Secure your bank’s future-ready ERP system

Bank teller windows “Only 14% of banks believe they have the right technology and tools in place to deliver an experience that distinguishes them from their competitors,” said Rich Sittema, principal in Technology Transformation. The majority still need to navigate vendor selection and implementation processes to establish effective cloud enterprise resource planning (ERP).

Many banks are still operating with legacy core banking applications too unstable to support digital growth. Applications are a combination of commercial off-the-shelf and custom-built applications residing on a mix of hosted, on-premise and virtual instances. Often they were acquired piecemeal as the need became critical to the business. The result is an aging and vulnerable environment that is costly to maintain, difficult to secure and of limited value to users.

As a result, according to industry analyst Forester, 61% of banks are currently planning or executing digital transformation.

Define the business case To start the planning process, define a viable business case for digital transformation. Begin by identifying the gaps between current state capabilities and the experience you want for your customers and users.

The business case should include design imperatives that are business-driven and business-led nonnegotiables that will help you down select a manageable number of vendor candidates. For example, if the legacy environment lacks integration among systems, causing customers or users to reenter data multiple times, a design imperative may be “Data will be entered once.”

The business case should also define success. Stuart Reeves, manager in Technology Transformation, defined success criteria as the objective measures that must be satisfied to justify the ERP investment: “Stakeholders should be candid about their expectations, and metrics should be designed to be measurable and attainable, and tracked throughout the implementation and after go-live.”

Choose a vendor Solutions can be complicated and costly. Since roughly 80% of standard functionality is similar across vendors, the 20% that is differentiated should be the most important part of the equation.

Key vendor selection considerations: •  Which business leaders can make design and configuration decisions?
•  What is the provider’s implementation support model?
•  Who will own the development of management reporting and dashboards?
•  Who will own the responsibility for organizational change management during the implementation?
•  Does the solution have an active peer user community and client advisory body?
•  Can you easily modify the solution, including through low code and no code?
•  Is the system easy to use and accessible through touchpoints such as mobile?
•  Does the vendor deliver regular, seamless upgrades throughout the year?
With your business case defined, you can start selecting vendors. Don’t let size and brand reputation distract you from providers that are disrupters in this space. Large, well-known providers may have effective solutions and a deep implementation partner network, but the client experience could be inconsistent. Reach out to peer institutions to understand the lessons learned from their work with providers and their partners. “A provider can give you their install base,” said Sittema, “but only their customers can tell you about the experience of working with them.”

Ask that the production demonstration focuses on the differentiated requirements that are important to your users and can impact your customer. This will give you an apples-to-apples comparison for evaluating vendor solutions.

Differentiated requirements Standard functionality (80% of requirements) may include:

  • Accounts payable
  • Reconciliations
  • Fixed assets
  • Tax
  • ADB calculation
  • Mobile accessibility
  • Report development studio

The remaining 20% differentiate vendors and are crucial in the selection process:

  • Automation
  • Vendor and customer portals
  • Process visualization
  • Low-code customization suite
  • Artificial intelligence
  • Variety of data dimensions
  • Application programming interface library
  • Project accounting integration
  • Financial planning and analysis modeling and reporting
  • Business intelligence suite

10 pointers for effective implementation
  1. Pace yourself. Plan significant time at the beginning of the implementation to extract and clean any data in the legacy systems that will be migrated to the target ERP solution. Waiting to do this until your design or testing phase is done will likely cause delays that make go-live dates slip.
  2. Document current state processes early. The implementation team will ask you to walk through your current-state processes. This helps with scoping the level of effort required to configure the processes in the target system.
  3. Do not wait until testing concludes to design your key management reports. Include a reporting work stream in your resource and project plans, and incorporate reporting design earlier in the process. This helps ensure that reporting errors are caught and remediated with sufficient time to understand and address the root cause of any discrepancies.
  4. Go heavy on initial resource commitments. You can always remove resources without impacting budget or timeline. However, adding resources after the initial scoping period can be much more difficult, especially because it may adversely impact the budget.
  5. Establish a governance model. This will enable the business to drive the solution development and make it accountable to executive stakeholders. The governance model should include defined roles and responsibilities, a steering committee, a communication plan, an escalation path for resolving risks and issues, requirements to enter and exit project phases, and acceptance criteria to enter and exit test phases. Be sure to include the chief audit executive and internal audit.
  6. Create a steering committee. This should consist of stakeholders from each functional area and a representative from your provider. The steering committee should meet regularly with your project manager and functional leads to understand the risks and issues affecting implementation. Decisions should be formalized and captured in the project artifacts.
  7. Set testing expectations and QA strategy. Dedicate people to testing as part of their regular cadence or have a dedicated place for people to execute the testing. Setting those expectations upfront for the testers is a crucial part of driving adoption.
  8. Conduct scenario-based testing. Start testing as you’re defining your configuration and requirements, and thinking through functionality and how the software is going to support it.
  9. Organize your change management. Every user type — from senior executives to power finance users to power HR users to branch users to IT — require a tailored adoption and training plan.
  10. Leverage performance improvement groups. These groups should be in operations. Best practice is to leverage them as embedded members of the project team to help identify, quantify and implement efficiency.

Move forward now ERP solutions are evolving as the market aligns to needs. The major solutions are becoming more cloud-centric; they are including reporting and analytics tools that deliver what bank leaders need to tailor digital experiences for customers and staff.

Sittema urges banks to take action: “Now is the time to identify a tech partner with a solution that helps you achieve your strategy and your design imperatives well into the future.”

For more insights on establishing an effective ERP for your bank, register to replay Cloud ERP for Banking: Considerations for selection and implementation planning.


Rich Sittema Rich Sittema
Principal, Technology Transformation
T +1 216 858 3685

Michael WagonerMichael Wagoner
Managing Director, Technology Transformation
T +1 312 602 8185

Stuart ReevesStuart Reeves
Manager, Technology Transformation
T +1 214 283 8186