By Aaron Silva
Contrary to popular belief, you cannot just pick up your Core and IT service contracts a few months before expiration and hope to get it restructured in a way that isfavorable to the franchise. Frankly, this may be the worst timing with respect to trying to get your contract restructured. The act of negotiating a renewal agreement can begin the minute after you sign the original agreement and then continue for years. It takes a team that is in control, well managed, detailed and articulate. And it takes strong management to make sure it gets done and at the right time.
Be honest. Are you one of those banks that manages your contracts with an Excel spreadsheet? If you said yes then congratulations, you are in the majority. While Excel is a great database for this type of "stuff", it doesn’t work unless you actually open that particular worksheet or workbook in time to review your renewal dates. This means you have to set a reminder in your Outlook calendar or other system. Sometimes you might delegate this internally. Either way, it’s inefficient and relies on a human and is now subject to human error. Outsourced Core and IT services contracts with the likes of Fiserv, Fidelity, Jack Henry, CSI, D+H, etc. are usually the second largest expense in your institution, behind payroll. Weigh down this reality with the fact that they are one of your most critical vendors and this is no small matter or fleeting concern. Make a mistake and it will be another 5 to 7 years before you get another shot at your core vendor contracts. An Excel spreadsheet is just not enough and wisely restructuring is key.
Contract Management Systems