In October 2000, Investment Week launched a technology competition in association with 1ST Software ...
In October 2000, Investment Week launched a technology competition in association with 1ST Software offering the chance to win free software and services for a year, worth over £10,000.
The contestants were required to submit a short business plan on how 1ST Software systems could be implemented effectively within their businesses to boost profitability. The winning entrant would become a proven case study of how a service-driven IFA firm installs, implements and grows the business using client management technology. Investment Week will run quarterly features on the process, outlining the objectives of each phase and explaining the challenges and successes along the way.
The general standard of entry was high, although the ultimate winner shone out above the rest. Matrix Financial Planning of Southend-on-Sea submitted a concise business plan that convinced the judges it had the ability to implement the system effectively. This requires realistic objectives, adequate resources, IT understanding, and the will to succeed.
Matrix, run by Colin Kemp and Robin Port, also believes it will make money out of stakeholder pensions through the use of technology. The judges felt that this would make a fantastic case study, especially at a time when stakeholder presents a threat to the industry.
Kemp says: "Stakeholder is a fantastic opportunity to gain access to our ideal type of client, who is a high net worth individual and probably a company director. These people need advice on all areas of financial products, stakeholder included, and we are in a perfect position to give it. 1ST Software will ensure we manage the whole process".
Hardware and network configuration
To ensure a successful start to an IT implementation, it is absolutely essential to have the correct computer hardware and network configuration to run what will become a 'mission critical' software system. This applies to an organisation of any size. Failure to address this could affect the whole project because systems will underperform or even crash and cause data corruption.
These factors will lead to a deterioration of relations between supplier and user at a time when both parties must work closely together. While every software supplier wants to make sales, 1ST insists that clients complete a technical questionnaire before starting an implementation. If the results do not meet the minimum specification, then we will not proceed until an upgrade takes place.
Unless the IFA has strong IT knowledge, we advise strongly that a professional consultancy be employed. Gone are the days when a member of staff can do part-time network and IT work because technology has become too complicated.
At Matrix, Robin Port was prepared to spend money on upgrades to ensure the whole network performs at optimum. He says: "I have had extensive experience of the consequences of insufficient networks and hardware. If you are serious about technology, there is no financial advantage in cutting corners; you are only storing up increased costs and hassle for the future.
We were running peer-peer on Windows 95 & 98 and upgraded to incorporate a server with Microsoft SBS, also taking the opportunity to add a LAN modem for existing ISDN connection. Old-style B&C cabling was replaced with a hub to allow easier upgrading and conversion to a server-based network. Two workstations also needed upgrading to 128k RAM to ensure they are capable of running the new software efficiently."
Andy Bayford, a 1ST technical consultant, carried out the installation at Matrix. While the hardware and network was installed by a third party, 1ST believe that it should load the software to ensure that every PC is properly installed. There is a popular misconception that IFA software installation is 'plug and play' and does not justify a charge.
Bayford explains: "System installation involves loading the software on every PC and, on an average network, we come across driver conflicts and other minor technical problems on at least one PC. I know how to sort this out quickly, whereas a non-technical user will waste hours of time to find the problem. I also have to load and check the software links to applications like MS Word for mail merge and this takes me minutes, whereas an inexperienced person will take hours."
So, while there is a charge for this, based on the size of the network, it is worth the money to ensure everything works properly. There is also the insurance factor. If the supplier installs the system, then responsibility lies clearly at their door. If a user installs, then the supplier will be reluctant to help solve or support the user when there are problems.
1ST view this as the most important part of the process because it sets the seal for the relationship with the client. It is likely that the only contact the user has had so far with the system supplier is through the sales process. The order has been signed with the promise of a trouble-free implementation and expectations are running high. This is a critical phase during which the supplier must deliver the goods, literally and metaphorically.
In the first instance, planning the implementation involves juggling timetables for hardware delivery and set up, data transfer and training. This can be done over the telephone but for larger implementations, face-to-face meetings are needed. A project plan is produced with key dates and this can be circulated to everyone involved via email. To avoid misunderstandings, it is essential to have a central point of contact at both ends. The user must have a 'champion' to ensure that everything is organised professionally and there are no surprises for staff.
It has to be remembered that in the system selection process, only a few people are involved. So before a new system is rolled out, it is advisable to conduct an internal presentation to staff to inform them of the new order.
1ST representatives Sharon Holcombe and Chris Baigent-Reed visited Matrix in March to discuss the implementation plan. To fit with Matrix's business strategy for the year, the following project objectives were agreed:
Phase 1 The main aim of this phase will be to get the business administration of all high net worth clients and all new business under control with the use of the automated diary system and letter writer. All members of staff, including consultants and reception, will take this on board.
Because of Matrix's stakeholder project, the Group Schemes area of 1ST must also be implemented in Phase 1.
Phase 2 This phase will be to get the accounts function of Matrix involved in the use of 1ST. The aim of this will be to begin producing meaningful monthly management reports. Throughout Phase 1, client information will have been added and updated and Phase 2 is therefore a realistic time to implement the use of the system for cross selling within the existing client base.
Phase 3 This stage should concentrate on the use of the system for compliance and for consultants' usage. Transferring data from the existing computer system is another aspect of implementation that requires a clear understanding of what is involved. It is a potential minefield and not, as is often perceived, a sausage-machine process whereby data is magically converted into a new format. It is an interactive process in which data is converted and the user checks the results for accuracy and discrepancies are reported back.
Another conversion and checking takes place, and so on until there is reasonable accuracy. Do not expect absolute accuracy unless the conversion is very simple (names and addresses). Standard IFA package systems are normally possible, whereas bespoke systems can be more complicated and expensive.
Matrix had bought a well-known IFA system over a year ago but found that it did not complement their business processes. However, there are several thousand names and addresses that remain useful, if for nothing more than an awareness mailer. 1ST have a standard conversion for this system.
Training will take place in mid-April with two consecutive days followed by another day one week later.
Sharon Holcombe comments: "We felt that this amount of initial training would be necessary for five people to understand the system properly, especially as the Matrix objectives are ambitious.
The third day will act as a review of progress and there will be a refresher on key elements."
So the scene has been set for the continuing implementation with business and technology objectives in place. Owing to good communication and organisation, both Matrix and 1ST are very clear on what needs to be achieved. We will be measuring progress in the months to come.
Rory Curran is managing director of 1ST Software and can be contacted on 01926 623 230
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