Pub. 2 2013 Issue 9

December 2013 13 l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s communicate regularly with the bank and provide a credible plan for correction? How many issues does everybody agree have gone on too long? • Does the vendor have a long-term roadmap for the bank that outlines the reasons for and timing of a migration to another one of its products? Does that roadmap show that the vendor really thought about the bank individually? Or, are lots of ideas about better products suddenly presented 1-2 months prior to contract expiration? • Does the account manager worry about and fight for the bank internally, or is he/she just overwhelmed and powerless? • Does the vendor proactively discuss ways for the bank to save money on its invoice? Everybody can laugh at that question if they want to, but I always thought that a 15- year relationship with a slightly lower margin was better than a 2-year relationship with a higher one. • Has the vendor ever proactively talked about how the bank can make or save money by just using its system better? Often called a “usability audit”, but has the vendor walked through the bank and pointed out better ways to do things? Does the vendor point out where staff really needs to go to training? If yes, was it initiated by the vendor or did the vendor need to be dragged into doing it? • Is there regular sharing of best practices among clients? Most banks probably manage some or all of these things. Too often, though, this effort is too informal, managed too far down in the organization, and seldom reviewed and analyzed in total. There is a real need to make this type of vendor management as formal and as rigorous as the current quantitative parts. First, there has to be formal accountability for managing these issues, and it has to be as high, or higher, in the organization than the responsibility for vendor management resides now. Second, there has to be transparency – senior management should know when a vendor is not meeting qualitative standards and there needs to be action taken or escalation. Third, there needs to be some kind of scorecard or reporting mechanism that documents this. Vendor management is good. Done right, it makes regulators and auditors happy. Vendor performance management is crucial. Done right, it saves relationships. That is why is also good for vendors too. It’s time to make sure we are focusing on the qualitative more than the quantitative part of vendor management. Cornerstone Advisors, a management consulting firm, was founded by some of the industry’s most respected strategy and technology consultants. Cornerstone professionals have worked with hundreds of financial organiza- tions over the past decade. They will be presenting two sessions during KBA’s 2014 Bank Technology Conference and Showcase to be held February 10-11 at the Hyatt Regency Hotel in Wichita. Please see facing page for details on the conference or visit www.ksbankers.com for registration information.