Getting IT right, first time

Brokers choose their IT providers for a variety of different reasons - some sound, some less so. The decision that brokers make will affect virtually every aspect of their business for years to come, so it is worth taking seriously.

The right decision will help brokers trade efficiently and profitably.

The wrong decision could prove hugely frustrating as a change of heart can be both costly and time-consuming. This article offers some practical guidance on how brokers can be confident of making an informed and appropriate choice in selecting an IT company.

The first point to make is that good systems do not necessarily make good brokers. It would be fairer to say that good brokers make good use of technology. Whatever any software salesmen may say, a broker should always be realistic about what new technology can do for the business.

Certainly, the right IT provider can help aid operational efficiency and help a firm get closer to achieving its full potential, but technology in itself is no panacea. To make an informed choice of supplier, the buyer needs to be very clear about precisely what is required in terms of what ought to be done differently or better.

When considering a change, brokers often move rapidly to the stage at which they invite a selection of providers to come in and present to them.

As soon as this happens, the decision-making process is in danger of becoming too much about the provider and too little about the needs of the business.

The starting point has to be a detailed consideration of the business itself and its processes. It is advisable to identify where and how IT issues are holding back the business and hindering the things that need to be done to take the business forward. Before a commitment is made, brokers need to be confident that any new provider really can deliver the additional functionality required without detracting from areas that currently work well.

It is all too easy for brokers to see only what is wrong with the performance of their existing systems and only what is right about a proposed alternative.

In reality, few brokers ever fully exploit the potential functionality of their systems. This can lead to unrealistic comparisons between the jaundiced experience of working with one systems provider and the rosy promise of another.

Achieving the best possible technology solution for the business depends on the ability to identify its needs now and for the future, and then pursue an active ongoing partnership with a provider that can supply the specific support needed and the flexibility to adapt as circumstances change. This underlines the importance of a good cultural fit between the company and the provider that is eventually selected.

In the first instance, however, more mundane considerations apply. Any given broker's wish-list is likely to include a number of 'must haves' such as London Market capabilities or a schemes processor.

Broking systems providers are not all the same. Most have strengths in some areas and weaknesses - or even gaps - in others. If a certain provider has no specific capabilities in an area that is key to a business, they should not appear on the shortlist. Beware of assurances such as the provider 'working on' something that will do what is required. What is being sought is proven functionality. Also think carefully before signing up as a 'development partner'.

It is also important for brokers to be clear from the start about the degree to which they want to devolve their systems and IT functions to a third party. This comes down to whether IT is regarded as a core in-house function that directly adds value to the business, or whether it may be preferable to simply outsource it in its entirety?

It needs to be decided which is the priority - the simplicity of an all-in-one application service provider solution, the flexibility of a self-hosted solution or something in between? Knowing what you want means finding a solution that fits should be easier. However, evading the issue can result in compromise or even in conflict, with in-house IT staff fighting a rearguard action against external providers. So, a clear strategy is needed and a provider chosen accordingly.

Once these essential issues have been covered, this should leave a meaningful set of criteria on which to base a shortlist of two or three suppliers that appear to fit the bill. Having reached the point at which serious negotiations with potential providers are under way, it is crucial to apply a consistent and appropriate approach to selection.

It should also be considered which members of staff within an organisation should be involved in the review and decision-making process. Choosing a systems provider is fundamentally a business decision, not a technology-driven one - so resist delegating it purely to an IT manager who could end up making a decision based on technology or innovation rather than on the real demands of building and supporting the business. Think carefully about who should be involved, and agree an accepted methodology at the outset, against which all candidates can be empirically measured.

A third-party consultant with relevant knowledge can help by bringing an objective perspective to the selection process. Involving someone with the skills to analyse the business processes and identify its true systems requirements based on that could well prove helpful. But, provided the methodology is rigorous and methodical, a firm's own people are probably as well placed as anyone to judge what is required and interrogate potential providers' ability to deliver. However, a consultant should not be engaged as a substitute for going through the relevant thought processes personally, as a rubber stamp for a decision that has already been made, or as someone to blame if it does not work out.

Once into the detailed evaluation of shortlisted providers, it is essential to retain control of the process rather than sitting back and letting their salesperson set the agenda. Most organisations will have particular strengths and will want the client to focus on these. So, ensure they are evaluated in the round. Do not fall for a flashy front-end interface without the assurance that it comes with the back-end functionality - such as accounting and reporting facilities - that the business needs.

But, beyond straightforward comparisons of functionality, there is also a cultural dimension to making the right decision.

Try to get a feel for how the relationship will work in practice. Who will you work with, how will service issues be addressed, and what kind of support can be called upon? Support is an absolutely critical issue.

It is not just a question of knowing there is someone on the other end of a telephone. Helpline operating hours and average response times are relevant, of course, but what will really make the difference is how the provider performs on issues such as technical expertise and data transfer - particularly if a firm is acquiring other brokers.

Getting the most from an IT company requires an holistic working partnership on a variety of levels - from the chief executive down to individual users.

As mentioned, a comfortable cultural fit is important. Are they on your wavelength, do they understand your business, how responsive will they be to your specific development needs?

Obviously, it is not always easy to get a handle on these kinds of issues.

One of the things that can help is to talk to other firms, preferably those with a similar profile, that are already working with the companies that are being looked at. Any provider will be able to suggest a reference site that can be visited to see their systems in use. But the ideal reference site is one that is selected without the guidance of the provider. Every provider has at least some satisfied customers on its books, but more may be learned if the approach is done on your own initiative.

However, be mindful that, when asking a neighbouring broker about their choice - while this can provide a good indicator - senior people there are likely to put a more or less positive gloss on their choice of provider.

They are unlikely to tell a prospective client that they did not really think it through, that they have made the wrong decision and it isn't really working out. But, it is a good idea to try to sit down with actual users and find out how the system works for them in practice. Try to get a feel for how well the provider responds to their needs in terms of service and support. Imagine yourself in their shoes and read between the lines.

Above all, be clear about the reasoning behind the decision-making and do not deceive yourself or be under any illusions. Getting into a relationship with a new provider is a long-term commitment that cannot be easily or painlessly unpicked. So be sure you are doing it for the right reasons.

Service, implementation and ongoing support are just as important as more tangible issues such as what the software is supposed to do. Try to get beyond the superficials and do not commit yourself unless you are genuinely convinced you can see it working in practice. The right choice will be a cornerstone of a strong, profitable and growing business, whereas the wrong choice will be a millstone around your neck.

- Paul Methven, Product development manager, Sectornet.

Do not choose an IT provider:

- because of its innovative technology platform;

- because the salespeople are impressive;

- because the introductory rates are attractive;

- without first clearly mapping your requirements;

- based on promises of future delivery;

- based on cost alone; or

- lightly - this is a long-term commitment.

Do choose an IT provider:

- because it offers the functionality you need;

- because it understands your business;

- because it provides flexibility as your needs change;

- based on successful use by similar companies;

- as a business decision rather than an IT decision;

- based on seeing it in use; and

- that provides good technical support.