Bigger Is Safer, But...

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There's an old saying in the computer business: Nobody ever got fired for buying IBM. Does that mean that IBM always offers the best solution? Hardly. IBM has some great technology, but no company is always the best choice for every situation. The truth is, the "IBM" in that statement could easily be replaced by any major name-brand technology provider.

This statement really has nothing to do with who provides the best solution. It's all about who provides the SAFEST solution. In other words, buying big doesn't necessarily guarantee success. It only guarantees you a plausible excuse if the project isn't quite the success everyone had hoped for. After all, how can you be faulted for making the same decision that so many of your peers have made?

The only problem is that deploying technology isn't about making excuses for a failed project. It's about making decisions that will ensure the greatest possible level of success for the project. In today's marketplace, good enough isn't. Every technology decision can't be a home run, but that should be a goal.

The alternative is going with a lesser-known company. That, of course, comes with its own risks. Risks, yes, but history has shown us that when it comes to technology, it's the smaller companies that are often the innovators.

It was about 23 years ago that IBM set out to create a desktop computer for business users. Until then, desktop computers based on the relatively new microprocessor were largely the realm of hobbyists. At the time, the two best-known names in that realm were Digital Research and Microsoft-Digital Research for its CP/M operating system, and Microsoft for its BASIC compiler. So IBM's original plan was to license CP/M from Digital Research, and the BASIC compiler from Microsoft.

In a missed appointment that changed history, Digital Research founder Gary Kildall failed to show up for his appointment with IBM. So when the IBM'ers got to Seattle to visit with Bill Gates and Paul Allen, they asked about the possibility of Microsoft also providing an operating system. Since an operating system and a BASIC compiler were the two critical pieces of software that IBM needed for its PC, IBM essentially bet the entire future of the PC on the fledgling Microsoft. And the rest, as they say, is history.

So how can a credit union balance big and safe against small and risky? The answer is simply stated, yet carried out with some degree of difficulty. It all comes down to due diligence, and that means thoroughly investigating all your options. That includes taking a look at companies that may not yet be household names.

Big and safe is unquestionably tempting. Small and risky is...well, risky. But I'm not talking about blind risk. I'm talking about educated risk. American business was built on the backs of men and women willing to take an educated risk. And as I said earlier, it's the smaller technology companies that are historically the innovators-and that's no accident.

First of all, a smaller company is more nimble. Technology changes quickly, and smaller companies are better able to adapt to those changes.

Smaller companies are also hungrier. They can't rest on their laurels because they have few laurels on which to rest. Their eagerness to attract and retain business works to your advantage. One unhappy customer out of 10 or 20 is a big deal. Ten or 20 unhappy customers out of several hundred, or even several thousand, is-in the minds of most larger companies-inevitable.

Perhaps most important of all is that the smaller technology company doesn't have a lot vested in what's already been done. The bigger a technology company gets, the more it's forced to balance innovation against continuity. In other words, it wouldn't make good business sense for a large tech company to come up with something so innovative that it makes its previous products obsolete. The larger company has a great stake in technology evolution, whereas there's little if anything holding a smaller company back from engaging in a revolution.

In a perfect world, all of your technology options would be laid out before you, where you could objectively evaluate each of them. Of course, we all work in the real world. And in this real world, there's often a huge gap between your credit union and the smaller technology companies. That gap stems from the fact that, while these smaller companies put tremendous effort into creating great technology, they typically don't have the resources to devote to marketing. It's marketing that creates awareness, and in its absence, the word just doesn't get out to the extent that the technology often deserves.

That brings us back to due diligence. It's easy to find out about the big companies. Chances are you've seen their ads, received direct-mail pieces from them and talked to their sales representatives at tradeshows. But for better or worse, real due diligence means that you may need to track down some of the small-company alternatives on your own.

Ask around. Some of your peers probably already know about technology's best-kept secrets. Scour the Internet. Do your homework.

Naturally, sometimes the big-company solution will be the best solution. Other times, it won't. I'm not trying to push you one way or the other. However, with technology decisions becoming more and more critical to your credit union's success, I am pushing you to seriously explore all your options.

John San Filippo is the former marketing director for data processor Symitar and is the founder of The Financial Technology Alliance (

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