How to Buy Technology: Selecting the Right Tool or the Best Partner?

The promise of technology is what lures credit unions: they want technology to make them more competitive, not merely efficient. Find out why Randy Karnes believes that success with technology implementation is not simply selecting a better tool, but requires choosing the right business partner.


Investing in technology is becoming a more critical management process for every credit union. The total dollars being committed to LANS, WANS, automated call centers, kiosks, Internet solutions, not to mention data process capabilities, are rising every year.

The critical issue, however, is more than dollars. For the promise of technology is what lures credit unions: faster cycle times, automated decision tools, more efficient processes and the nirvana of the self-serviced virtual member. Credit unions want technology to make them more competitive, not merely efficient.

Very often the assessment I hear is that technology's promise is rarely realized. A new solution just enhances older functions but does not deliver the hoped for breakthrough. I believe that success with technology implementation is not simply selecting a better tool, but requires choosing the right business partner. 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.

It All Starts with a Plan
First thing, pull out your strategic and tactical plan called ''Maximizing Technology in Our Credit Union.'' When you don't find it, the next thing to do is spend some time developing a technology plan for your credit union that is specific to your goals, your resources, and your credit union's ability to adapt to change. Without a doubt, most credit unions fumble through core data processing changes without any real long-term plan or thoughts on how these factors play in short-term decisions. Consider the following outline:

  • Follow your credit union's Technology Strategic and Tactical Plan.
  • Evaluate a core processor's role in the credit union's overall technology investment.
  • Evaluate your ''DBPN'' goals and weigh the overall capability of the data processing vendor.
  • Understand the process for leaving your current data processing vendor.
  • Understand that vendor patronage is an investment, and plan for an investment-based return.
  • Set a goal for being a power user.

Your Credit Union's Technology Strategic and Tactical Plan
Historically, credit unions have allowed core data processing decisions to dominate their total investment in technology. But over the last several years, developments in telephone systems, the Internet, and additional office technology offered through PCs and laptops have begun competing for investment dollars and project priorities. Competing technologies have created conflicts over the capabilities of additional investments versus the ability of core processors to interact with these technologies so that the overall technology plan of the credit union can be maximized or realized.

Overlapping vendor contracts and accounting for these expenses have locked credit unions into relationships where a change to a coordinated long-term plan sometimes seems impossible. It all has to start with a plan. Credit unions today need to sit down and review the following set of issues before moving forward with any decision or trying to adjust their overall technology capabilities:

  • What are the credit union's goals for how the membership, staff, and overall organization perceives the credit union's technical capabilities for providing credit union services?
  • What is the credit union's ability to acquire, develop, and manage technical resources based on its technology goals?
  • What is the credit union's ability to manage its marketplace image, educate members, educate staff, and implement overall change?

One valuable point to consider when developing your Technology Plan: Acquire an ''insider's'' perspective for technology. To be a good consumer of technology, an organization must have some insight into what it means to be a provider of technology. When looking to understand whether a contract is fair or not, it is best to consider both sides of that contract. Look for vendors or consultants who have insight into development processes, ongoing support, and problem resolution. Simple RFPs that look for a myriad of yes/no answers as to feature functionality, and reference lists on who uses what vendor, are not specific enough for your credit union's technology plan.

A Core Processor's Role In The Overall Technology Investment
The key to credit union management today is managing member relationships and member trust. Nothing can be more disruptive to those concepts than misinterpreting how the technology choices a credit union makes change the interactive contact points between the member and the credit union. Credit unions must determine a style or culture (part of the Technology Strategic Plan) for these member contact points that defines their organization's presence and ability to serve, and then consistently buy based on reinforcing that positive presence.

Historically, core data processors have played more of a ''back office'' role or a partner tool with employee staff in servicing members. Today, core data processors are more key to direct member services through interaction with call centers, third-party networks, and direct Internet services. As much as the capabilities of the system to calculate dividends, provide balances to employees, and effectively present credit union financials, today's core data processor must have a vision of how its services blend with other credit union tools and set the direction for further technology investment. As a buyer, today's credit union must consider the core data processor's ability or plans for an overall efficient credit union operation.

Too much emphasis has been placed on core data processing systems being ''open'' or easily translated to common networks, downplaying the actual desire or direction of the vendor's business plan as to interacting with other credit union technologies. It is not the technical ability of the software to adapt to new challenges, but rather the ability of the vendor's business structure and internal goals. Too often, vendors create artificial barriers to change or effective partnership by inflexible conversion/de-conversion processes, restrictive contracts, and limited capabilities for managing change from the vendor's side. Vendors are driven by new sales and supporting current clients, and often have put very little thought into processes where their current clients wish to change or accommodate new challenges. Credit unions must look for vendors who understand their role as an overall partner, a technical consultant, operational specialist, and manager of effective transition.

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, please contact:
Randy Karnes, CEO
(800) 327-3478 ext 101

The second part of this article will appear in the September issue of Callahan's Credit Union Report. To obtain a complimentary copy of the September issue, please email Jessica Traini at



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Aug. 27, 2001


  • Very interesting and complete.
  • Brilliant, and well and thought out - one vote for me