srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

Presented by: Ben Mrva Executive Vice President

June 24, 2016 1 6/22/2016

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

2 6/22/2016

That’s Going to Leave a Mark: The most expensive vendor

management mistakes and 7 ways to make your Credit Union better

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

3 6/22/2016

Why you should care….

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

Who will be here in 5 years?

4 6/22/2016

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

Your Vendors are Winning

5 6/22/2016

Net Revenue ($M) 2011 2012 2013 2014 2015 5 YR

Vend A $9,188 $10,421 $11,778 $12,702 $13,880 51% Vend B $6,717 $7,391 $8,312 $9,441 $9,667 44% Vend C $4,289 $4,436 $4,814 $5,066 $5,254 22% Vend D $967 $1,027 $1,129 $1,173 $1,256 30% Vend D $1,622 $1,863 $2,108 $2,577 $3,160 95%

Net Income ($M) 2011 2012 2013 2014 2015 5 YR

Vend A $3,528 $4,203 $4,980 $5,721 $6,438 82% Vend B $1,906 $2,759 $3,116 $3,617 $3,808 100% Vend C $472 $611 $648 $754 $712 51% Vend D $137 $155 $177 $187 $211 54% Vend E $630 $742 $860 $1,007 $1,178 87%

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

6 6/22/2016

What we are seeing and the steps you can take

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

7 6/22/2016

1. Manage Term and Notification Dates

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

8 6/22/2016

1. Manage Term and Notification Dates

• Utilize contract management tools – internal or 3rd party • Active, not passive tools

• Limit auto-renew to 12 months • Notify vendors of non-renewal

Call to Action

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

9 6/22/2016

1. Manage Term and Notification Dates

• Utilize contract management tools – internal or 3rd party • Limit auto-renew to 12 months • Notify vendors

• More flexibility • Avoids surprises • Keeps vendors in check

Desired Outcome

Call to Action

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

10 6/22/2016

2. Bid out every contract

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

11 6/22/2016

2. Bid out every contract

• Bid out all vendor contracts – especially critical vendors • Start the process 18 to 24 months from termination date • Include alternate vendors – do your research • Solicit multi-year options

Call to Action

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

12 6/22/2016

2. Bid out every contract

• Bid out all vendor contracts – especially critical vendors • Start the process 18 to 24 months from termination date • Include alternate vendors – do your research • Solicit multi-year options

• Drives towards market pricing • Improves awareness of new technologies and services • Prevents performance drag from bad contracts

Desired Outcome

Call to Action

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

13 6/22/2016

3. Consider other vendors

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

14 6/22/2016

3. Consider other vendors

• Be open to alternate vendor proposals • Beware of the partner premium • Communicate to incumbent your willingness to move

Call to Action

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

15 6/22/2016

3. Consider other vendors

• Be open to alternate vendor proposals • Beware of the partner premium • Communicate to incumbent your willingness to move

• Drives towards market pricing • Improves awareness of new technologies and services • Avoids the partnership complacency • Keeps incumbents in check

Desired Outcome

Call to Action

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

16 6/22/2016

4. Negotiate de-conversion costs

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

17 6/22/2016

4. Negotiate de-conversion costs

• Address costs up front during contract negotiations • Negotiate and cap fees • Consider your long term strategies

Call to Action

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

18 6/22/2016

4. Negotiate de-conversion costs

• Address costs up front during contract negotiations • Negotiate and cap fees • Consider your long term strategies

• Eliminate surprises • Minimize exposure • Allows for flexibility

Desired Outcome

Call to Action

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

19 6/22/2016

5. Factor in your growth

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

20 6/22/2016

5. Factor in your growth

• Take the time to plan • Design contract pricing to account for scale

Call to Action

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

21 6/22/2016

5. Factor in your growth

• Take the time to plan • Design contract pricing to account for scale

• Take advantage of economies of scale • Reduce risk of poor performance

Desired Outcome

Call to Action

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

22 6/22/2016

6. Manage the “business” relationship

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

23 6/22/2016

6. Manage the “business” relationship

• Set appropriate policies • Eliminate emotion • Be open to options • Consider the alternatives

Call to Action

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

24 6/22/2016

6. Manage the “business” relationship

• Set appropriate policies • Eliminate emotion • Be open to options • Consider the alternatives

• Avoid the “partner” premium • Stay ahead of market technology and pricing

Desired Outcome

Call to Action

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

25 6/22/2016

7. Validate Vendor Pricing

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

26 6/22/2016

7. Validate Vendor Pricing

• Dictate the pricing model • Beware the unsolicited proposal • Research your options • Find a resource to help

Call to Action

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

27 6/22/2016

7. Validate Vendor Pricing

• Enable “apples to apples” comparisons • Avoid surprises • Identify new incentives • Insure market pricing • Level the playing field

• Dictate the pricing model • Beware the unsolicited proposal • Research your options • Find a resource to help

Desired Outcome

Call to Action

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

28 6/22/2016

1. Manage term and notification dates 2. Bid out every contract 3. Consider other vendors 4. Negotiate de-conversion costs 5. Factor in your growth 6. Manage the “business” relationship 7. Validate vendor pricing

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

29 6/22/2016

Questions?

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

srmcorp.com | 800.748.2577 | Confidential and proprietary. Not to be copied or distributed without approval from Strategic Resource Management, Inc.

Thank You!

30 6/22/2016

Ben Mrva Executive Vice President