What is the true cost of buying software that does not match your requirements for both now and/or in the future?
It is very easy to think that you can manage on some basic software. The cost, the look and the fact that you “need no training” are very attractive incentives to avoid looking deeply into your real requirements. You can find that you have to enter the same information several times, that there is nowhere to put some details and you cannot get the client reports or business analysis that you need.
You may buy a software solution to satisfy your perceived business needs and budget. It is very easy to do this when you have more time than money. As a consequence you can soon outgrow the software and find it is inadequate for your needs.
If you have the wrong software you may just replace the filing cabinet with a database. With better software, you should be able to find all the selected information and then manipulate it for all types of reporting. You can reduce the amount of paperwork by storing faxes, emails, scanned documents properly indexed within the software so the software solution is used to replace the filing cabinet but has infinitely more possibilities.
The ideal is to enter details only once into the computer and then for the information to be available to link to a quotations engine such as Exweb, Webline or AssureWeb, for pension summaries, for pension projection, for business analysis, for merging into letters and reports and to manage commissions. Details need to be properly cross-referenced. For example, if you enter a date, it should automatically pass to the client and/or policy details, the diary, a letter, the to do list, to any tracking events and so on. A member of a scheme should be seen both as an individual and as part of the scheme.
If a client is on the telephone, you should be able to easily find and analyse the client, contact and policy details without having to go to the filing cabinet. All the information should be available to analyse the portfolio and the business in any required way.
The rules for pension projections have gone through many changes in the last two years. Has your software house kept up with them? If you put any projections in writing, you need to be sure that they are compliant.
If you are managing large schemes, you need to be able to move the details electronically, for example to get client details from the employer so that you can maintain the client details efficiently.
One of the most exciting innovations recently is for details from the providers to be downloaded into the financial adviser’s software thus eliminating the need to key it in. With the press of a button you can update all the pension and investment portfolios for all your clients for all the providers that are supporting this work. The software can create the funds if they do not exist, update the number of units, the price, the value, the surrender value and the transfer value. The software should be able to handle all funds for all types of investments, protection and pensions.
The advantage of having the valuations on the adviser’s software is that the whole portfolio is in one place for analysis, summaries and financial planning.
Now the need to ring the providers for a recent valuation and then to enter the details into the software is reduced as the major providers are supporting these links. This list includes most major pension providers.
So what is the cost of choosing the wrong software? It is a big decision to move to another software solution. It can make for a lot of change in the organisation. Unfortunately there is no quick fix solution when it comes to data transfer and if anyone tells you otherwise, then they are probably just after a quick sale! Data transfer does require some time and effort to get it right, but if used well it can provide a good opportunity to clean up your database.
You need to take a long term view as in the long run sticking with software that you can’t use or doesn’t fit your needs will only cost you more business. The cost of moving the data, retraining and implementing the new software has to be weighed against the cost of not doing anything. The danger is that bad software holds back progress and too much time is wasted working around either incomplete or badly written software. The actual cost of software is minimal compared to salaries and the value of time spent more productively.
Of course the best answer is don’t get into the situation in the first place – think carefully about the software you need and what you need it to do. Remember cheapest is not always the best and the inverse applies too.