Wesco is a credit union-owned CUSO and an
independent data processor and management solutions firm. The
first part of this article ran on CreditUnions.com the week of August
Goals and the Overall Capability of the Data Processing Vendor
are developed in three major strategic pieces (Data, Business Logic,
and Presentation) and then married to a Network plan that provides
an overall solution for the credit union. Historically, the three
major strategic pieces have been presented as one overall component,
but today's credit union buyer must pay attention to the plans for
each piece of their solution and how it fits with their overall
goals and plans to implement.
What data is needed to successfully complete business between
the member and the credit union? What changes does the credit
union anticipate in their overall data needs in the next few years?
It used to be as simple as a few dates, account numbers, and name
and address fields, but today's databases are becoming more complex
in trying to match the overall business plan of today's credit
union. From MCIF and CRM pointers, to text-based consulting and
competitive marketplace statements, to the increasing needs of
Internet self-service products, today's credit union database
is evolving at a breakneck pace. Today's technology is designed
to use automated databases to carry on full conversations with
employees and members. Identifying your vendor's plan for database
structure, adding new data, and effectively communicating data
to the credit union is key to your next purchase.
Simply put, business logic is the set of formulas, processes,
and specifications that a credit union uses to process data for
a planned outcome. In other words, if you can calculate a member's
dividends with a pencil and calculator, your core data processor
should be just as effective. What are the restrictions of a core
data processor's business logic? What is the timing of key processes?
How does the vendor develop new business logic for new challenges?
How does the vendor define its role in providing credit union
Consider how many ways data can be communicated to today's consumer-through
an employee, on a full office-based network, through a cell phone
with a 12-character screen, through an Internet browser with mind-blowing
graphics, or even through a telephone system. Now imagine the
challenge in trying to develop a central product that can effectively
work with all of these audiences. It's more than just asking the
data processor if its system is in Windows or still based on ''green''
screens. It is about understanding that when a member chooses
a device through which to contact the credit union, he defines
an audience parameter that the vendor and the credit union must
recognize. Each audience or contact point requires a different
management of data and business logic to complete the transaction
(remember your culture or style goals for contact points). How
many audiences does your credit union wish to serve? How does
your credit union manage adding new delivery challenges or audiences
to its overall plan (e.g., wireless)?
the average member, through Internet sites and products such as
Microsoft Word or Excel, now has exposure to technology presented
in an interactive, colorful and communicative way. The bar has
been raised for presentation. What is your credit union's plan,
and more importantly, what is your vendor's plan?
When the big 3 (DBP) of the software solution are known and you
are confident of the vendor's plan, you'll need to round out the
solution by understanding the network. Whereas traditional thinking
rates the need for open systems very high, the concept of broad-based
networking is often overlooked. Broad-based networks consider
more than just the desktop network or the core data processor's
primary audience. The credit union's goal for networking should
be nothing short of understanding how a single desktop can interact
with any other desktop in the world.
needs to plan not for how the credit union creates/connects to
a core data processor hub. The focus should be on how the core
data processor's product fits into a network where databases,
communication, and interaction can be internal to the credit union,
external to the member, or translated fluidly to new business
partners. Today's leaders need to understand that the marginal
gains made by selecting incrementally different core data processing
solutions cannot make up for being left out of cooperative and
collaborative efforts that come from network interaction.
Current (or Next) Data Processing Vendor
Sit down with your management team and ask a few questions. What
is the contractual responsibility of your current data processor
in aiding your transition to your new data processor? What data
files and data content are under contract to be converted? What
is the price for de-conversion? What will be lost? What will need
to be rebuilt?
fail, credit unions continue to sign new data processing contracts
with the expectations of never going through another conversion
ever again. This unfounded optimism is based on the sheer fear of
data processing conversions and an arrogance that the diligence
done in selecting this provider will result in the solution of all
solutions. De-conversions are the black hole of the entire process.
Without knowing what to expect from your old processor, how can
you judge the quality of your conversion and what to expect from
your new processor? In your Technology Strategic Plan, you hopefully
set a strategic goal to be known as an organization that can manage
change. The first goal to managing anything is understanding the
only be entered into if they guarantee that the content of your
database is one hundred percent owned by the credit union. Imagine
buying a paper-based filing system, only to find out when you buy
a new file cabinet that you only get to keep half the sheets of
paper from the old one.
is an Investment . . . Plan for an Investment-Based Return
When choosing a data processing vendor, soliciting a reference for
a new vendor, or planning for a conversion, it is common to hear
comments such as, ''My credit union is with ABC vendor, and
they're the best of a bad lot'' . . . ''Conversions may
be a necessary evil, but only once in a career'' . . . ''It's
not what I want, but it's the best I can do.''
For a very long
time, most credit union professionals would tell you that dealing
with technology vendors is a frustrating and out-of-control process.
Many professionals today believe that only the largest data processing
firms will survive based on the fact that R&D dollars and DP
overhead is just too overwhelming. For all the negative talk, it
is surprising there are not more efforts being made to actually
change the process from the inside out.
article, the concept that the core data processor is but a single
component of an overall technology plan has been repeated again
and again. It seems apparent that credit unions must try to find
a way to have more of a voice in the overall orchestration of these
partners if they are to increase their comfort zone with the entire
process. Data processing at its best is simply the electronic execution
of intellectual processes dictated by doing business. In the case
of the credit union business, credit union leaders need more leadership
in the actual vendor firms with which they do business, having a
voice in the intellectual processes and software.
a data processing vendor, the credit union's Technology Strategic
Plan needs to outline the goals it expects as far as an invested
return with each vendor. Credit unions should no longer settle for
being part of an advisory group, included in ''quality circle''
studies, or just trusting that what is good for the vendor is good
for the marketplace. Credit union leaders need to set higher goals
for participation in these firms, ultimately looking for equity
positions that give them greater insight into managing member services
a Power User
else is said and done, no credit union should make an investment
in a core data processing solution without openly stating their
intention to be craftsmen in utilizing this very important tool.
Egyptians built pyramids without power tools; renaissance artists
created masterpieces without computerized graphic design tools,
and credit unions should understand it is more the implementation
of a tool that leads to member satisfaction than the tool itself.
Goals and plans
for staff education, vendor interaction, and a true ownership of
the concepts that drive a tool will make the difference. No longer
can credit unions rely on budgets just to purchase; they must focus
on the budget and the effort necessary to implement and maintain.
Flip the coin.
Does your data processing vendor set the same goals for you as a
user? What are the vendor's education programs? What are the goals
for determining whether the tool is strong or weak? What procedures
are used to correct flaws and recognize opportunities? It all comes
down to business, not tools. Your data processing vendor needs to
be an extension of your staff, committed to execution, not just
Maybe the number
one challenge to selecting a data processing vendor for a complex
technical credit union is understanding the window of opportunity.
Managing vendor contracts, windows for conversions, and overlapping
accounting issues needs to be a constant process.
In the end it's
not about technology at all. Competitive advantages gained through
technology are fleeting. By the time you implement the newest technology,
your competition has copied, modified, or maybe even improved on
your process. But selecting business partners to help meet your
goals, develop your tactics, and effectively focus on your execution,
can mean the difference between success and failure. Bottom line,
the magic in technology often lends itself best to gadgets, but
your credit union needs a plan, a focus that says the member comes
first and all your partners understand your direction.
Randy Karnes is the CEO of WESCO. WESCO is a credit union-owned
CUSO and an independent data processor and management solutions
firm. WESCO was named 2000 Operational Services CUSO of the Year
by NACUSO and is a strong advocate of credit union ownership of
alternative service and financial organizations. For more information,
Randy Karnes, CEO
(800) 327-3478 ext 101