Why did Desert Schools quit using formal RFPs? What major tech buys have you completed without them?
Ron Amstutz: There’s a lot of unnecessary work that both the credit union and the perspective vendors must complete with an RFP. We had already replaced our online/mobile banking and audio response systems without RFPs, and that gave us confidence when it came time to convert to a new core.
Ron Amstutz, EVP, Desert Schools FCU
How did you know you were ready to eschew RFPs?
RA: When we realized that sending a document with hundreds of questions and requiring multiple vendors to answer the same questions just didn’t make sense any longer. Even with an RFP, because systems are different, the answers to questions had exceptions and it really wasn’t comparing apples to apples. We felt we were wasting a lot of time when all we really needed were answers to a smaller subset of questions.
Without an RFP, what does your due diligence look like? Does it differ from a formal RFP process?
RA: We invited our final two choices into Phoenix for three-day demonstration sessions with our team. We made multiple site visits to other credit unions running those two systems and met with their leadership teams. We did significantly more due diligence on Corelation to create risk mitigation because we were 10 times larger than any other client running the system at the time.
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What kinds of questions did you ask? How did you document all this?
RA: We knew what our pain points were on the system we had, so we created spreadsheets to list the must-haves, gaps, and game changers we wanted our new system to be able to do for us. We used those spreadsheets to manage the selection process.
Talk more about the spreadsheets.
RA: The must-haves are just what they sound like: the system must have normal operations capabilities for processing deposits, loans, certificates, checking accounts, debit cards, etc.
The gaps were items that we had in the current system or through a third-party that Corelation did not offer at the time of our selection. These were contracted to be developed by Corelation to be ready by the time we converted. Part of our partnership with them was to help advance their new system significantly through our conversion. Two examples were safe deposit box and skip-a-pay functionality.
The game-changers were items we believed would change our business in a significantly positive way and that the system already had or would need to be developed for us by the time we converted. Two examples were relationship pricing and digitizing new account workflow.
Even with an RFP, the answers to questions had exceptions and it wasn’t comparing apples to apples. All we really needed were answers to a smaller subset of questions.
Did you do this on your own?
RA: No. It’s important to have an outside voice to navigate the change. We chose a consultant who had significant industry experience to guide us through the selection and implementation process. He focused on helping us design our future and was not married to a cumbersome process.
Does doing it this way require going out of the comfort zone of using a formal RFP?
RA: Only if you’re tied to the same old regimented process that has been used for years.
What advice or best practices would you offer other credit unions in this regard?
RA: Have a good understanding of what your pain points are with your current system. Document them and define them with the business lines involved. Then, do your research. Read about vendors, ask your peers at other credit unions about their systems and what they like and don’t like.
Find a partner that fits your culture. Create a list of what you dream a system could do and how that would benefit your credit union and make you more efficient and relevant to your members.
Finally, don’t settle on the easy decision. Every decision has risk. The key is to identify the risk and create an acceptable plan to mitigate it.
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