EXPLORE ALL OPTIONS Exploring contract options does not necessarily mean switching vendors. Considerable investments of time and re-sources go into developing good partnerships with suppliers. It would be foolish to jettison this type of relationship sim-ply because of price. However, it also is easy for longstanding vendor relationships to become overvalued. It is important to ask, “Is this relationship happening because it has always been this way, or is it because this is the best business option for this institution?” RED FLAGS Just as certain characteristics are required in signing a contract that represents the best interest of an institution, there also are warning signs that may develop that should not be ignored. For example, if a vendor comes to a bank with an unsolicited contract renewal off er that includes signing incentives, it may indicate that the contract is not drafted to the bank’s benefi t. Conversely, if during a renegotiation process a vendor submits a proposal but then declines to continue to participate in the bid, there may be something behind the scenes that would merit exploration. Usually this has to do with a vendor feeling that a lack of com-munication and transparency is creating an unlevel playing fi eld. COMMUNICATE Successful contract negotiations all have one characteristic that maybe easily overlooked — communication. Th is means that all the parties involved understand how to clearly articulate their needs while also comprehending the needs of the oth-ers involved. One area that is particularly diffi cult to discuss is pricing and payment terms. Not discussing these elements openly and directly will create a dysfunctional and, sometimes, adversarial environment. Any third party a bank uses to assist in vendor contract negotiations that does anything to limit this need for transparency — e.g., not allowing vendors to speak directly with the institution — compromises the quality of the outcome of the process. ABOUT TERMINATION FEES Remember, just because the early termination fees in a con-tract are painful to imagine, renegotiation of that contract is not out of the question. A good vendor partner will work with a fi nancial institution to fi nd a middle ground that addresses the needs of both parties. On the other hand, if a vendor relation-ship is such that a change is needed before a contract expires, a new vendor may be willing to explore ways to mitigate the impact of the termination fees. HELP IS AVAILABLE A good third-party contract management partner can be particularly useful in guiding an institution through the ne-gotiating process. Banks evaluating such partners should pay careful attention to the fi rm’s areas of expertise and how it it compensated. Seldom is any one fi rm good at everything. In the quest for a better effi ciency ratio, do not overlook what best practices around vendor contract negotiation can do to support the eff ort. Brad Downs is CEO of SRM (Strategic Resource Management). For more information, visit www.srmcorp.com. AUDIT YOUR BILLS Imagine licensing services from a vendor that your bank never has any intention to use. Not likely, right? Yet, banks that do not review vendor invoices to ensure they are still us-ing all the services they contracted for risk doing that. Often, refunds can be issued for services that are no longer active, or perhaps were never used. Tracking the detail in vendor in-voices can be time-consuming but many fi rms like our own off er services and software that tracks and audits these details over the life of a contract. DATA PREPARATION SOFTWARE HARNESSES BUSINESS INTEL BY JANET GRIMSLEY T asked with managing the business intelligence needs of the bank, my department is faced with the challenge of harness-ing data (and lots of it) to help employees perform reporting and analysis vital to day-to-day operations. As is common to many fi nancial institutions, data is spread across multiple disparate sources and in various fi le formats. Compiling all the data neces-sary for reporting and analysis used to entail manually rekeying in-Cybersecurity for Community Banks Universal Bankers NEXT MONTH: formation into spreadsheets. Th e old-fashioned, but prevalent, cut, paste and reformat method was incredibly time-consuming — add to that, the hours spent on line-by-line reconciliation. Th is traditional approach was particularly unbearable after making the transition from one core processor to another; we were trying to access data in fi les from the old and new vendors, as well as information housed in a cold storage system. It was time to evaluate our whole reporting framework. We tackled the problem by using self-service data preparation software; specifi cally, DataWatch Monarch. Armed with this technology, we’re able to acquire data from virtually any source, in any format (including PDFs), in just a few clicks of the mouse, and blend, enrich and prepare it in minutes. Th e platform has become the fi rst thing I go to when asked to do anything — it has turned out to be an unexpected utility for reporting and analysis, and ultimately, informing decisions that impact the bottom line.