Tuesday February 7th 2006 


Featured Article

Selecting Financial Planning Software for Your Enterprise

By Tony Valaitis, AdvisorTek.com

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This is the first in a series of articles on selecting software at the enterprise level. If you are responsible or involved in the process of selecting software for your organization and financial advisors, then these articles will help you complete the task. The same six step financial planning process that financial advisors use with clients can be adapted to help your organization find the right software solution.

1. Define Needs
2. Gather Information
3. Analyze and Evaluate the Alternatives
4. Select a Solution
5. Implement the Solution
6. Monitor and Evaluate

This article will introduce the first three steps of the process. Future articles will cover these and the other steps in more depth.

1. Define Needs
The first step in financial planning is to define a client’s goals and objectives. This should also be the first step in your software search. Your organizational and financial advisor needs should define what software you get. Don’t try to fit your organization to the software but rather, find the software that best fits your organization.

  • Why do we need new software?
  • What are the pros and cons of acquiring the new software?
  • Have you a prepared a business case for the proposed new software?
  • How sophisticated are our clients and their planning needs?
  • How sophisticated are our advisors and their planning abilities?
  • Will the software require a significant investment in training?
  • Do we need a web based or PC based solution?
  • Does the software need to be compatible or integrated with existing hardware, operating system and network software, CRM, portfolio management or account aggregation software?
  • Does the software need to be scalable and flexible?
  • Do we want an off-the-shelf software package or a customized solution?

2. Gather Information
3. Analyze and Evaluate the Alternatives

The next two steps – gather information and evaluate alternatives – will be combined since they overlap with each other.

The first step is to create a long list of vendors and invite them to participate in the software selection process. Criteria for selecting a vendor could include stability of the vendor, proven track record within the financial services industry and how closely the vendor’s off-the-shelf software package meets your needs. The long list of vendors should receive a request for information (RFI) asking them to provide some basic information. An RFI should cover the following:Request for Information (RFI)

  • Identify yourself, your position and your company.
  • Describe the software solution you are looking for.
  • Describe the selection process: (1) Long list of vendors receive a Request for Information (RFI), (2) Short list of vendors receive a Request for Proposal, (3) Vendor finalists perform an on-site demo, (4) Selection of winning vendor.
  • Provide a timeline for the selection process.
  • Explain the Request for Information Package and the Questionnaire
  • What is the deadline for submitting the RFI and where it should be delivered?
  • Who is the vendor contact for more information, if required?
  • Thank the vendor for their participation.

The responses to the RFI will detemine who makes the short list of four vendors. The short list will receive a Request for Proposal (RFP), a compehensive questionnaire that covers all aspects of the proposed software solution. These include:Request for Proposal (RFP)

  • Vendor profile
  • Vendor experience (has the vendor implemented similar solutions with other customers?)
  • Product information (number of existings users, market share)
  • Product features (what can the product do?)
  • Product requirements (what do we need the product to do?)
  • Maintenance, training and support capabilities
  • Pricing and licensing
  • Platform requirements (operating sytem, network, architecture, security)
  • Printed and on-screen output requirements
  • Integration requirements

Demo Finalists
The responses to the RFP will detemine which two vendors are selected as the finalists. These vendors are invited to perform an on-site installation and demonstration of their software product. You can incorporate a user evaluation into the demo by having selected financial advisors and staff try the software without any vendor representatives present.

Select Winning Vendor
Based on the RFI, RFP and on-site demo, select the winning vendor and begin the implementation process.

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