strategic technology integration for CTOs

From Chaos to Clarity: Why You Should Change Your Processes, Not Your Vendor’s Software

“Technology works best when it brings people together.” — Matt Mullenweg, Founder of WordPress

Every CTO understands the delicate dance between adopting new technology and adapting to it. It’s a narrative I’ve seen unfold time and again: an enterprise wealth management firm signs a contract for new software, most often CRM, new account opening, or a portfolio management system. But amid the excitement of digital transformation, there’s a familiar stumbling block—existing business processes that don’t quite fit the new application’s workflows.

It’s tempting, especially for the largest of our clients, to request that a vendor make changes to their system to accommodate the way the client operates rather than adapting their processes to the new system.

The allure of customizing software to fit current processes is understandable. It seems to promise a seamless integration of the new technology into the existing fabric of the company. But is this the right path?

More often than not, rather than the end of the rainbow, it turns into fool’s gold.

The uniqueness of a company’s internal processes can be overstated. They might be distinctive, but not every one if efficient or value-adding. They might be legacy practices that have outlived their creators, their original purpose diluted by time and personnel changes.

One example is a broker-dealer that decided to replace their portfolio management system specifically to support their growing unified managed accounts (UMA) program. They selected this vendor after a long search process and decided their platform would deliver significant enough improvements that it was worth the millions of dollars they would need to spend. Software conversion costs include hard costs (dollars paid to the incoming and outgoing vendors), soft costs (time spent by their staff) and opportunity costs (time not spent on business operations and distraction of advisors resulting in lower sales and potentially higher client churn). (See 47 Portfolio Management Systems Can’t All Survive)

Yet once the contract was signed, the client presented the vendor with a punch list of 100+ changes they wanted made to trading, overlay management, reporting and other modules.  Their goal was to make the platform more closely align with the way they were operating their UMA program now. 

But by insisting on tailoring the new software to their current methods, the firm inadvertently adopted a new role—that of software developer. This is a significant shift from their core business and one fraught with challenges. The company’s operations team suddenly found itself in charge of customizing a complex system, a task that can quickly become Sisyphean.

And the downstream impacts can be substantial.

A system that has been refined by the vendor over years of service, optimized for performance and stability, is now at risk of being bloated with custom features. Each modification also introduces potential points of failure that need to be individually tested. The likelihood of introducing bugs grows with each new line of code. It’s easy to become mired in the minutiae of validating each new feature rather than focusing on your primary business mission: serving your clients.

We have seen firms suffer implementation delays of six months to two years (or more) because they treated all of their business processes as equally important and demanded the vendor change their software to support all of them. 

Moreover, testing this new “Frankensteined” system becomes a Herculean task. Quality assurance is part science and part art form, that requires a methodical approach and a deep understanding of the many potential points of failure. While the vendor has an experienced QA staff, they’re busy with their existing roadmap and will have to squeeze in testing for these one-off requirements. (See How to Build an RIA Tech Stack That Gets Results)

This increases the probability that bugs will slip through the cracks and wind up in the code that’s released to the client. The client’s middle office and operations staff are the only ones that understand the requirements and are usually tasked with user acceptance testing (UAT). But they’re not trained, staff or managed for UAT and it takes longer than estimated to find the bugs that the vendor’s QA team missed. 

The new release is rejected and has to go through the entire development cycle again.

Now repeat this for dozens or hundreds of individual functionality changes and you see how this seemingly simple request can drag on ad infinitum.

Now consider the impact of a bug that neither the vendor or client catches.

A critical account might encounter the bug mid-transaction, an audit report could miss a key compliance issue or the repurchase of a security sold for tax loss harvesting doesn’t get executed on time and the market moves against the portfolio. The repercussions of these events would be severe, not just in terms of operational disruption or regulatory impact but also in reputational damage. 

And when these issues arise, that’s when the blame game begins. The vendor points to the many customizations while the client bemoans the lack of support. It’s a lose-lose situation.

However, there’s an alternative, a path less trodden but often more fruitful: embracing the technology as it comes.

This approach requires change, and change is inherently disruptive. It’s uncomfortable. It demands that we let go of the “we’ve always done it this way” mindset and adopt new, unfamiliar methods. But this is not just change for change’s sake.

Simplicity and efficiency often lie on the other side of this transformation. Any vendor that’s been around more than a few years will have developed workflows that are the distillation of best practices from hundreds or even thousands of their clients, with an amalgamation of insights gleaned across diverse scenarios. 

We recommend taking advantage of the vendor platform by carefully evaluating and prioritizing any proposed change requests to verify that they will add significant value to your business. This requires a dedicated, cross-functional team to meet with each department that will be using the software and review their key workflows to identify modifications that will be required.  Each change should be critically analyzed to ensure that any requests are supporting significant operational improvements or value delivered to clients. (See $1 Million Worth of Platform Consolidation Advice from Kevin Adams)

At Ezra Group, we have found that most if not all of the initial list of software change requests can be eliminated through a demanding and strict internal process review.  Driving down the number of feature requests will alleviate pressure on the implementation because you’ll avoid spending the time and effort on writing business requirements and then the endless loop of testing and debugging them. This sweeps away a major obstacle to a successful deployment.

Plus there’s a dirty little secret many firms have been hiding for years: their internal processes don’t work very well and have been slowly getting worse.

From marketing to prospect tracking to client onboarding, model management, portfolio rebalancing, account maintenance, money movement or others, most wealth management firms that we walk into have dozens of Excel spreadsheets that fill in the gaps and the firm relies on to move or track data in between their key workflows. 

We often joke that if there ever came a day when Microsoft Excel stopped working, the middle office of most US wealth management firms would just turn around and go home because they’d be unable to do their jobs!

Fun fact: Microsoft reported 258 million paid users of its Microsoft 365 commercial suite of office products at the end of the first quarter of 2020. Monthly usage of Microsoft Excel is up nearly 30% year over year, according to a spokesman.

Firms that rely on spreadsheets for business-critical functions open themselves up to a whole host of vulnerabilities caused by:

  • Insufficient governance and control: It’s almost impossible to properly oversee workflows that span across teams, systems, and locations. This makes it difficult for financial institutions to organize and optimize their processes, let alone maintain centralized control.
  • Lack of transparency and auditability: Manual processes are notoriously opaque, and spreadsheets can reduce visibility for regulators, auditors, and other internal teams. This greatly inhibits decision-making, especially when it comes to evaluating and responding to risk. Data hidden within spreadsheets can also lead to fraud.
  • Higher rates of human error: Manual processes are inherently riskier than automated tasks due to human error, but spreadsheets can be particularly disjointed and unorganized. In addition to bogging down workflow systems, spreadsheets can also elevate security concerns and mask control issues.

Shifting inefficient processes over to match how your new platform works will usually result in improvements to operational efficiency across all workflows that depend on the system. This will come not only from eliminating some or all of the Excel-based steps but also from streamlining poorly designed processes or at least running them in a way that makes sense from the system’s point of view, which will be easier to manage and scale over the long run.   

By better aligning with the incoming technology rather than trying to mold it to your old ways, an enterprise can tap into a wider pool of knowledge and experience, leveraging it for better performance and service delivery.

But what about those processes that truly are unique to your business, those that do add value?

Here’s where tactical actions come into play. Instead of blanket changes, focus instead on targeted customizations that will enhance value-adding processes. Engage with your vendor to understand the ‘why’ behind their workflows and collaborate to integrate your unique value drivers in a way that complements the existing system rather than complicating it.

This approach ensures that any changes made will enhance rather than hinder your company. It’s about finding a balance between the old and the new, the tried-and-tested and the innovative.

In this journey of technological transformation, remember that your role is to lead, to chart the course through the tempest of change towards the calmer waters of improved efficiency and deeper client relationships. Every software application is only a tool, a means to an end, and not the end itself. Your focus should remain on the core of your business—building and maintaining high value client relationships that are the bedrock of your success.

As CTO, you are the steward of technology within your organization. You have the vision to see beyond the immediate discomfort of change. You understand that in the long term, implementing robust technology and aligning the business with it is what will drive future growth and scale.

It’s about trust.

Trusting the technology you’ve chosen and the vendor you’ve partnered with. It’s about believing in the collective experience embedded within the software you’re adopting. And, importantly, it’s about trusting your teams to adapt and thrive in a new technological environment.



The Wealth Tech Today blog is published by Craig Iskowitz, founder and CEO of Ezra Group, a boutique consulting firm that caters to banks, broker-dealers, RIA’s, asset managers and the leading vendors in the surrounding #fintech space. He can be reached at