Pub. 9 2020 Issue 3

15 F A L L | 2020 In institutions where reporting is accomplished in a siloed fashion within multiple departments and business units, seek- ing a single source of truth is often a primary motivator for expanding data capabilities. Pros for buying a software tool: • Prebuilt tools typically promote a faster time to deployment, yielding quicker readiness for use in the bank’s data strategy. • Vendors employ specialized technical resources that eliminate internal turnover risk prevalent with “in house” development. • Buying frees up resources so the internal team can fo- cus on the data use strategy and analyzing data once the tool is implemented. It frees up the “gray space.” • There is a lower upfront cost, which is typically less than the cost to hire developers and divert internal managements focus towards development. • There is minimal ongoing system administration with a purchased solution that is delivered in the cloud. • Vendors leverage expertise from the feedback of institutions of all sizes and complexities, which will benefit all clients. • Utilization of cloud technology used by many provid - ers is faster, cheaper and secure. • The vendor is responsible for solving any integra- tion issues. • Purchased software is updated regularly with ongo- ing maintenance, functionality and new features to remain competitive. • Purchased solutions typically promote accessibility throughout the institution, allowing for a broad user base and adoption. Cons for Buying: • Selection criteria are critical, and it can be time-con- suming to find the right vendor to meet your specific needs. For example, many banks are seeking an out- of-the-box solution that does not depend on internal bank resources to maintain or enhance. • You have limited customization options. • You have potential for integration issues if the right vendor is not selected. • Subscriptions and licenses are often time-based, so costs may grow over time. • Subscriptions and licenses are sometimes user-based, so adoption across the institution becomes more costly and could lessen the overall effectiveness of the solution. Pros for Building: • You have the ability to customize and prioritize devel - opment efforts based on the bank’s specific needs. • Data security may be controlled, depending on the tools used for the build and data warehousing. • You can modify the budget more readily. Cons for Building: • Software development is not your core business. • There are significant upfront and ongoing costs to develop. Institutions often underestimate the time and resources needed for development, which results in a longer time to deployment. A purchased tool may have what appears to be a large price tag, but building a tool incurs costs that are often overlooked, Mary “Gill” Hundley, CRCM, CRVPM Gill Hundley is the chief administrative and risk officer of Roanoke, Virginia-based KlariVis, a data analytics platform designed by bankers for bankers. KlariVis provides a clear vision by automatically integrat- ing, aggregating and analyzing transformative data in an understandable format. Hundley leads the administrative and risk functions at KlariVis. Reprinted with permission, BankDirector.com such as the cost of internal personnel subject mat- ter experts to guide development efforts, ongoing maintenance costs and the unknowns associated with software development. • The project requires business intelligence and soft- ware development expertise, neither of which are prevalent in the banking industry. • There is turnover risk associated with subject mat- ter experts, data analysts or developers. Institution- al knowledge related to the “in-house” built system may leave the bank with the employee. • Projects of this magnitude require continuous en- gagement from management subject matter experts, as this is not solely a technology team project. Bank- ers are needed to provide the vision and banking content for the product, and success is contingent on “in-house” commitment. This is one of the most expensive undertakings because it diverts man- agement focus from other responsibilities to the development project. • There is a negative impact on company productiv- ity. Participant resources will be diverted from core responsibilities to develop the tool. • “In-house” created tools tend to continue to operate in data silos where the tool is accessible only to the data team. • Ongoing development and releases may be difficult for an internal team to manage to meet the evolving needs of the bank. Teams are often challenged with limited time and resources, along with changing business priorities and staff turnover. The question that remains is, do you have the bandwidth and talent at your bank to take on a build project? These projects typically take longer than expected, experience budget overruns, and often do not result in the desired busi- ness result. However, you need to make the choice that is correct for your institution. Assessing how much time is spent on meaningful report creation and whether that task is the best use of a specific employee’s time is critical to the evaluation. F E A T U R E