HOW DO YOU COMPARE COLLECTION SOFTWARE?

Ranjan Dharmaraja, CEO, Quantrax Corporation Inc.

We have thoughtfully invested in Quantrax and the collection industry for over 30 years. Our vision was to be the leader in collection technology innovation, and as a result, we are always compared with the other systems. To help someone to do that objectively and professionally, without sounding biased or like traditional salespeople is one of the hardest things we are called on to do. With an industry looking for objective answers, we have often been asked to openly share our thoughts on this subject. This article will try to do that. We know how complex the subject is, but we will try to make it simple, objective and informational (and as unbiased as humanly possible).

BACKGROUND

When we talk of collection software, we refer to all of the core technology that runs a collection operation - Your central collection platform (e.g. Finvi, Latitude by Genesys, C & R Software (formerly FICO) or Quantrax) and your integrations with other products like scoring, text messaging, e-mail, dialers, payment processors, consumer-facing portals etc.

HOW COMPANIES EVALUATE COLLECTION SOFTWARE

The most popular methods of evaluating collection software includes issuing an RFI or RFP, followed up with product demonstrations, questions to get more detailed information, reference checking and site visits. Companies will sometimes hire a consultant or company to help with the evaluation and selection process. Unfortunately those consultants are usually not around to make sure that their recommendations result in a successful conversion to the new platform. With experience gained from aging collection platforms, the major changes the industry has seen, and a lack of knowledge to objectively evaluate AI or mobile technology platforms - many consultants are not in a position to provide objective analysis and evaluation services. Companies purchasing new systems have little recourse if there are unexpected delays or major cost overruns. Is this a fair analysis of what really happens? We have talked to hundreds of companies who have either been through a conversion or know someone who has. Long, painful experiences seem to be more common than shorter, successful ones. You may also agree.

What is the conclusion? We need something different from the conventional wisdom, when it comes to evaluating modern collection software.

HOW SHOULD YOU EVALUATE SOFTWARE PLATFORMS?

The following ideas are probably unconventional, but think about their value, benefits and the potential results.

Before anything happens, try to talk to someone you know, who uses the platform you are considering, and would give you objective feedback. If you do not have that contact, ask your prospective vendor for more than a reference list. Or how about a list of their clients in your state?

Set up a "Discovery call." Your prospective vendor needs to understand what you are looking for and you need to understand what they are about. Have about 5 objective and searching questions for the prospective vendor and have your key people on the call. Test the vendor's industry knowledge. It's a warning sign if they are represented by a salesperson or lack important and current information.

As a next step, request an on-line demo of their product. Give them up to an hour and a half. Tell the vendor that on the day of the demo, you will be sending them a list of some key areas you would like to see. Some suggestions - Their Reg-F solution, 2-way text messaging, how e-mailing consumers works from within the system, how you can target and manage cell phones and how non-technical people can create and send account or payment information to your clients in a .csv format via e-mail. 90% of you staff work accounts. Have them show you how accounts are worked and notated. How multiple accounts for the same consumer are displayed and updated depending on different circumstances. After the demo, ask them how they would handle two complex areas that you feel may not be handled by their base product. After 15 minutes, I have had a prospective client tell us that they did not think we were a"good fit" for them. Do the same and walk away if you feel that way about the vendor or their product.

Pay special attention to modern technology like mobile options - e-mail, text messages and chatbots. Are they tightly integrated with your collection software or is additional manual or technical work required to update your accounts? In the perfect scenario, updates would be real-time. Most importantly, is your vendor your first point of contact for questions and problems with 3rd party products (definitely your preferred option)?

Short list one or two vendors for your final selection list. Are you thinking "Where is the RFP"? Typically, RFP's do not ask "How the prospective vendor addresses important areas." Instead, they try to find out "If they do it or not". There is no accountability in this approach and it is arguably of little or no value as fast as your final outcome. After 30 years of computerized collection software every vendor will say they can do whatever you ask of them. They will also claim to have the best product. What are the differences and inaccuracies? It lies in how they do it and not if they do it. Take text messaging - Seeing how the following are accomplished is arguably more important than anything you can get from a conventional RFP. You can repeat this exercise for other important areas.

• How do agents receive and view incoming text messages?
• How are incoming text messages attached to an account and quickly shown to the agent who owns the account (if they are in the office and not out for lunch of course)?
• How do agents send compliant and accurate responses to text messages?
• How does the system ensure that text messages are sent out within the "allowed calling periods" for an account?
• How is consent managed by the system? Is it safe and secure? Do the traditional methods for opting out work? What if a consumer does not respond "STOP" but texts the same response in Spanish, will future text messages be stopped?
• How can the consumer text an image (for example a picture of a cancelled check)? Can the image be instantly viewed by the agent from within the collection software?
• How do your agents view text message history from an account (both sides of a conversation)?

Storing and reviewing backup documentation from clients and consumers is becoming very important. Make sure you have a solution for saving and accessing documents and images pertaining to an individual account.

If you want to use an RFP and it forces a vendor to explain the "how", make sure that they show you their solution on a demo and make the RFP an accountable part of the agreement.

GUARANTEES

Whatever you do, regardless of how many questions you ask and how long you take to understand what you plan to buy, nothing will explain the product and its vendor as well as actually working with the product for a few days. Objectively discuss this with your prospective vendor. With a complex product, a "try before you buy" option may be difficult to set up, but it is not impossible.

Of course, discovering that a product was unintentionally or intentionally misrepresented, or that your final implementation may take 6 months longer due to no fault of yours, is difficult to address if you paid 75% of the purchase price. Consider your options carefully before executing the final agreement and making a non-refundable deposit.

Existing interfaces can be a challenge. What is the plan for converting your new business interfaces and other file transfers (e.g. payments, custom interfaces with clients)? Reasonable, practical and cost-effective solutions must be offered.

Although it should not be a problem for your new vendor, getting your data and file layouts from your present system could be difficult and costly (though that should not be the case). Have you got cost estimates for your data conversion, other technical work (e.g. Interfaces for your letter printing service, dialer, skip-tracing, BK/Deceased scrubs, payment gateway, etc.) and user training? The amount of work needed in a data conversion can easily change. How will cost escalations be handled? A good estimate with limits on the additional charges will certainly protect you. A vendor who is experienced with handling your type of conversion should not have a problem with placing limits on the data conversion and other technical work required (Push for fixed price contracts).

Can we forget overcoming the greatest hurdle for changing software? We can not forget the "M-word", money. You have spent so much for what you have. Well, that's gone, and if you have 30 people, you are probably spending over a million dollars a year on personnel-related expenses. If you could be 20% more efficient, that would save you at least $200k a year. Can technology have such an impact? Yes, as long as you are making a vertical move. You should never spend money to do what you now do on a different system.

The collection industry has changed in the last 15 years. We rely on technology far more than we ever did. Converting to a new system is never easy, but must sometimes be considered. The above ideas may help you to have more control over a very complex process.

WHERE DO YOU SET THE BAR?

This is the difficult part. We are in a time of generational shift. Collection software as most of us know it, has been around for over 30 years. We are used to doing things in a certain way. We are used to the software we use and may have employees who have worked with it for over 20 years. What happens when you find a better solution? You will find many reasons to stay with what you have. The costs of maintaining your system, the custom code, the workarounds, leaving money on the table, the expensive compliance risks - They will keep mounting and could all be addressed with a new car! In this case, new software. It will take an investment, and and a few months of hard work and pain. (We have been converting clients in about 3 months.) When you get to that point, the following may help.

• Set an ambitious but realistic live date. Our first target is usually 2 - 3 months for a company with less than 30 people. It can be done. To convert systems quickly and economically will require a vendor who has deep, practical industry knowledge. Unfortunately this is not what you will find. Talk to some of the vendor's recent conversions.
• You will probably have to negotiate with your current vendor for your data and file layouts. It's your data, but they will probably want a small ransom for it. Knowing that the data conversion could be on the critical path, set an aggressive target to see some converted data on the new system. We typically set that bar at 2 - 3 weeks from the date we get sample files and file layouts.
• Plan to sign off on the complete data conversion at least 2 weeks before the go-live date (A full conversion with all of your accounts).
• Certain items will be required on "Day1." For example, clearing electronic payments, loading certain new business files, posting payments, and making sure your agents are well-trained to work accounts. Make sure these are ready by the go live date. You may be working on it on the last Friday before go-live. That's alright - Don't panic.
• Make sure your vendor understands what you need after go-live and by month-end, and make sure these deliveries can be tested and met.

You may feel that all that is theory and talk. Unfortunately, it is. What does it really take to make a conversion happen by a certain date, and to make sure that you are able to work productively and efficiently on the new system, on Day 1? A lot more than we said above. One of the most important things is a positive and confident attitude. You will need great leadership, sometimes under challenging circumstances.

With the complexity of high end-collections in 2023, a conversion requires superior industry knowledge. Let us assume that you have that. If your vendor does not have a few collection experts on staff, which means individuals who have worked in the industry, managed people and collection systems, it is very unlikely that things will go as well as they should. If you picked a vendor in spite of those concerns, because this was the low-cost option, it is very unlikely that things will go as well as they should. If your vendor did not have features and items that should have been in their product, and offered to build them for you or create workarounds, that will probably cost you a lot more that you thought it would. How can you understand some of this before you make a decision? Take a look at the vendors' recent work. Look at their solution and documentation for Reg-F! Will your vendor invest heavily in base enhancements that are paid for with your support dollars? Request a copy of the release notes for their last major update and make that judgment.

People solve problems, not technology. As the old saying goes, it takes "two hands to clap", and to convert to a new collection platform will require yours and your software vendor's.

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Quantrax Corporation is a technology company that created an intelligent collection platform over 25 years ago. They believe that the ARM industry has been poorly served by collection technology that has not evolved or kept up with the great potential of computing power, or challenging industry changes. Self-funded, Quantrax has continued to successfully develop and deploy technology that offers modern solutions to old problems.

Ranjan can be reached at [email protected]

www.quantrax.com – (301) 657-2084?