Technology is constantly changing, so what constitutes good due diligence today may not be good enough tomorrow. Many FIs neglect the importance of doing proper due diligence based on current technbology in order to find a vendor that best meets their current and future needs.
In this episode of the Digital Banking Podcast, we heard from Shaun Murray, CEO of Enhanced Software Products, Inc. Shaun and our host Josh DeTar discussed the importance of practicing due diligence when choosing a new digital banking solution and how this can lead to long-term, mutually beneficial partnerships.
⚡ Include your staff in the due diligence process. In our guest’s experience, only managers are involved in the due diligence process in many companies. However, he believes including as many team members as possible is the formula for making the right decision. ”I’m not saying that every credit union [should] have every person involved, but it sure seems to me like the more people you have involved with buying whatever product or partner you’re looking at, the smoother the transition will be because you’ll have buy-in,” said Murray. “Experience tells me that if that doesn’t happen, it’s harder to drive the initiative down from a managerial level to your staff to have them buy into the decision because it feels like the power of one. It just doesn’t work.”
⚡ Making the right decision involves asking a lot of questions. When an FI plans to purchase new software or implement a unique solution, finding a vendor that meets its needs can be tricky. It’s critical to ask a lot of questions, both of the vendor and of their customers. Don’t be afraid to ask the vendor referrals because the best way to determine whether a company is worth considering is to consult with their customers. “That’s a big part of what we see,” said Murray. “Not saying, ‘Hey, I don’t want Shaun’s feedback on this. I want the unfiltered version.’ Well, there you go. You call them all [the other customers].”
⚡ You want like-minded vendors. Credit unions should build long-term relationships with vendors, and to accomplish that, both FIs and vendors should determine whether there’s a good cultural fit. That’s why open communication is so vital during the due diligence process. ”When you’re talking about a partnership that is likely to last for years, knowing full well that you are committed to it, those tough questions have to be answered internally,” said Murray. “You have to be willing to share them openly and probably right away. Because if you’re waiting for somebody to drill down into this, I think you might miss the boat at times. I think you need to be more direct with, ‘This is what I’m looking to accomplish. Can you do this? Yes? No? Okay.”‘