When rolling out any new system or process, the implementation team is always the most critical determinant of success. When implementing a new pricing system, though, the makeup of the team is even more important than usual. This is because pricing is perhaps the most cross functional process in a bank, and will have lots of conflicting perspectives. Selecting a team without proper balance or without sufficient leadership can completely derail the project, no matter how well designed the system might be.
The good news is that we have now done a LOT of these implementations, and we have learned what works and what doesn’t. In this article, we will share with you the recipe for building a winning implementation team. If you follow these guidelines, you will be well on your way to a successful rollout and can quickly start winning more and better deals.
Below we list the specific roles that will need to be filled during the project. The actual size of your team will vary depending on how you choose to fill the roles. Roles do not need to translate to one person, as the ongoing requirements from each person will be minimal. For some, the team is small, and individuals fill multiple roles. For others, the teams are larger, and individuals from across the organization are pulled in to add their expertise for a few small decisions. At the planning stage, all of the team members do not need to be finalized, but it is important that we at least determine the individuals that will “own” and be responsible for the major components.
The Executive Sponsor is the implementation project’s champion, and likely is the individual from the executive ranks that pushed for the system through the sales process. Their role at this point is to ensure that the system remains a priority within the organization, and that the project gets the appropriate resources and prioritization to be completed in a timely manner. They should be involved from the beginning through lender training. The Executive Sponsor will not need to attend every meeting, but it is helpful if they stay involved enough to provide high level strategy guidance and act as “referee” should the project get off track.
The Project Lead manages the overall project, and coordinates the rest of the team members during implementation. For larger teams, they generally act as the primary point of contact, and they then pull in resources and experts from the bank as needed at each step. In short, they are responsible for making sure that tasks are completed in time to keep the project on schedule.
System Administrator (aka “Chief Pricing Officer”)
Your System Administrator is the MOST IMPORTANT ROLE IN THE PROJECT. We have found for an overhaul of pricing to succeed, you must have the right person managing the process. Since they will own the pricing function going forward, the Admin should be involved from the beginning stages of the project. They will need to be well versed in the business requirements of the system and also have a solid background in finance and/or credit. This combination of skills will ensure that they are able to translate the bank’s high level strategy to the correct pricing tactics, and they can configure the tool to align with those tactics.
While the Admin will be responsible for most of the day-to-day management and configuration of the system, it is vital that they have more than just technical skills. They must also have sufficient authority and rank within the organization to be able to make final pricing decisions, and they should have enough respect to be able to serve as the go-to resource for pricing the most complex relationships. This is definitely not a role for a junior level analyst.
Given the importance of this role, we suggest you check out some of our additional content on the subject.
- The Earn It Book, Chapter 5: The Case for a Chief Pricing Officer
- Podcast: The Chief Pricing Officer
The entire PrecisionLender system has been built on the foundation that we start at the lender/borrower conversation and work backwards. Our job is to facilitate better conversations between your customers and your lenders/relationship managers.
To that end, the rollout to lenders ends up being much smoother if they have a voice early in the process. All configuration decisions should be made with the lender in mind, so this role is incredible important. This should be a few of the top producing lenders in the bank, and their role will be to provide the perspective of the end user. They should speak up whenever roadblocks are being put in the way of the “front of the bank” and their ability to quickly negotiate fair deals with borrowers.
The lenders should be directly involved in Product Setup and User Acceptance Testing, and will be an important voice when Target Returns are being finalized.
The Credit Expert is responsible for helping determine how credit risk (specifically probability of default and loss given default data) is translated to pricing new opportunities. They will coordinate the gathering of the data needed for the credit migration analysis, and work with PrecisionLender’s consulting team to finalize the credit specific assumptions on risk grades, collateral, guarantees, and default rates.
The Finance Expert will be involved primarily in the early setup that covers bank level assumptions. They will work with the PrecisionLender consulting team to determine tax rates, funding curves, cap/floor optionality, and capital assumptions. They are also typically involved in the setting of Target Returns, as they should be able to provide context on the rest of the bank’s balance sheet.
The data expert will assist with creating the data files for the Relationship Awareness (RA) module (if licensed). Their titles can vary widely from bank to bank, and depending on what the source of the data is for your institution. Many larger banks are using data warehouses, and in that case, anyone familiar with querying that system should be able to provide the necessary extracts. In other banks, the data will be extracted directly from the core system, so you will need someone with specific knowledge on writing reports/queries of that system. The PrecisionLender RA team will handle the bulk of the mapping issues, so very little specialized data skills are required, and we will need minimal involvement from your IT department.
Once you have your team in place, PrecisionLender’s Client Success team will take the lead on making sure that everyone involved is aware of the current status and next steps. We will pair each of your team members with the appropriate resources on our end to make sure that they can complete their part of the project quickly and efficiently. With this team makeup, you should be well on your way to a successful implementation!