Strategy Basecamp's IT Diagnostic - Six Steps to Improving Your Technology
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This document discusses leveraging technology for profitable growth. It provides examples of how top performing firms use technology differently and more effectively than other firms to increase productivity, revenue, and profits. A six-step process is outlined for firms to improve their technology value through benchmarking IT spending, assessing their current state, identifying strengths/weaknesses, optimizing tools and vendors, training staff, and creating an action plan. Case studies demonstrate how the process has helped firms with vendor selection, system integration, and strategic planning.
Strategy Basecamp's IT Diagnostic - Six Steps to Improving Your Technology
- 1. IT DIAGNOSTIC A SIX-STEP PROCESS FOR IMPROVING YOUR FIRM’S TECHNOLOGY VALUE CONTRIBUTION LEVERAGING TECHNOLOGY FOR PROFITABLE GROWTH
- 2. TOP TIER FIRMS LEVERAGE TECHNOLOGY FOR PROFITABLE GROWTH Source: InvestmentNews: 2013 Advisor Technology Study Benchmarking your technology spend vs. the industry and your competition provides useful insights • Innovative firms have a profit per staff of $51,923 vs. $35,509 at other firms. • Top tier firms don’t just spend a higher percentage of their budget on technology – they tend to focus on optimizing what they all ready have (e.g. leveraging clearing firm resources, BD tools, and/or custodial offerings effectively).
- 3. • Revenue, assets and profits of Top Performers – on both a per employee and per- professional basis – were three to five times greater than all other firms. • Top performers are using cloud computing and mobile devices to access core work technology THE PRODUCTIVITY CONNECTION Source: InvestmentNews: 2013 Advisor Technology Study Top performing firms make increasing their productivity the primary goal of technology investments
- 4. PRODUCTIVITY CREATES LEVERAGE IN ALL OTHER BENEFIT CATEGORIES Source: InvestmentNews, 2013; Strategy Basecamp, 2014 Results Created Increased Productivity Technology Investments Savvy Technology Investments More Time for Existing Clients & New Business Development More Sales More Profits More Time for Staff More Satisfied Clients Better Compliance Creating productivity leverages existing investments in staff in order to create or amplify other benefits (e.g. profits) Potential IT Benefits: • Productivity – Increased # of Hours Available for Client Service – Increased # of Hours for Business Development • Client Satisfaction • Improved Compliance and Risk Management • Improved Competitiveness • Return on Investment / Increased Profitability
- 5. OUTCOMES • Systems / Data / Vendor Diagram • IT Spending Analysis • Competitive Benchmarking • IT Strengths, Weaknesses, Opportunities, Threats • Quick Hits: 90 Day IT Action Plan IT DIAGNOSTIC: GET AN ACCURATE PICTURE OF YOUR IT COMPETITIVENESS The IT DIAGNOSTIC PROCESS An IT Diagnostic: Benchmarking Your Technology Spending, IT Competitiveness, Productivity, and ROI
- 6. • Mantras: Improved Productivity, Better Client Service, Measured Marketing, Increased Sales • Commitment: – To clean data from the start – Measurement and iterative improvement • Keep it Simple – Leverage group tasks lists that results in better service to clients – track what is and what isn’t done – Segment clients: Follow Pareto’s Law (the 80 / 20 rule) CRM: BEST PRACTICES • Integrate / Leverage: – Mobile / cloud: access to important client info 24x7 – Imaging / document management • Automate and measure marketing activity – What is / isn’t working? • Pipeline management: Expect increased sales – Set goals (i.e. “wins”). – Routinely review sales results as a group. Encourage competition. Source: Strategy Basecamp, 2014 A CRM Diagnostic helps to create increased sales, improved management reporting, and increase client satisfaction
- 7. FINANCIAL ADVISORS Vendor Market Share Redtail 40% Junxure 19% Salesforce 10% Microsoft Dynamics 5% Grendel Online 4% None 14% CRM: LEADING VENDORS • Salesforce and Redtail are gaining market share • Salesforce is rated most flexible. It is being heavily promoted by Schwab and TD Ameritrade. • Redtail is rated as having the most wealth management industry functionality Source: Aite Group, 2011, Strategy Basecamp, 2014 Source: InvestmentNews, 2013 INDEPENDENT BDs Vendor Market Share Redtail 29% Ebix / EZ-Data 14% Salesforce 11% Proprietary 9% Grendel Online 5% Source: InvestmentNews, 2013
- 8. • Be Compliant – Ensure WORM storage - Write Once, Read Many • Maintain an Audit Trail – leverage audit logging functionality in software such as Redtail Imaging • Design a system / process that works with “how your firm” works • Primary Goal: Find any document you need to serve a client in seconds DOCUMENT MANAGEMENT: BEST PRACTICES • Know what documents you’ll need to access “outside your office” – Leverage the cloud / mobile • Buy the right scanner – test the speed and quality (i.e. can your support staff keep up). • Define a process that addresses scanning of historical documents – consider “line in the sand” and “sun setting” guidelines (what will / won’t we scan) • Understand how 3rd party applications (e.g. eMoney, etc.) will be integrated. Source: Strategy Basecamp, 2014 Our industry is document intensive and spends countless hours looking for and exchanging documents
- 9. FINANCIAL ADVISORS Vendor Market Share LaserApp(*) 24% BD / Proprietary 17% Redtail Imaging 13% Laserfiche 6% Worldox 6% None 33% DOCUMENT MANAGEMENT: LEADING VENDORS • (*) Not all view LaserApp as a true document management solution. Source: InvestmentNews, 2013 INDEPENDENT BDs Vendor Market Share Redtail Imaging 24% Proprietary 17% Laserfiche 14% Docupace 7% Albridge 6% Source: InvestmentNews, 2012
- 10. COMPLIANCE: THE INTERSECTION OF RISK MANAGEMENT AND TECHNOLOGY Top performers invest in technology to automate the increased burden of more regulation • Sarbanes-Oxley • FINRA Rules 2090 (Know Your Customer and 2111 (Suitability) • Dodd-Frank • Identity Theft Red Flag Rules • E-Mail Monitoring • New Supervision Rules Effective 12/1/14 Profitability manage regulatory change through the effective use of technology
- 11. RISKS / COSTS ASSOCIATED WITH INADEQUATE TECHNOLOGY CAPABILTIES •Lack of exception reporting capabilities (not able to focus on highest areas of risk) •Inability to properly supervise transactions and accounts •Lack of systems integration •Increased maintenance costs •Excess staff costs to profitability ratio •Inability to keep existing advisors •Unable to attract new advisors •Sub-optimal management and tracking of the sales and marketing tasks and results •Lack of internet marketing strategies to drive growth •Poor / inaccurate management reporting •Time squandered “fighting fires” •Time associated with handling complaints from advisors BOTTOM LINE COMPLIANCE MANAGEMENT TOP LINE
- 12. 6 STEPS TO LEVERAGING TECHNOLOGY FOR PROFITABLE GROWTH • STEP 1: Benchmark your IT spending vs. the industry and your competition.BENCHMARK • STEP 2: Develop an accurate picture of your current state of systems, data, and integration.CURRENT STATE • STEP 3: Understand your Strengths, Weaknesses, Opportunities and Threats and how they shape your actionable plan.SWOT ANALYSIS • STEP 4: Replace poor performing software tools with better ones. Focus on productivity generation.TOOLS / VENDORS • STEP 5: Leverage your greatest resource. Create enhanced productivity via the execution of a training plan tailored to your specific organizational needs (e.g. new tools such as Salesforce). HUMAN RESOURCES • STEP 6: Write out a 90-day plan of action to address key findings of your work that can be quickly implemented. Address longer- term deliverables in your Strategic Technology Plan. 90-DAY ACTION PLAN
- 13. SELECTED EXPERIENCE: CASE STUDIES CASE STUDIES IT Diagnostic and Strategic Technology Plan (Vendor Selection, System Integration, IT Roadmap, etc.). Provided a national independent BD/IA an assessment of their current technology offering. Provided a Gap Analysis comparing the firm to their competitors and also created a short term tactical action plan for the immediate six months. Managed the vendor selection and due diligence process. Focus involved integration of numerous systems across the new account establishment, forms population, document management, compliance / supervision, compensation, and performance reporting functions. IT Diagnostic and Managed the Development of an Independent BD/IA (Vendor Selection, System Integration). Assisted in building the operations, technology, and compliance functions of a newly formed BD/IA. Worked closely with a diversity of vendors (new account establishment, financial planning, CRM, document management, etc.) and partners such as custodians, clearing organizations, and turn key asset management platforms. Assisted a Newly Restructured BD/IA in Selecting Vendors for an Interactive, Online “Dashboard” of Tools and Resources for Advisors. Process involved reviewing various vendors’ products, services and clients. Arranged conference calls and demos for the firm’s stakeholders and provided recommendations customized to the firm’s budget and needs. Managed the Vendor Selection and Implementation of a Compensation System at a National Independent BD. Worked with a large independent BD to perform due diligence on compensation system vendors and recommend a solution that best integrated with existing systems (such as new account establishment, performance reporting, existing proprietary data systems). Subsequently managed the customization and implementation of the new compensation system. Delivered the chosen solution on-time and below budget. SELECTED ORGANIZATIONS SERVED • National BD / IA with 400+ Reps / Advisors • National BD / IA with 1,200+ Reps / Advisors • National BD / IA with 7,500+ Reps / Advisors • BD / IA offering Investment Banking Services • Start Up National BD / IA • Wirehouse / Insurance / Advisory Firm • Multinational Bank with an Independent BD • Multinational Insurance Firm with Multiple National Independent BDs / IAs • National BD / IA with 1,000+ Reps / Advisors
- 14. BUSINESS PLANNING | PROJECT MANAGEMENT | TECHNOLOGY CONSULTING www.strategybasecamp.com (800) 276-8423