Thirty-five years is a long time, for anything! But that is how many years I was involved in direct sales of enterprise software solutions that run banks and credit unions. These highly complex and regulated systems performed thousands of functions for financial institutions and required organizations to dedicate time and large teams of people to evaluate vendors, features, functions, and technology. I saw a wide variety of evaluation methodologies that included banks & credit unions taking this on alone, and consultants running the projects milking every last billable hour.

Following a year or more of evaluations, and an equal amount of time migrating data to the new solutions, many of these organizations ended up in a place that was often no better than where they started. Additionally, with the consolidating landscape of core providers and the barriers of entry for newer players (regulation, time, functionality), the deck was stacked against most community banks.

Having had the opportunity to work with most of the well-known consulting firms in this space, I have seen every evaluation project and contract negotiating methodology under the sun; full disclosure, most are awful! As I sat on the other side of the table, I struggled to see the value that many of these firms brought to the dance.

Some examples include:

There is a new sheriff in town. 

These firms come into the organization and take complete control over the evaluation process. When they talk about the bank they say “we”. They do not allow any direct or un-supervised communication between the vendors and the bank. What’s worse, many will disqualify you if you even try to reach out to the bank!

The 1,000 page RFP. 

Some firms believe in the no stone unturned methodology and issue back breaking, mind-numbing RFP’s that literally cover every possible nook and cranny of functionality. These documents may provide great reference material down the road, but no banker can read, digest, or remember this information from one vendor – let alone 3-5. One firm required multiple iterations of the document printed and shipped, costing more than $10,000 to produce!

Do NOT make eye contact! 

Vendors spend thousands of dollars preparing and traveling to provide polished and professional presentations. There is a reasonable expectation, as well as a simple decorum element, which suggests that the bank provide some element of feedback to the presenters/vendors. Following one presentation in which I could not get the bank to respond to a single question that we asked, I was told by the COO that the consulting firm had “forbidden them from providing any feedback or emotional reaction” during the presentation because it would “affect the firms negotiating ability with the vendors”. Wow!

The factory model. 

Some firms in this space are quite proud of the fact that they run 40 to 50+ evaluation projects each year; they claim that this provides them the ability to negotiate better with the software providers. This, however, could not be more inaccurate. As a vendor, I will give more in a negotiation with a smaller firm who I see less frequently than one who is coming to the table time after time asking for concessions. In addition, the “consultants” who are assigned to your engagement are independent contractors running as many as five engagements at any given time. How does that work for you?

Oh, would you mind explaining what digital means? 

I recently worked with a small, regional consulting firm (supposedly dedicated to banks and credit unions) where I spent more time educating the firm on what common terminology and functionality were. We guided the consultant more than the consultant guided the bank.

So, to answer the question…”why I joined Vitex?“. We provide our clients one-part art, one-part science, and one-part common sense. It is critical for the future of today’s community bankers as every penny that goes to the bottom line is vital. You can find firms who will work for less, however, as the saying goes, “you get what you pay for“.

Let’s get in touch!

Nick Perfido |  Executive Vice President | February 18, 2021