When CreditUnions.com profiled Northwest Federal Credit Union ($2.6B, Herndon, VA) in January 2013, the institution was in the midst of a massive core conversion it projected would span 18 months, cost millions of dollars, and occupy nearly 70 employees in a temporary, part-time, or full-time capacity.
This fall — in a testament to the value of aggressive project management — the credit union hit its Nov. 4 go live date. Kristin Shultz, a certified program management professional and the
vice president of operations and business intelligence at Northwest, was the driving force behind this project. Here, she shares how a holistic planning process helped the credit union hedge risk, provides best practices for implementation, and highlights the benefits of the core conversion.
You’ve passed a number of strategic benchmarks in your core conversion since our last discussion. What is the status of this project today?
Kristin Shultz: On Nov. 4, 2013, we officially went live on the new system. When we picked that date back in 2012, we knew there was no going back on it. So January through November of this year was almost entirely devoted to preparation to hit that deadline.
Planning was the key to meeting our deadlines. I believe in the project management philosophy and, as a credit union, we find those practices work in nearly every part of the organization — not just for our technology projects. Basically, we believe the more time you spend planning something, the more success you will achieve.
The actual conversion went as expected and it was almost a non-event, which was the goal. It was the ancillary systems — such as online and mobile banking, online account opening, ATMs, and debit cards — attached to the core that took the most time and effort from our team.
Were you looking at any type of phased introduction for different parts of the new system or was the idea that everything had to go live on Nov. 4?
KS: Everything member facing went live on Nov. 4. We wanted all of the change for our members to happen at one time rather than them constantly having new things to adjust to.
But we do have some additional back-office systems we’ll be installing in phases moving forward. For example, we have a data warehouse and some other products going in over the first and second quarters of 2014, and we’ll also have a new CRM system in about nine months.
We wanted to give ourselves some time on this new core before implementing some of these larger adds on — the idea is that we’ll be smarter and able to integrate things more efficiently if we wait than if were to try and do everything right now.
What went as planned during the actual conversion weekend? Was there anything that didn’t?
KS: We had a detailed implementation plan that originally lived in Microsoft Project. Later in the planning process we migrated it to Excel so all users could access it and add to it as necessary. Everything that needed to occur over conversion weekend was in that document, with different tabs for different systems.
Our conversion weekend was literally scheduled down to the minute, with set times for things such as executing lending reports, posting dividends, producing statements, and getting files ready for Symitar.
We gave ourselves three days to get the conversion done, which is a day longer than a typical conversion. That allowed us room so if something went off track, then we’d have time to correct it.
We ended up bringing up our debit and ATM network a full 24 hours ahead of schedule and we also brought up our member-facings systems such as online banking, mobile banking, online account opening, and online loan opening 15 hours ahead of schedule.
How did you address and plan for the people side of the equation as well as the technology side?
KS:Prior to the conversion, we had two integrated test weeks where we practiced and fine-tuned our plan and everyone played the part they would actually do over the conversion weekend. We found lots of little things we needed to change and things we overlooked in the initial planning phase, such as setting off the alarm when we entered the building on a weekend. We also had to make sure we could get into our vault and count our cash on a non-business day.
During the actual conversion weekend, every employee participatedin some way, even if it meant just coming in and logging on to make sure they could get into the system and wouldn’t have any issues Monday morning. We also had all of our branch teams go to our facilities on Sunday, load their cash, get their drawers set up, and test their equipment one final time to make sure there wouldn’t be any hardware issue when they opened their doors. This also allowed them one last time to practice on the system without members standing in front on them.
All of our back office folks were here practicing things like transactions, posting mail, and doing preauthorized transfers. When we left that Sunday evening, the system was set for Monday’s date and ready to start business that next morning.
Through the use of our planning software, we made sure we didn’t have any one person or unit over allocated. This was especially important for our IT team, who worked through the night the evening of October 31 deconverting our former core data to get ready to give to Symitar.
You can’t have people working all night and all day, it’s just not effective. So most of the team worked days, and they were long days, but we were still out by 8 p.m.
What were some of the best practices you uncovered while integrating your many third-party systems? Will you be adding additional capabilities to that lineup in the future?
Online banking was one of our biggest ancillary projects. It had the largest amount of members using it and it really needed to work the first time. We started the process of integrating all our third-party systems a year ago, but we also had all these vendors on call for conversion weekend — they were mainly doing things like converting our data and setting up test sites before going live.
We haven’t purchased any additional systems yet because we got everything our new core provider, Symitar, had available. However, we did boost our network infrastructure and made sure we had the appropriate hardware, networks, and firewalls in place so these systems could function as efficiently as possible.
In the future, we’re definitely learning toward acquiring more business intelligence and analytics systems, and we’ve already started this process with the new data warehouse we purchased. This will give us the capability to understand the behavior of our members and be able to market to them in a more effective way than in the past.
A lot of what is being stored is our own data, but in our previous system we didn’t have the mechanisms to capture that information in an easily exportable way. We ultimately want to build a database that has one version of the truth, where you’re looking at the data, you know it’s right, and every piece of information you need is in one spot, not spread across 15 different systems.
What was your strategy for educating members on the core conversion process and the benefits they would receive from the new system?
KS: Our goal was to keep it as low-key as possible, so we did not advertise that we were converting to a new core but we did advise members we would be doing some system maintenance. Because the systems the members were using weren’t changing significantly aside from some small things like the account number structure, there was very little education up front.
Now that we’re live, marketing has plans to emphasize and promote all the great features of the new system over the next month. This includes a new telephone banking system with voice recognition as well as the fact that we’re now paperless in the branch network, which allows our employees more time to get to know the member and serve them better.
What is your ongoing strategy as far as employee training and development?
KS:Training our team was one of the most important things we needed to do to have a successful conversion, so we spent a lot of time on that. Our training plan began a year ago and has been fast and furious over the past six months or so. The strategy we used was a train the trainer approach, so we pulled the best and the brightest from our member-facing network to be trained as subject matter experts (SMEs). The vendor taught them everything there was to learn about the software, and then those SMEs in turn trained the entire credit union on the system.
These employees are now located throughout our branch network, so every branch has at least one. We tested all of our employees so we could find out if the SME training was effective or if there were areas we would need to address more thoroughly.
Our back-office departments received special training from their counterparts at Symitar during our integrated test weeks. The check folks had access to an operations specialist and the card folks had a card specialist and so, by the time we went live, those employees were comfortable with how their part of the system worked. We also have a software development team that has been trained on the new system that will work to develop new solutions for us moving forward.
Northwest initially projected a 10-15% savings in personnel costs as a result of the new system. When and how will these and other efficiencies be realized?
KS: The personnel changes will happen over the next few months as we get deeper into our systems and can reallocate people. From a processing point of view, there’s been an instant improvement. For example, our loan servicing department previously had to hand post every payment coming in; now that’s automated. What would have typically taken one person five to six hours on the first day of every month now takes a few minutes.
We also had a ton of manual posting going on in our general ledger. Our prior core couldn’t produce an output to download into that, so it was all done by hand in spreadsheets. It normally took one person all day, every day to accomplish that on the old system. After conversion weekend, this process takes less than five minutes.
This means we can reallocate those employee resources on new things like cost accounting and analysis, which the department never had the time or resources to pursue before.