What we have learned as a specialist service provider about technology integrations.

I have just read Phil Young’s blog on the technology market. FinaMetrica is a typical specialist technology provider in his terms.

Post RDR it’s clear, to us at least, that a standard approach to risk tolerance testing, the language of risk and descriptions of risk would enable the whole supple chain to communicate more consistently with both each other and our investors. Rather like standard blood pressure readings works for doctors, specialists, drug companies and patients. Consistency at the least will take the surprise out of investment performance and will improve profits through greater investment satisfaction and persistency.

Arguably the future should be simple. Our test doesn’t change, its widely recognized as being ‘best of breed’, subscriber numbers grow steadily, we should be mega profitable but constant re-investment delivers a cost curve that stubbornly follows the revenue curve. So we still have to allocate our scarce resources to new developments carefully. By now we should have integrations with all the dominant service and product suppliers in the advisory market supply chain. Alas, this is not the case.

Are there queues of larger businesses wanting to integrate with us? Sort of. Our reality after 15 years in the market, and 10 years in the UK, is that integrations do happen, but often take years to process, even with goodwill on all sides. Our strategic plan is to work with the major players in the supply chain to make life easier, to improve business processes for our primary customers, adviser subscribers. But everything moves as if are walking through quicksand. We are tooling up to speed things up but visible progress is painfully slow.

Here’s what I have learned about sales. When I deal with smaller firms I am often talking with someone who has Triple A credentials.

-She is able to Articulate the need for my service
-She is Anxious to do get going sooner rather than later
-She has Access to the cheque book, she can make a quick decision.

And while integration with existing systems would be good, it’s not an overwhelming imperative. It can be done later. ‘Work arounds’ are doable. Average time from trialling to subscription is less than a year, often far shorter but sometimes much, much longer.

Let me juxtapose this with an enquiry from a typical larger business. It’s usually from someone who doesn’t always really see the full picture. She is a line manager with specialist rather than comprehensive knowledge of the advisory supply chain and its dynamics. And FinaMetrica with all of its’ ‘if you find this, then don’t proceed until you have resolved with the investor conditions’ is somewhat baffling. She would like to believe that financial planning can be reduced to a simple process if only people like us were more pragmatic. We also find that:

-Integration is rarely urgent. It’s planned for next year, some time
-She is not Authorised to negotiate a volume, price and time table
-The actual integration team already have 150 projects on their ‘to do list’, and
-There’s a centralized purchasing officer and methodology that she only has a hazy knowledge of that we only get introduced to towards the end of negotiations.

It’s hard to find one individual with Triple A credentials in larger businesses. It’s more likely to be a committee. Net result is that integrations are usually slow, time and labour intensive.

So what can be done to make things go faster? The simplest recommendation I can make if you are an adviser is to take every opportunity to ask your product and service providers to integrate. If there is funds flow on the line, things go just a tad more quickly if advisers give their need for the integration a regular push along.

The UK is a small advisory market with less than 25,000 advisers, the US has over 900,000 according to a recent Cerrulli report I read. Accordingly many American technology companies are likely to retain their internal focus. Too much to be gained by winning local market share compared to the risks of working in a smaller foreign market place. The UK, Australia and India are likely to remain serviced by smaller specialist technology providers for some time to come. No bad thing from my perspective. Not sure how easy it would be to work in a large Organisation.

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