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This sponsored content article is provided to the credit union community for shared insights and knowledge from a recognized solutions provider in the industry. Please note that the views and opinions offered here do not reflect those of Callahan & Associates, and Callahan does not endorse vendors or the solutions they offer.

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March 17, 2003

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7/26/2012 04:01 PM

Many of Randy's comments are on point, particularly his comment, "I believe that success with technology implementation is not simply selecting a better tool, but requires choosing the right business partner." But Randy reveals his true feelings by not pluralizing “partner”. Like other core system vendors, including most that advertise open systems, they genuinely believe they are the only business partner a credit union should have when it comes to technology. This is adverse to the best interests of their clients. Like a family doctor, can a core system vendor supply all of a credit union’s needs? You probably wouldn’t want your family doctor to do your heart, brain or eye surgery. And while you might value your family doctor’s opinion and referral, you probably want the right to pick your specialist, and be free to discuss any treatment directly with that specialist. After all, isn’t the specialist the one you’re counting on to treat your condition, and who you need to depend on, as long as you have the condition? In building a relationship directly with the specialist, you gain a new partner in managing your health. Should that be any different when acquiring or applying technology in your credit union? Randy also writes, “Too much emphasis has been placed on core data processing systems being open." If a core system is not open, how can a credit union choose the best partner and solution to fulfill a given need? A “truly” open system prevents a credit union from being limited in choice or held hostage by their core system vendor. What makes a system truly open? Simple: a published document of the vendor-supported transaction formats and communication protocols for data exchange. Such a document reveals no source code or database layouts, and no vendor secrets except those a CU client should know. A withdrawal is a withdrawal; every core system vendor needs the same information to process any given transaction (account number; amount; etc.), so transaction formats certainly aren’t trade secrets. However, if a core system does not support an external transaction to obtain or update specific data, or certain communications protocols are not supported, the only secrets revealed are the core system’s deficiencies. System vendors who honestly believe their clients should be ‘empowered’ to select the best business partner and solution don’t hesitate to provide clients with their data exchange/interface specification. They’re confident of the soundness of their systems to reject any improperly formatted transactions, and they acknowledge there’s nothing magical about interfaces. So why don’t open core system vendors adopt truly open systems? It’s more about revenue and client control than hiding any trade secrets. Would you use your family doctor if he did not provide arms-length referrals? Or insisted you use one of his “authorized” or “certified” specialists, or pay an exorbitant fee if you wanted to use your own? What if he wanted to sell you some specialist’s work product, and insisted on supplying all post-operative support, denying you a direct partnership with the specialist? You’d probably seek a new family doctor immediately. Yet that is the way most credit union technology products are sold today, even by ‘open’ system vendors. Vendors’ business partners are exactly that; their business partners first, and yours only second, if at all. It may be an easy solution, but is it the best one for your credit union? In this increasingly flexible and complex technical world, can the core system vendor/family doctor help you implement and utilize a third party solution to the fullest? What do you lose by not having a direct contractual partner relationship with the underlying solution provider? Only control, dollars, and s

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