Changing your performance reporting vendor can be an exciting yet challenging process. In this four-part series, we have guided you through strategic framework considerations and converting historical data. However, it's also important to recognize that during the migration, there are costs and opportunities that remain hidden, often overlooked during the initial cost-benefit analysis, or not anticipated ahead of time. These hidden elements, both positive and negative, arise due to the failure to proactively identify and address them during the vendor evaluation process. In part three, we will shed light on the importance of preparing for these hidden costs and opportunities that can significantly impact the success of your performance system migration.
Implementing a new performance reporting system will inevitably require changes to your existing workflows, and it's crucial to anticipate how those changes will impact your operations team. For instance, a more powerful and flexible tool will likely demand additional technical resources to operate – a reliable performer on the old system might need to be reallocated because they do not have the appropriate skill set match for new workflows. On the other hand, a new tool that excels in high-value capabilities might lack some of the legacy system’s necessary but lower-value functions. Adjustments must be made to compensate for these deficiencies.
Another hidden cost of performance system migration is adoption risk. While forced change is never easy, we have all experienced it and felt the initial discomfort of needing to retrain on a familiar process with an unfamiliar tool. Detractors within your organization can derail even the most well-planned system rollout by diminishing the excitement generated for what should be a positive change. Be cautious of these detractors and address their concerns proactively.
Just as reallocation of resources within your firm can incur hidden costs, it can also create hidden opportunities. With the potential for increased automation from the new technology, you’ll have less need to perform mundane operational responsibilities and can redirect your staff toward more value-added tasks. Consider the efficiencies gained from enhanced tool capabilities – time saved by advisors generating analytics reports or preparing client performance reviews can be utilized for prospecting new clients or strengthening existing relationships.
An additional hidden opportunity with enhanced performance reporting technology is the ability to not only retain talented advisors, but also attract more to join your team. Technology platform tool integration has become a crucial factor in firm valuation and a driving force in wealth management M&A activity. The platform is a unique and compelling asset that adds value through sales acceleration, increased attractiveness to new advisors and decreased long-term costs as innovation and technology expectations rise.
While you may encounter other unexpected costs and opportunities during the migration process, acknowledging their potential existence will help mitigate risk and increase the likelihood of a successful transition. In the final article in this series, we will conclude by discussing how to define the minimal viable product (MVP) versus the art of the possible.
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