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Putting Out vs Putting In

Putting Out vs Putting In

The ideas of Putting Out Software versus Putting In Software are two radically different approaches and goals. Especially for financial software; the difference is the banks internal needs to the software vendor's external goals.

So let me be clear; Bankers Put Software IN and Vendors Put Software OUT, got it.

There is a major difference in how you have to think and approach your day as a banker as opposed to a vendor. This is such a basic but important difference and I see companies get this wrong all the time, knowingly!

Have you made this Mistake?

Maybe, its worth saying again; Bankers Put Software IN and Vendors Put Software OUT.

The world of selling financial software is very competitive with long sales cycles and demanding bank clients who are always much bigger and used to dictating their wants. In this world, many companies look for some advantage and rightly so, but instead of the advantage of innovation or Customer Care, they think an easy advantage can be gained with one big hire. Without much depth of thought the light bulb goes on brightly, let's hire a big name banker. With a through search and a big package the announcement goes out, ABC Company has hired a Big Banker to let the market and other banks know that company ABC is serious about its business. Much fanfare is made internally and externally by management regarding this new executive and how he has his finger on the pulse of the market by knowing what every banker wants, because he is after all a banker. ABC Company internally makes changes bringing in more process just as a bank does, although they forget that they are much smaller that any bank. The company learns how to run more like a bank and the banker learns, on-the-job, how to be in business.

For a banker the focus of their bank job is to service their clients through the use of software. They may only have a few times in there career when they are involved in the process and implementation of a new software. They get very good at the selection and implementation process in line with their own banks needs, some of which are unique to their way of banking. At the bank, the need is to provide the best service to our clients, in particular the top 20%. A banks strategy may not include the newest market innovations. In fact, the banks want the latest and greatest ... second!

Now at a software vendor, products, upgrades and enhancements must go out the door much more frequently than the typical banks replacement or upgrade time cycle. The latest innovations must be integrated into a vendor's products or at least its strategies. The vendor more importantly must offer products or solutions that will appeal to the largest market possible in order to have a wide enough prospect base to continue to fuel the company's growth. This means that a vendor must have ears and eyes open to know what the market needs globally and across multiple bank types or tiers. Innovation starts at the vendors, it must, as the need to stay ahead of your competition is critical and to be first significant. Software vendors say; build it once ... sell it many!

When I hear a financial software vendor has made a sexy new hire of a banker with a known name, I cringe. Chances are good that the banker is a very bright individual as evidenced by his known name and has the expertise of a career in banking. What may not be so apparent is that his experience will be with one product, put in one time, for one bank and one set of bank clients. Banks are not environments of innovation and banks do not have to sell with the pressure that a vendor does where everyone in the company is on the line.

That is not to say that bank work is easy because its not. It is to point out that there are real differences between what to expect with a major hire. We can all think of an example where someone left to join a vendor only to shortly return to bank life. If a vendor's goal is to name impress the market, fine. The goal to push business to the next level, needs an experienced executive from the software industry as a must hire. They will have the industry knowledge, contacts and most importantly the mentality. If you are a banker then Putting Software In is what you do, but a vendor succeeds only by Putting Software Out...

 

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Comments: (2)

Patricia Hines
Patricia Hines - Celent - Charlotte 02 November, 2013, 15:26Be the first to give this comment the thumbs up 0 likes

Interesting observation, Chris as I have seen this example in the real world. But some of us have made the leap from being a banker to a solutions provider, bringing along a wealth of industry and product knowledge.

Chris Principe
Chris Principe - Solidus Global, Inc. - Miami 02 November, 2013, 15:52Be the first to give this comment the thumbs up 0 likes

Thanks Patricia, and please do not get me wrong as there are people who make the transistion. The point is when it is tried as an easy fix it mostly fails. Its important for Software companies to remember that there business is about producing products with the widest market reach.

Chris Principe

Chris Principe

CEO

Solidus Global, Inc.

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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.


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