Advisory Technology: Flintstones or Jetsons

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Your hand shakes.  The keystrokes are slow and come reluctantly… Your mind races and horrible images flash before your eyes:  “Is this software contract going to be another nightmare?”  “Did my team do everything they could to pick the right tool?”  “Will I ever see a return on this investment?”  “Will this decision haunt me like so many other ones?”  “…. How can I possibly KNOW?!” 

Times are tough for advisory firms. Clients are pushing for less friction and better experiences (at lower fees!). Popular and innovative firms are making complex and dynamic experiences effortless and mobile… “You want that organic cotton tee shirt delivered in 2 hours to your doorstep via drone?  No problem!” 

Everyone in our industry knows they need to spend more money on better tools, but the success rate for happy/successful tech projects is pathetic. Imperfect and fluctuating requirements together with years-long implementation timelines collude to years-long payoffs. Rapidly changing vendor landscapes, regulatory surprises and client experience demands mean that by the time your three-year project is complete, the problem you set out to solve may no longer be relevant.

The world seems be moving too fast for traditional advisory companies to keep up. We find ourselves trapped in a Flintstones cartoon with our clients demanding a Jetsons experience.  Times are indeed tough and great decisions are hard to make, but there are a few questions which can help reduce the risk of failure and might make for steadier hands:

Question One: What would your future-self do? It sounds silly, but I’ve found that putting a current decision (considering trends, market forces and emerging innovation) into the future can help when making big decisions. Surely your future self is going to be as tough and demanding as you are today… Will she/he be impressed with your decision? Another way to look at this is ‘Will this decision let me be more flexible in 5 or 10 years to address unknown disruption or trends?’ I’m surprised at how often firms appear to ignore the steepening pace of innovation, emergence of newer technologies (cloud, machine learning, etc.) and trends like mobile workforce, client interaction preferences or paperless/frictionless operations. Legacy technologies and insular ‘all in one’ solutions can inhibit the type of flexibility firms will need to respond (increasingly to) in the years to come.  That said, in some cases there simply are no modern or innovative solutions available (e.g. portfolio accounting software) and the best thing may be to simply wait for the market to address it or to proceed cautiously to ensure the most flexibility possible down the road.

Question Two: Does the vendor, tool, data source, etc play well with others? 20 years ago, most processing happened within one tool and required minimal interaction with other tools, processes, or data sets.  Many are still hawking these same solutions today (to the great frustration of technology teams and end-users both).  Have they spent time integrating or building easy-to-integrate architecture that will allow them to easily integrate within your other tools?  How impacted is it by other vendors’ innovations (e.g., move to the cloud)?  Legacy solutions that have made themselves relevant again (like Yodlee) are out there.  Firms like Salesforce will revolutionize the way advisors gain access to specific niche functions within a common platform.  Does your current solution measure up? 

Question Three: Does it work the way (and on the devices) that your people and your clients want to work?  Face it: Clients and advisors are always going to prefer working from a golf course, restaurant or the comfort of a living room. Does this solution work there too? Are you signing up for 10 more years of increasing frustrations from your users?   

Last Question: Is the vendor actively innovating and why?  Having managed large advisory firms’ technology through several vendor acquisitions, I’ve found this to be a critical question. Every vendor will tell you they are innovating.  The more important question is: ‘Why?’. If the answer appears to be ‘to ink deals with marquee clients and then be acquired (or go public)’, you can expect flying monkey wrenches in their organization. Too often, employee/equity holders flee (along with top brains and crucial experience). The purchasing firm is likely buying the licensed cashflow and will snuff-out innovation/improvement (and often bug fixes!). You may rapidly find yourself working with a completely different firm and those product roadmaps, innovative ideas and top technical talent are a distant memory.  The vendor landscape is littered with bright small firms which have dimmed or died out after M&A deals.  Is your current solution at risk? 

Certainly, there are more questions you’ll have to ask and you’re likely making a good decision for your firm.  The last bit of critical insight might be finding the answers to questions that other firms have asked (and lived through).  In my experience, one of the most valuable assets is a good network of like-minded and trusted industry peers that can give you honest and candid feedback about how specific vendors and technologies really work. I’ve been amazed at how open and collaborative most of my industry peers have been and I’ve learned tremendously from their experiences.  Hopefully, my mistakes have prevented other people’s disasters as well!