system, a scanning solution or whatever it happens to be.
The approach is: “This is what we need. Show us how your system allows us to do that.”
If there are additional services or features on top of what you need, you can then make a decision whether these are valuable or not.
More than just a system
Beyond the question of whether a system is futureproof or not is the issue of internal expertise.
Often when I go into firms, I see that a student/graduate in the business has been allocated responsibility for ‘IT’. Either that, or the office manager is responsible because no one else wants to do it.
But are they really the right people to take on these responsibilities?
There’s a lot of things to think about when choosing your technology, such as information security and data protection, or recording information for the regulator.
These systems are the platform from which you run your business and deliver your services.
This goes wider than just what back office you use – it might include cloud storage, your hardware and software and your phone system.
It’s questions such as whether you want to audio record client meetings, or maybe have a whiteboard that links to a touchpad in a meeting room.
Training and development, IT usage and capacity are all key agenda items worthy of attention at your regular board meetings. IT is a serious business function, and needs to be treated as such.
Integration has become the latest buzzword, though it’s been an evolving discussion for the last 15 years.
Firms clearly want systems to talk to each other, but the only reason we’re still battling with this is certain systems are limited in what they can really do on integration.
One of our clients had a specific requirement that their back office system integrated with their phone system.
But because the system didn’t exist to do that, they had to have that piece of integration designed for them.
This was important to them, and meant they were starting from the right place of what was on their wishlist rather than what a particular system could do.
Implementation and change
Any new system requires full project planning, and good internal communication.
Administrators managing a change project such as moving to a new back office system can end up tearing their hair out, particularly where a business owner has instigated the move without any consideration of the scale of the job.
You can’t embark on a project like that without paying attention to what else is going on in the business at the same time, like recruitment or a big marketing campaign.
There is never a good time to do this kind of thing, but there is a right level of planning and a right way of approaching it. Again, it must be a team effort.
When I talk about platforms, I don’t mean in the traditional sense – I mean the whole platform the business is hung on to function.
Technology comes up time and time again in adviser surveys as among firms’ biggest concerns.
But you can’t address any tech issues or put infrastructure in place until you’ve tackled every other aspect of the business, the team and the service proposition.
You need to bring in specific expertise that understands financial services. We’re way past bringing in a relative who used to work for an IT company once upon a time.
General IT firms aren’t going to cut it, given the specific complexities financial planners have to deal with.
Not everyone treats technology with the seriousness it deserves. But I believe this is one of the most important areas for firms to get right.