Make Technology Budgeting Less Stressful

No matter how many times you’ve gone through it, budget season generates questions and anxiety around how to best spend a finite amount of money. We commonly hear questions like “how much should my firm spend on technology?” Or, “what are the latest technology innovations I should add next year?” In reality, there’s no one single answer to any of these questions. Wealth management firms have to take their unique set of variables and attach them to their desired outcomes to develop an overall budget and prioritization.

There are some ways you can approach budgeting, however, to build the business case for the spend, get the maximum ROI, and ease the stress of budgeting.

Start with Use Cases

It’s important to have conversations with all stakeholders in the firm that establish the top use cases you need your technology solutions to address. We advise our clients to think about the five scenarios they’d like to solve in the upcoming year. This could include goals like reducing account opening time, streamlining your record keeping, or keeping your data secure and stable. Do you want to improve client or advisor experiences? Make processes more efficient and cut operational costs?

Knowing where you want to go and what problems need to be solved will make planning the technology solutions and budget required easier.

Technology projects follow an order. Knowing where your firm is in this order will help prioritize the projects for the year. For example, you might see an AI tech solution that is optimizing the client experience, but, if you haven’t established a strong foundation with your data, it doesn’t make sense to invest in this kind of emerging technology because you won’t achieve the desired outcomes.

Start with data and underlying infrastructure. Once you’ve built a solid foundation, you can tackle projects that create more efficiency in your platform and enhance the advisor experience such as reducing the time it takes to open accounts or process transactions.

After you’ve optimized your operational efficiency, you can budget for technology solutions that optimize the client experience through emerging technology.

Pro-Tip: Always think about integration. Don’t focus on one piece of technology in a vacuum. Consider how each solution fits into your overall ecosystem.

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Take More than Dollars into Account as You Budget

Technology projects fail if the right people aren’t aligned with them. Your budget needs to account for the resources you’ll need for the project.

• Think through the innovation and identify a champion for the solution so that you can ensure appropriate adoption and use of the technology after implementation.
• Think about the expertise you’ll need to implement the technology solution for each use case you’re solving. Do you have the subject matter experts in house already? Will you need to hire internal staff? Will you outsource that expertise? Are all your projects relying on the same  resources and you’ll need to manage their bandwidth or add support?
• Think about the timeline of each project. How will you plan out the time of each implementation? Will projects overlap? Will your resources for each project overlap? Will you need to restructure the timelines or outsource more resources to make them work within the desired timeframes?

The What, Why, and How

Budgets are ultimately a scope of the what, why and how of your firm’s future technology. Once you think through the use cases and align the technology and resources to them, building a business case for a particular technology need and justifying its purpose becomes much easier and less stressful.

Contact us to support your technology budgeting process.