Poor vendor selection processes prevent financial institutions from achieving goals rapidly. Celent offers a set of guidelines to improve these processes.
Boston, MA, USA – August 7, 2006 – Despite the fact that most financial institutions depend on vertical enterprise applications (pricing engines, core banking systems, order management systems, policy administration systems, etc.) supplied by vendors, many continue to be ineffective and inefficient at selecting vendor solutions, and the process of systems replacement or addition, already stressful, becomes further laden with fear, uncertainty, and doubt-not to mention excessive and complex documentation which impedes the process rather than assisting it. Celent�s new report, Managing Vendor Selection for Vertical Enterprise Applications, is designed to help financial institutions rethink their processes.
�The vendor selection process at many financial institutions is poorly designed,� said Matthew Josefowicz, manager of Celent�s insurance group and author of the report. �Too often, it is treated like any other purchasing decision where the choice is between different providers of essentially comparable products or services, like in desktop hardware or telecom service. Vertical enterprise applications are more complex and idiosyncratic than almost any other purchasing decision a company can make, and approaching it wrong can lead to unnecessarily inefficient processes that don�t provide the right information to make the best decisions.�
Celent recommends that financial institutions take a revised approach to vendor selection consisting of:
A simplified RFI (not an exhaustive RFP) to identify �deal killers� among potential candidates.
In-person meetings and demos to further evaluate the likely candidates.
Reference interviews to reality-check impressions from the meetings and demos.
Detailed RFPs to only the top two or three candidates, which are already deemed to be possible fits for a binding proposal.
Selection based on response to the detailed RFP and all of the information gathered in the previous steps.
The report is based on Celent�s own vendor selection methodology as well as interviews with industry-leading financial services CIOs. It is 19 pages long. A table of contents is available online.
Celent’s service offering falls into two categories, consulting and research, each of which is dedicated to technology in the financial services industry. We help banks, brokerage firms and insurance companies use IT to enter new markets in the shortest possible timeframes. All of our services are geared towards facilitating better informed, faster decision making. For more information visit www.celent.com.