Working With Partners to Gain Competitive Advantage
The official 21st Century is here, and after all the forgotten
hoopla of Y2K, businesses are now really focused on what will give
them long-term competitive advantages in this new century. It is
an Internet world. It is easier than ever to find new partners and
new solutions, and opportunity seems to be everywhere. But has anything
really changed? In most cases, credit union organizations, including
CUSOs, continue to be too independently focused for their market
influence, their ability to muster resources, and to take short-term
strategies and make them long-term competitive advantages. Our organization
is faced with the same challenges that credit unions will see over
the next ten years-finding a way to influence the marketplace and
prosper effectively based on our scale in comparison to our competition.
Like those credit unions, we need to find a strategy that gives
us long-term advantage.
The major concept our firm will focus on the next several years
is leveraging and taking full benefit from the new business models
of "Network Communities." Network communities could be
viewed as a simple extension for business modeling based on the
technology concepts of the Internet. But they can be much more.
In WESCO's case, credit union network communities are based on the
power of the philosophies of the credit union industry, the diversity
of credit union organizations, and the foundation of interactive
and credit union-led technologies.
Credit union network communities must focus on how technology unites
the networked organizations for the overall health of the community.
To be successful, they need to be governed as much by the rules
of the community as they are by the potential of technology. The
organizations as a group must view building new marketplaces as
being as important as new technical tools. They interactively combine
consumers, solution providers, technology, and the culture of cooperation
to create a fertile development landscape for ideas.
Independently, both words network and community
have common everyday meanings to business people, and by layering
the concepts, it is much easier to see the power of combining the
two. Credit unions have been long-term advocates for cooperatively
sharing and interacting with their networked counterparts. From
business conferences and trade organizations, to simply keeping
in contact with their favorite business partners, credit union leaders
know the power of managing effective networking. But credit unions
have not spent much time trying to marry business networking with
organized and interactive communication standards, databases and
their definitions, and business logic that allows commerce to easily
flow through everyday processes and reporting. Adding a common technology
network to the power of credit union cooperation can take a simple
idea that must be executed one set of business rules at a time per
organization, and turn it into a wave of activity based on a common
To be powerful, we must harness and understand the concept of communities.
The dictionary defines a community as, "a society of
people having common rights and privileges, or common interest,
civil, political, etc., or living under the same laws and regulations."
In other words, a network community may be as small as single office
or as large as an entire industry. Consider today's credit union
marketplace. The majority of our community is still independent
organizations with asset structures that may be too small (and the
benchmark for small is changing every day) to effectively compete
in the long term. They struggle with resources, policies and business
solutions that are far too independent and require too much replication
of work to capitalize on new ideas. Finding scale or the opportunities
based on scale is becoming more and more the focus of every credit
union leader. Network communities give credit union leaders the
immediate benefits that come from scale. Once again, it is much
more than technology. It is focusing the power of business cooperation
and technology on the long-term development of the community's business
As a data processor, WESCO's focus is to understand that our technology
tools and the technical network that we provide as a foundation
for the WESCO client community, are not the end-all. WESCO must
focus on being a community player. Much like a committee member
on a U.S. city's business development council, it needs to be concerned
with building new marketplace opportunities, gaining access to existing
opportunities, and leveraging the scale for the entire community.
The power of technology is not to build gadgets and quick hit tools
that will sell immediately upon presenting them to clients. The
power of technology is harvesting the efficiencies of long-term
strategies and effective processes that allow other community players
For example, a data processor might see a need to write an accounting
and servicing platform to coordinate loan participations for a credit
union. An effective business planner for a network community might
set a larger goal of creating new models for infusing income into
the community. One is a simple process based on debits and credits
and the tracking of a loan database; the other demands that you
build a loan participation marketplace. Independently, each credit
union that chooses to participate will need the technology of the
accounting platform, but collectively, it's far more important that
they create the opportunity for all the players just to participate.
Ultimately it comes down to the coordination and the focus of all
the members of the network community.
As you try to absorb all of the above, you might conclude that
this is simply a model by which a data processor is trying to gain
advantage by being the center of its clients' overall business focus.
WESCO believes that you are selling the concept far too short if
you think that there is no need for credit unions today to find
new models for operation that combine the needs of their members
with solutions that they can control, help develop, and gain a new
voice along with scale.
Consider a hundred organizations that have a technology platform
that addresses each user and workstation as effectively as the Post
Office addresses the credit union's office, and that uses ASP concepts
for communications as effectively as a public phone network. Add
a set of technology managers who are as focused on the continuity
and consistency of the network as they are on the core processing
tools. Then add a model where the participants in this technology
community understand an interactive set of business processes and
preset exchanges between their potential credit union partners.
On top of this, layer a set of community developers who are constantly
focused on the issues of the day and building solutions that are
both profitable and effectively initiated by its community members.
All this together is WESCO's concept of an effective networked credit
There are alternatives to the concepts of an organized network
community. They have been around for a long time and have been very
effective for many organizations in the credit union marketplace.
They include independent for-profit solution vendors interacting
with independent credit union organizations struggling with coordinating
and developing technology interfaces. Over the last several years,
there has been some improvement, but over all, it seems to fall
short for many credit unions. As an alternative, network communities
require more shared equity between the community participants-an
equity based on not only owning the resources, but acting as a community
citizen and force.
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