One CU's IT Challenges In Handling Merger

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iQ Credit Union's first merger is a game of dodgeball.

The balls were thrown fast and furious at Vice President of Information Technology Jim Morrell: There was no time to project merger costs, and Morrell was in a standoff with the ATM and VISA networks over NCUA merger documentation.

But it's more than a game. Within a three-month timeframe, Morrell was charged with uniting $290-million iQ with $25-million City Employees of Clark County FCU.

"The ATM and VISA networks don't move forward until they obtain certain documents," said Morrell. "We needed to start configuring the networks in early March, but we didn't have the Articles of Merger or Certification of Completion of Merger until late March."

In addition, the networks demanded to see the NCUA Certification Letter issued to iQ. Such a thing doesn't exist, according to Morrell's research.

'Waiting Not An Option'

"My approach was to have a fairly direct conversation with the ATM and VISA networks," said Morrell. "Waiting was not an option. I'm the customer and their process wasn't working for me."

Morrell's role in the merger goes beyond network politics and hardware, however. He must orchestrate not only the IT side of the merger, but also the organization-wide transition-elements of which have extended beyond the April 1 expected completion date.

"I'm the point-person, because I have not only the IT understanding but also a global organizational understanding that in part comes from my background," Morrell explained. "And 90% of any of the credit union's projects touch the IT department at some point. We're fairly familiar with many aspects of the operation and with how change impacts people."

One of the trickiest changes in technology at the new $315-million iQ CU is bringing over the core system data related to the 3,500 members of the smaller CU, Morrell said.

The "biggest chunk" of the data has been automatically converted, but IT has to transfer the remaining pieces manually, including IRA, payroll, EFT and card records, he added.

"The biggest challenge is managing the project with the data processor, because we're working with four or five areas, such as core member data, the cards division and the online division," said Morrell.

Another "highlight" is interfacing, he continued. "We have to change the interface to our data processing system for City Employees' products. For example, we use different methods to handle ATM and VISA debit and credit card processing. We have to make sure we can handle the batch transactions from their environment as well as our own online transactions."

But not for long, he said. By summer, iQ will have had the time to convert the smaller CU's portion of transaction processing to an online environment, primarily by reissuing cards, PIN numbers, and 30-day disclosures to their new members.

Difficult To Quantify ROI

Morrell didn't calculate ROI for the merger- "we're tapping into a rich bed of potential and current membership, which I'm not sure how to quantify. If you can only do one side of the ROI equation, it's not helpful really," he said.

However, preparing for the merger and upgrading the infrastructure comprise the bulk of the expense, he added.

iQ is upgrading all of the smaller CU's PCs, ATMs, telephony and the network, Morrell said. Former City Employees' members will also gain access to new online services with iQ, including bill payment, check images, aggregation, and account to account transfers, he said.

Morrell said that the only like piece of technology is the two CUs' audio response platforms.

CUJ Resources

For additional information:

* iQ CU at www.iQcu.org

* www.cuttingedgefcu.org

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