Are you inadvertently sabotaging your service provider selection process? If your CTO and technology team aren’t at the table from day one, you just might be. Learn why in the article below.

By Christine Waldron, Senior Vice President, Chief Global Strategy Officer and Head of Client Management for U.S. Bank Global Fund Services

Fees, product offerings and other business-related concerns often drive the decision when an investment firm chooses a service provider. Technology compatibility? A mere afterthought. 

Many C-level decision-makers trust that once they’ve picked a provider, their tech team will be able to sort out the integration details. But this mentality can lead to serious complications down the road. If technology-related factors aren’t central to your selection process, you open the door to inefficiencies, cost overruns and a variety of preventable obstacles.

Fortunately, to choose the best service provider – and foster a successful, long-term relationship with them – the secret is simple: involve your tech team from the start.

The selection process

If you want your tech team to have a solid working relationship with your service provider, it’s important to choose the right one. You need a partner who fits your needs – not only from a business standpoint, but whose product solutions are flexible and adaptable enough to mesh with your systems. 

Finding this partner requires the active participation of your CTO and tech team. It’s not enough to inform them of the decision after it’s been made. Rather, you need to involve them in every step of the decision-making process:

• Request for proposal (RFP): Your tech team should help design the RFP. Their questions should be incorporated so candidates can address systems-specific issues and concerns. 
• On-site visits: Your tech team should participate in on-site visits with the potential service providers as part of the due diligence process. During these visits, there should be a separate stream of dialogue within the overall business-side conversation to discuss technology systems and integration. 
• Final selection: When the time comes to choose, your tech team’s opinion regarding the ease of integration should be given significant consideration and factor heavily into the decision.

Continuous engagement 

After the choice has been made, there should be an ongoing dialogue between the tech teams of both parties. They should establish regular meetings – not only during the integration, but also afterward to exchange information and ensure strategies stay aligned. This way, they can keep each other well-informed of issues and concerns – as well as changes, systems updates, new tech advancements under consideration, etc. 

This also enables both parties to maintain consistency in how they manage change integration. For example, if your team needs to make alterations to your environment, everyone will have a solid understanding of how that impacts the service provider – and vice versa.

Too often, busy executives approach tech integration with a “set it and forget it” mentality. They put the pieces into place, think the work is done and fail to communicate. Inevitably in situations like this, someone will implement a change or upgrade, they’ll neglect to notify the other party and the system will break down.

With regular touchpoints and open dialogue, both teams are better able to understand the integration from a technical perspective and work together to accommodate modifications or improvements.

Establishing touchpoints and aligning strategy

How you approach establishing touchpoints with your service provider depends largely on your needs and capabilities. If you rely heavily on their expertise or you’re in the middle of an upgrade cycle, you may want to set up meetings once or twice a month (or more frequently, if necessary). If you have sophisticated tech capabilities in-house and everything’s running smoothly, quarterly meetings may be sufficient to review technology strategy and changes.

Good providers will stay attuned to your needs and adapt to them. You should be able to count on them to make themselves available as necessary when issues pop up.

Fundamentally, the focus of regular interaction should be to discuss and understand change. Conversation topics might include: changes to the environment, upgrade cycles, hardware sophistication, business continuity, disaster recovery – or any other pressing concerns.

Additionally, as fintech plays a larger role within the industry, it’s important to understand your provider’s fintech strategy and how it might affect you. Your team should make sure to include that in the conversation and establish technical touchpoints for those innovations as well.

By involving your tech team early in the provider selection process, you’ll make a more-informed choice in the short term. You’ll make everyone’s jobs a little easier in the long term. And ultimately, in the even longer term, you’ll establish a strong, successful and enduring partnership with your provider.

U.S. Bank offers customized operational solutions combined with the strength and security of a major financial institution. Visit us at usbank.com/investmentservices to learn about our investment service solutions.

Christine Waldron, CPA, oversees the U.S. Bank mutual fund administration, tax, relationship management, shared services as well as product and strategy teams. She works to execute key business initiatives across U.S. Bank Global Fund Services. She has been with U.S. Bank since 1998.