Pub. 11 2022 Issue 1 15 First, it is important to understand that maintenance is required. You have no option but to make sure things like bug fixes, software outages, regulatory updates, and third-party interface updates are covered. The software needs to work as the financial institutions pay monthly fees. So, after you have enough developers to cover maintenance, the remainder of the budget can be allocated to new functionality. The previous example is extremely simplified because I have never seen a software product team with under 10-12 items on their development road map. But for simplicity’s sake, let’s say that 70% of the development budget of this theoretical provider goes to maintenance. That leaves Product 1 and Product 2 fighting over the remaining 30% of development time across the four new functionality roadmap items. Now, change the four roadmap items to 24 roadmap functions that clients clamor for, and you see the dilemma all software providers face. Which of those 24 projects will be funded this year, and which will have to wait another year? So, why do you, as a customer, care about this? Why do you need to know about development roadmaps and software developer allocation when deciding whether to keep or change your current provider? Here is why: Old software, once developed, is something of a cash cow. Customers pay for it either on a monthly or annual basis. If the software provider can convince its current customers to remain on the product and cover basic maintenance, everything else is profit — all the revenue — very low expense. It is only after enough customers leave that software platform and the revenues do not cover maintenance that the software provider needs to either sunset the product or migrate customers to a newer version. Oddly, it is in the software provider’s best interest to keep some products in “maintenance-only” mode. Older products are often their most profitable. You, the customer of a product gone into maintenance mode, have probably seen some of the signs of one of these cash cows: • Roadmap items never get finished. • You are paying for the provider to develop new functionality, which the provider can offer their other customers. • Quotes for customization or professional services seem exorbitant (they may not have the development team available to customize). • The only items in their development release notes appear to be maintenance or bug fixes. At Remedy Consulting, our business includes helping customers through Request for Proposals (RFP’s) and demonstrating new software products through our System Selections. Generally, a bank will start an RFP when they suspect their product is just not keeping up with the times, but they often do not recognize these signs of an under-maintained product until we discuss changing the software. Think about it: the software provider would be insane to tell their customers that the product they currently pay for is no longer at the top of their development priority list. They hope customers renew their contracts and that new functionality is less important to the current customers than the base model you have had for many years. Maybe what the customer pays for the software currently is cheaper than replacing it with another product. Continued on page 16 Old software, once developed, is something of a cash cow. Customers pay for it either on a monthly or annual basis.
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