From the March 2007 issue of Wealth Manager Web • Subscribe!

Data Distiller

Carol C. Pankros, CFP, was facing the downside of success. By 1995, she realized her 10-year-old firm, CCP, Inc. Financial Planning Services in Palatine, Ill., was in need of another employee. She had to figure out how she and the new employee could connect with each other, and her growing client list. She had been using ACT! contact management software, but that program and the other CRM software she considered lacked desired features. "I realized the need to document everything I did," says Pankros. "We would need a communication system to know what was going on, and the documentation would become even more important under SEC compliance requirements." It's a simply stated problem, but finding a solution turned into an odyssey that continues to this day.

In addition to using ACT! Pankros had been tracking client-contact details in a Word document. That arrangement had become unwieldy, and she needed a new approach. Jeff Hudren, her tech consultant at the time, suggested Lotus Notes, which had gained a strong following among large companies. Notes combined security, flexibility and collaboration features that Hudren believed would give CCP the platform it needed to manage a growing clientele. Although Pankros had never used Notes, she agreed, and Hudren began working on a new Notes-based application that they named CMS for Client Management System.

In 1998 Worth magazine listed Pankros as one of its top planners, the first of several listings. The resulting publicity boosted growth, staff size, and the need for internal collaboration. "That exposure was a real growth stimulus over the next two years," says Pankros. "I've subsequently hired about one employee per year, and now we have nine employees. We've grown to serve approximately 350 clients, of whom 250 are active, with the rest coming in to see us occasionally." Spending on technology has also increased over the years. CCP spends an average $60,000 to $70,000 each year, with additional outlays of $20,000 to $40,000 when they undertake a development project.

The staff began using CMS to track and monitor every aspect of the work they do for clients. Every client has a primary financial planner/team lead with whom he or she meets and talks most frequently; a paraplanner assists each financial planner. If a client's financial planner is unavailable, any of the other three planners in the office can go to CMS and find the information needed to address the client's questions.

"CMS is the one application that everyone has open all day long," says Carin P. Roman, CFP, Pankros's daughter, who joined the firm in March 2001 and became its president in December 2006. "It's the first program we open in the morning and the last one we close at night. Every email, call, internal brainstorm--it all goes into CMS. It incorporates our documents, correspondence, and workflow management."

As the firm grew, Pankros and Roman worked to improve efficiency by breaking down client-focused and management activities into projects that consisted of patterns with sequential or concurrent tasks. "We have created project templates in CMS by identifying frequent processes," says Roman. "For example, for a client's annual review we collect data, update spreadsheets and projections, run reports, and track progress toward existing goals. We can break down that process into, say, 15 tasks. Every client is different, but the big-picture tasks remain the same largely. So we created a project for the annual review that tracks the project tasks and allows us to manage workflow." Each employee can customize his or her views of the CMS databases to focus solely on the information needed for his or her work.

In 1997, Hudren moved onto other projects, and Pankros found replacing his expertise was a challenge. It was an "exceptionally painful" period, Pankros notes, partly because the firm had a proprietary Notes-based CRM system. "It was hard to find qualified people because it took a specialist with Notes expertise," she says.

CMS continued to operate under each new Notes release, but the application's databases were not optimized for the new versions. Each developer had worked in a different version, and the application began to perform more slowly with intermittent, unexplainable glitches.

By 2000, CMS was showing signs of becoming decreasingly robust, Roman says. She spent much of her first year conducting a comprehensive review of the application; her analysis and the staff's input revealed needed improvements. "For example, CMS had a single field for entering a client's email address, but many clients have multiple email addresses," she says. "It's the same with phone numbers: Clients now have multiple homes, cell phones, pagers, etc. In some cases, we need to maintain contact with independent adult children about their parents' accounts. CMS hadn't evolved, and we needed to enhance the data we could track."

These are common problems with older software, according to Andrew Lauter, president of PSC Group, LLC, the information technology-consulting firm in Schaumburg, Ill. that Pankros and Roman hired to rewrite CMS in late 2004. Software follows an evolutionary path, Lauter explains, and at some point, it gets very complicated to change. "Eventually the weight of the software becomes its own burden," he says. "That's why big software companies do major rewrites every so often."

Although PSC Group also works with Microsoft products, they decided to continue using the Notes platform. "Notes is a business process platform, a collaboration platform, and you can do many things more easily and less expensively on an existing Notes platform," says Lauter. "In Notes, I have an environment that manages content, data storage, access rights and retrieval in a single platform, all inherently married to the collaboration or PIM tools (calendar, messaging and address book). But I take no credit for selecting Notes--it was here when I showed up. I didn't change it because there is no strategic advantage to changing."

PSC Group had not worked with any independent wealth management firms before the CMS project. Nonetheless, Pankros says that working with PSC Group offered several important advantages. The company had a sizeable staff and experience creating CRM applications for large financial services firms. PSC Group had leveraged that experience by developing their Frameworks approach to customized applications. Frameworks are elements of software code such as objects, processes and scripts that can be used for multiple projects. This approach to recycling code reduces development time and costs. Lauter draws an analogy to building a new house: "You pick a house model and then you get involved with changes to specific components. If you had to pay an architect to build you the basic design, it would cost substantially more. Frameworks brings the basic software architecture to the table."

Applications have three components, says Lauter: the data layer; the business rules layer (such as access or privileges); and a presentation layer. The business's operations determine the application's specifics. CMS is a client management system, so the data layer contains tables to support the client definition. "I want to manage activities related to clients; tasks when I have multiple step activities; and the content for that client such as attachments," Lauter says. "Fundamentally, on a database table level I'm managing clients, activities, and content--that's the underlying structure of CMS." In addition to offering potential time- and cost-savings, the Frameworks approach appealed to CCP for defensive purposes. Frameworks and the CMS customizations follow generally accepted Notes design principles, and if CCP decided to change developers in the future, a new developer should be able to understand how the application works.

The redesign--called CMS II--was a team effort. Pankros, Roman and Lauter handled the higher-level themes while Roman worked with PSC's Crystal Broj, project manager, and Alex Kassabov, lead developer, to develop and test the new version. "The first big step was to try to achieve the same functionality CCP had before," says Lauter. "That was a huge lateral move. One of the unique things about CCP is that there is a lot of process in how they work. The firm built the business model around leveraging those processes to be efficient, so the first step was to provide a lateral feature functionality. We worked those functions into the system, and in 2007 we will fine tune CMS II and integrate it more tightly with the other systems in the business."

The redevelopment took more time than either party had anticipated. Roman estimates that she spent the equivalent of approximately 13 to 14 work weeks on the project in 2005. "I think that the original developer from PSC Group underestimated how much our original CMS could do," she says. "In putting together the specs for the CMS II design, the time estimates from PCS Group and CCP and the budget estimates were inadequate. PSC Group honored their budget estimates, but the time commitment was significantly higher on our end."

Roman describes the development and testing phases as an eye-opening experience. She and the CCP staff worked with simulated client data during the redevelopment to provide feedback to Broj and Kassabov. Identifying problems proved easier than correcting them, however. "Software testing is not very straightforward," Roman says. "As I dug into it myself and with our testing team, we would find problems in unexpected places. Even a seemingly simple change can have ramifications in a lot of different places."

The extensive pre-release testing paid off when CCP switched to the new version in December 2005. CMS II (Phase I) worked immediately with no major bugs. Roman had organized training sessions for staff to introduce the new version and close the gaps between CMS I and II as the changeover date approached. Consequently, staff members were familiar with the new forms and data screens required for their work. CCP had also identified the key data to transfer from CMS I to II. PCS Group wrote an automated agent to transfer those data, and CCP hired a college student to enter the non-transferable data. CMS I continues to function as an archive for activities completed before the changeover. Just as Pankros and Roman hoped, CMS II proved more stable than its predecessor. The staff has found a few bugs, but there have been no system crashes since the switch.

Because CMS II is built on Frameworks, some of its terminology and data screens are a blend of CCP and PSC's predecessor programs. For example, the basic data forms in CMS II are the "Company" and the "Contact." Two different versions of the Company form are used to organize data for both a client family at the top level as well as business contacts with which CCP works. Each Company/Family has Contacts, such as parents, children, etc. Roman admits that one of the challenges in adopting Frameworks was that the core product was designed for product-oriented and business-to-business services, not individual clients. Overhauling the Frameworks code throughout the design would have required additional and costly rewrites, not to mention negating one of the original purposes of the rewrite-- to move towards a more stable and supportable design. In light of that, CCP consciously adopted some of the Frameworks terminology when it was inconsequential to the result in CMS II.

The application is still a work in progress. Frameworks lacked several CMS I functions that were important, but made the design less stable. The redesign process forced CCP to prioritize the CMS I functionality into features required immediately versus those they could postpone until a more robust design--"Phase II"--was available in late 2006. "We started with a simple workflow component in Frameworks that was slightly less dynamic than what we had in CMS I," says Roman. "Now we're going to take that back and leapfrog it beyond where CMS I ever was."

CMS II has three main sub-forms: Activities, Links and Opportunity. The Activities form handles calendars, correspondence, phone, meetings, email and tasks, among other functions. The Links form connects to clients' documents: contracts, investment policy statements, meeting agendas and notes, etc. Opportunity includes securities trades, project templates and contracts.

Securities trades and project templates illustrate how the staff uses CMS to control workflow. As the firm's portfolio management clientele grew, it became impractical for Pankros to identify trades in every client portfolio. She wanted to delegate part of that responsibility to other planners or paraplanners while retaining review and approval authority before the trades were made. The Trade form in CMS builds in that security and accountability. Once Pankros approves a transaction, trading manager Judy Noelle enters it into SchwabLink. The financial planner who requested the trade then reviews the post-trade confirmation for accuracy and marks the trade completed in CMS. During each step of the process, CMS notifies the responsible staff person of any pending required activity, and Pankros can monitor the process in her roles as CEO and chief compliance officer.

Project templates automate office workflow and enhance management and tracking. When a client hires the firm, CCP staff set up their financial plan as a project that has 18 steps. Clients' needs determine each plan's analyses and recommendations, but the workflow is essentially the same for all new clients. "The financial planning project template guides the workflow and allows us to assign a task to the appropriate person," Roman says. "Each project consists of tasks. We assign a start date to the project which then populates sequential due dates for the project tasks."

Notes views allow CCP's staff to retrieve and display focused information. Those views have evolved based largely on Pankros's and the staff's recognition of required information for specific functions. The Projects Queued By Date view, for example, lists upcoming projects. This view enhances workflow forecasting, especially when one or more staff members may be out of the office. For example, Stacie Knotek Quigg, one of the firm's financial planners, married and took her honeymoon in November 2007. In mid-summer Pankros and Quigg reviewed Quigg's scheduled workload with the Queued By Date view. That view's data allowed them to determine readily which part of Quigg's work could be rescheduled earlier or later because of her limited availability in November.

"One thing I need to manage the firm is to know who is doing what, when," Pankros says. "That's how the Active Projects By Stage view evolved--we've had that one forever. At first I just had a projects view, but as I added employees, the information I needed from the view changed. That's how we work with PSC Group. We tell them what question we need answered; they then create a view or report for it."

The challenges of developing and maintaining CMS over the years should serve as a caution for advisors who are considering similar efforts. Lauter suggests that wealth managers carefully consider the potential drawbacks of custom development, as well as the benefits. "There are basic economics in custom development, and one of them is that first step is big," he says. "It is a huge commitment on the organization's part to do custom development. Developing software properly takes time and money. Are you prepared to make that investment?"

While Pankros and Roman are pleased with CMS II's current features and planned enhancements, they monitor other CRM programs for possible consideration. Roman occasionally attends training programs for other CRMs to see what they're offering, and Pankros keeps an open mind about returning to a commercial program. In the meantime, they'll continue to enhance CMS as needed.

It seems that technology growth, like practice growth, is a process, not a destination.

Dealing with Developers

Carin Pankros Roman, CFP and president of CCP, Inc. Financial Planning Services offers the following advice to advisors who are considering custom software development.

o Your developers need to know who you and your firm are: values, goals, challenges, work ethic. Do their values and work ethic match yours? Do they listen when you talk about your business? Do they become engaged and ask questions? Do they interview other employees to get a broader sense of your business?

o What is the software developer's experience in financial services? What types of financial service firms do they work with? Have they ever designed a similar system for another financial planning client or is this a brand new concept to them?

o Are they familiar with compliance and regulations that affect our business (if needed for the software design)? Can you work with the prospective developer on smaller projects before you embark upon a major project?

o Is the developer willing to do the work in phases?

o Who will be doing the actual development? Is it the person you're talking to during the planning process? Make sure the "doer" is involved in the planning so he or she can hear directly from you what your needs are and minimize what's lost in translation.

o Is there a plan for the migration of some, all, or no data from the current system?

o Very carefully outline the work, scope and project phases. Have hard copy or email documentation of all work, changes, budgets, time estimates, "guarantees," etc. Don't rely- on verbal agreements.

o Is the budget fixed or capped at a certain amount?

o Who owns the software once the project is completed? Are you entitled to hire someone else to work on it should your relationship with the developer terminate?--EM

Ed McCarthy, CFP is a freelance writer in Pascoag, Rhode Island.

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