My suspicions about the fate of the company that supplies our CRM system have been confirmed after a quick read of their last accounts (for the bargain price of £1 from the Companies House website).
Any business that has a turnover of less than five grand a year but runs an operating loss of over quarter of a million isn’t going to be viable in the long-term. In fact, this company’s situation sounds scarily similar to the business model adopted by some of the large IFA firms that are, fortunately, no longer with us.
Still, one positive point is that the data we have uploaded can be easily downloaded so at least we have maintained the integrity of that data. It’s a pity really because it was a very good system and we had already put it to much more practical use than anything we had before.
So, for the second time this year I’m in the market for a new CRM system. This search process can be time-consuming at the best of times but on this occasion it also about the embedded cost to us of the existing system. The monthly outlay of our current system is relatively modest but it is the man hours that we invested into researching the system and integrating it into our business processes that are truly wasted.
This got me thinking. Why should IFAs have to become technology experts? After researching the market and making the decision about a preferred provider of such technology our future involvement really should be minimal. Technology expertise is not a core competency for IFAs and some business management gurus might suggest that we should outsource it entirely. Our involvement in such systems should be limited to an ongoing financial commitment.
Screw the need for training days, user groups and regular updates as new versions are introduced. Give me simplicity.
I subscribe to the long-held views of Nicholas Carr who wrote “IT doesn’t matter” in which he stated that “technology is a commodity and does not provide a competitive edge to individual companies - using IT simply increases productivity it does not help a company that makes stupid decisions - it will just make more”.
As I embark on yet another round of presentations from CRM providers I already understand how easy it is to make “stupid decisions”.
Firstly, I know that the sales presentations will be excellent. I’ve learnt that you don’t sell software unless you are a demon with the sales presentation. In fact, all this effort that goes into polishing the best sales presentation in the world surely detracts from the real value of the software.
Secondly, you cannot expect to buy a system off the shelf and have it fit perfectly with your business processes. Over the past few years we have devoted a lot of time to defining and documenting our processes. The chance of a piece of software turning up which bears any resemblance to our own processes is slim at best. Incidentally, if by buying the software you then have to change your robust business processes you truly have been conned. We have met a number of IFA firms who had to recruit more people to support the technology they have purchased!
Technology may still be a “con” for IFAs. We may think we need it because, for years, the product providers have been telling us we need it. Yet these same product providers have systematically failed to invest in their own systems or even agree on an industry standard for e-commerce. Origo might have been around 1989 but we still don’t have the ability to get an instant online data feed for every existing policy.
There is little point in having a uniform strategy for e-commerce in financial services if the big players can’t justify the money it will cost to bring their legacy systems up to date.
The best strategy we can follow at the present time is to look past the excellent sales presentation. We need to ignore what the product providers are telling us about technology until they put their own house in order. We absolutely need to avoid any software which requires training days or user groups. If we can come out of the other side of this debacle with a simple piece of software which improves the efficiencies of a number of our key business processes then I will regain the smile on my face and my normally sunny disposition.
Martin Bamford is director of Informed Choice.
The views expressed are those of the author and not those of the company he represents.IFAonline
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Reporting to Steve Hill
Appointed on 19 September