ATLANTA -
At hand for this edition: some information technology (IT) budgets are stretched thin, whereas others are bountiful. No matter what the budget looks like, credit union IT managers have one thing in common-they all have strategies that help save money and hone operations.
1) Virtualize It. CUs are cutting down on computer servers by consolidating the contents of many servers into just one or two. Simply put, that's "virtualization." With virtualization, a CU can buy and maintain fewer servers and pay less to run and cool the lot. Delta Community, Baxter, Consumers, Vermont State Employees and Desert Schools Federal are among the many CUs going virtual.
Delta Community here will save "tens of thousands of dollars in server hardware alone over the next three years," predicted Bill Mesplay, CIO at the $2.5-billion CU. Beyond additional savings in cooling and power, virtualization will require "reduced resources to manage the machines in production, staging, test and hot site environments."
And Consumers will save the equivalent of one full-time employee, thanks to a virtualization project, according to Scott Sylvester, vice president, technology, at the $218-million CU in Oshtemo, Mich.
The $3.1-billion Desert Schools in Phoenix told Credit Union Journal last year that virtual software saved more than $100,000 in less than one year in new hardware, maintenance, heating, cooling and storage space.
2) Leave Systems Integration to the Vendors. "We are trying to avoid developing custom connectors where possible by encouraging our business partners to talk to each other and perform their own integration"-at a savings of hundreds of thousands of dollars per year, said Jim Block, IT program manager at Baxter CU in Vernon Hills, Ill.
When vendors perform an integration, all clients benefit from the reduction in build and maintenance costs, he said.
"Where we can't avoid building the integration ourselves, we try to share our development investments with our business partners and other credit unions," Block added.
3) Help Your Colleagues Help Themselves. Business teams need more self-service tools in order for the organization to run smoothly, Block continued.
"We're deploying applications that will let the business self-service requests that typically would have gone to information services for fulfillment," Block said. As a result, business units at the $1.25-billion CU can perform their own data analytics, process modeling, knowledgebase management and loan document generation.
"Hopefully, when the business unit creates a report or system-generated letter or new process with little involvement from information systems, less will get lost in the translation and the project will be executed at a lower cost," said Block.
4) Move it Online. Members can pay bills online, view statements online, apply for loans online, even deposit checks online, all at a savings to the CU.
At Cascade Community FCU in Roseburg, Ore., members can also vote for the Board of Directors online, according to Dale Debs, IT director. The Board a the $102-million CU this year moved from mailing their ballots to logging-in to homebanking for an online ballot. Annual savings: more than $10,000 per year, said Debs. Members can also vote by phone.
5) Negotiate and Renegotiate the Sale. Susan Phillips at People First FCU lives by the idea that list price for any technology may not be the best price.
"I have found that most vendors will negotiate a lower price in order to earn our business," said the CIO at $260-million People First. "When negotiating contracts for new products and services we always use our budget as a negotiating tool to keep costs down."
The same goes for telecommunication contracts, Phillips continued. "By signing on for multi-year contracts, you receive a considerable monthly discount. If you don't pay attention to your contracts, they will put you into the month-to-month price on your expiration date-and that can really escalate your costs."
To put the screws on a deal, Phillips always gets a quote from a competing vendor. "I rarely end up switching vendors, but I do use the competing quotes to obtain the best price from our current provider."
6) Develop the Relationship Between IT and Accounting. "Between IT and Accounting, there are a lot of redundant tasks-such as ACH processing, sharedraft processing and GL recon," said Sylvester, at Consumers CU. "If you have a cross-training relationship between IT and accounting, so that either can perform these tasks when necessary, it makes you a much more efficient and well-run ship."
7) The Opposite of Saving. "I may be one of the lucky ones, but our IT budget for 2008 is not really focused much at all on cost-cutting," said Brad Sears, CIO at Grow Financial FCU in Tampa, Fla.
Instead, after a lean 2007, the $1.8-billion CU will focus in large part on making money.
"We feel we can have a bigger impact on the bottom line by generating more business," Sears explained. "We are looking at better cross-selling methods through enhanced loan origination, new membership application and relationship management software."
more
Read more about the strategies here as well as other "7 in '07" ideas at cujournal.com and search the following bolded terms in the archive:
* Growth By the Numbers
* How One CU Gets Two Servers For
* The Price Of One
* CUs Feel MBLs Are Shackled By
* Core System Limitations
For info on this story:
* www.bcu.org
* www.cascadecu.org
* www.consumerscu.org
* www.deltacommunitycu.com
* www.desertschools.org
* www.growfinancial.org
* www.peoplefirstcu.org
