Four Reasons Why Evaluating Your Tech Stack Should Be on Your Strategic Planning Agenda
By Kelly Flynn, National Director-Contract Optimizer, JMFA
September 27, 2023
As we enter the strategic planning and budgeting season, credit unions must put reviewing their tech stack and contract pricing on their agenda. It will help to ensure operational efficiencies, member satisfaction, and overall business growth.
Here are four reasons why:
1. Aligning your tech stack with your growth strategies positively impacts the member experience.
By analyzing the effectiveness and efficiency of each technology, you can identify ways to streamline workflows, automate tasks, and enhance the user experience. It’s essential to consider factors such as performance, scalability, security, and alignment with your strategic goals.
An intrinsic part of evaluating your tech stack is taking into account your credit union’s growth strategies and new product development. Are your current technologies scalable to meet your future growth? Can they support the introduction of new products or services that align with your strategic plan?
Furthermore, it’s essential to understand how these technologies impact the member experience. This includes the ease of use, accessibility, and reliability of the technology from a consumer’s perspective. Remember, a robust, user-friendly tech stack can elevate member satisfaction and drive business growth.
2. Evaluating contract pricing helps to identify potential savings opportunities.
Next, conduct a comprehensive review of your contract pricing. It involves examining the cost-effectiveness of each contractual agreement and its value proposition. Be sure to think about the total cost of ownership, which includes the upfront cost of the contract plus the ongoing costs of maintenance, support, and upgrades. More importantly, be on the lookout for unnecessary services or platforms that your credit union may be paying for but not using.
3. Examining contract terms and SLAs protects interests and ensures performance.
A comprehensive analysis of the contract terms and service level agreements (SLAs) is paramount. By reviewing the specific terms of each contract, you can ensure they meet the current and future needs of your credit union as well as regulatory requirements.
Are there clauses that limit your flexibility or impose additional costs? Do the contracts specify key elements such as deconversion costs, CPI adjustments, and auto-renewal language?
When assessing the SLAs in place, they should clearly define the level of service to be provided, performance standards, and remedies or penalties for service providers not meeting their service commitments. The audit will help ensure your technology contracts are not only cost-effective but also offer the performance, reliability, and security your institution requires.
4. Balancing cost and value is essential for ensuring that your investment in technology yields long-term benefits.
While cost-cutting might seem attractive, it should not come at the expense of value. Investing in the right technology can provide tangible benefits and support your strategic direction, even if the upfront cost is higher. The cost will be justified by improved efficiency, member satisfaction, and revenue growth.
Benefits of Engaging Outside Consultants
Bringing in outside consultants for your technology contract assessment can have many benefits. With their expert understanding of industry standards, pricing, and service levels, consultants can objectively analyze your contracts. They can identify hidden costs or services you may overlook due to internal bias or lack of knowledge. Consultants can also provide best practices based on results working with similar institutions, helping to negotiate better terms or find more appropriate service providers. As an extension of your team, their experience and expertise could lead to substantial savings, improved service levels, and a more strategic alignment of your technology with your objectives.
The strategic planning and budgeting season is the perfect time for your credit union to evaluate its tech stack and contract pricing.
Doing so ensures you will leverage your resources effectively, remain competitive, and be poised for growth.
For more insights into trends in digital transformation and ways to offset expenses, watch the on-demand webinar “Uncover Hidden Treasure in Your Vendor Contracts.”
To learn more about creating a successful digital transformation plan or how to reduce your contract expenses, contact the experts at JMFA to get started.
For decades, JMFA has helped credit unions to better serve their account holders with a fully disclosed overdraft solution—including the industry’s only 100% compliance guarantee—and to save on vendor contract negotiations.
JMFA continues to be one of the most trusted names in the industry. Whether it’s recovering lost non-interest income, providing a better member service or negotiating the very best deal with your vendors, JMFA helps you achieve measurable results with proven solutions.