Looking at the remainder of our 2007 budget, we need to cut our expenses. Can you suggest ways we can use technology to find cost savings, including within IT itself?
David Van Pelt, VP/Chief Technoloty Officer, IA Systems, Albany, N.Y.
Outsourcing application hosting can be a cost-effective way of getting access to critical business applications without investing large sums in IT infrastructure and staff. Hosted technology solutions typically require low initial investments and spread the cost of IT services across many organizations. Since the provider is an expert at hosting and optimizing its software solution, and it often includes robust operational controls such as providing business contingency services, the value proposition is very compelling. It can be cost-prohibitive for credit unions to invest in this level of technology and related IT staffing.
Todd Zerbe, COCC, Avon, Conn.
Making effective use of technology can provide cost savings as well as improved processes and better information management which in turn should lead to better decisions across the entire organization. The key phrase in the previous sentence is "making effective use of technology." There are far too many instances where the best intentions in technology management lead to less than desired results due to unexpected complications. It is critical when contemplating any use of technology that the business need is thoroughly defined and understood. A realistic forecast of what can be achieved, through what means, at what cost and with what ramifications is also essential.
Learning from past experiences, whether successes or failures, is something that should be emphasized and is key to avoiding undesirable results. A process should be formalized to perform timely, open and honest evaluations of each endeavor. This needs to be done in an environment where regardless of individuals' positions or reporting responsibilities that constructive criticism can be provided and discussed. You need to recognize not only what worked and what didn't work, but why. You need to determine what could have been done differently to achieve a better outcome. The entire team needs to be involved in this process and learn from the findings.
Though it takes time and experience, following a set of guidelines such as these will result in more successful technology initiatives which will lead to a more efficient organization that is better positioned to achieve its strategic goals.
Chris Barber, SVP/CIO, WesCorp, San Dimas, Calif.
You could evaluate the levels of support for each product and the timing of the contracts. A short-term way to cut a few expense dollars is to co-terminate all maintenance renewals for a specific date, such as Dec. 31. If it is done in the current year you might only purchase 6 months of a renewal now instead of a full 12, the rest goes against next year's budget. Another idea in this area is to evaluate the level of support for each contract and rearrange appropriately. Are you purchasing 24x7 with four hour replacement on all systems, including cold spares? Reducing the support level for specific systems, devices, and software can result in significant ongoing savings.
Also, look at utilizing a workflow tool to automate manual processes as a good way to save time and effort by staff members. Any repeatable process that can be defined and modeled can be input and handled electronically.
Another option is possibly migrating to open-source software solutions as a method to save both capital and expense dollars in the long term. The trade-off may be increased time required to administrate or support the systems.
If your operation is large enough, consider implementing an enterprise-wide energy/power management component which could bring a significant cost savings. If power savings were enabled on all PCs in an environment it could result in a meaningful energy and cooling savings.
Lastly you can look at the less attractive alternatives such as; outsourcing all non-essential tasks, curb non-essential purchases and reduce travel and training.
David McConney, EVP/General Manager, Credit Union Core Systems, Harland Financial Solutions, Pleasanton, Calif.
Automation is key to cutting internal expenses; including within IT. Your credit union can reduce hands-on labor costs and human error through automating as many internal processes as possible. Tools are often already available within current systems to assist in this process, many times from your core provider. Simply utilizing the system fully can help enhance automation and result in significant cost savings. Examples include unattended back office processing, automated loan decisioning, signature pads and real-time archival and retrieval capabilities.
Integration also contributes greatly to cost savings and credit unions should look to their core provider to enable as much integration as possible. Whether through solutions offered by the core provider or through technology that enables connectivity to third-party products, integration should be fully leveraged to assist with the automation process. The result is not only increased productivity and reduced soft costs but often reduced hard costs as well, such as paper and printing. Disparate systems will not provide the access to information your staff needs to properly serve members and will also produce unnecessary redundant processes.
Additionally, an analysis of usage and distribution of self-service channels can help determine where to focus marketing efforts to increase member use of self-service channels, thereby reducing overall costs.
Lastly, economies of scale can be gained by looking at partner relationships and consolidating those whenever possible. This will often result in price breaks and incentives and rewards offered to clients that use multiple products from one company.
We have developed a complex group of data analysis systems: CRM system and a business intelligence system. Which data should we store in our host transaction system, which in the CRM system, which in the BI system? Which is the system of record and which do you want to depend on when making decisions about members?
David McConney, Harland Financial Solutions
There are a multitude of systems and tools available today to analyze member data. The trick is determining which system, or systems, will work best for your credit union's specific requirements, help you make decisions about members, and fulfill your members' needs. Your core processing system should house all basic member information. Any additional Business Intelligence (BI) and/or CRM systems should be tightly integrated with the core to pull member data and eliminate re-keying. The advantage of having these types of systems integrated with the core means that a snapshot of the entire member relationship is visible and the door is then opened to expand that relationship. BI and CRM systems are designed to make sense of member data and put it into actionable information. Often times, however, BI systems are stronger in some areas and CRM systems in others. Many credit unions end up using some combination as often not one system can do it all. Historically, BI systems are designed to "analyze data" whereas CRM systems are designed to develop a "sales culture" and provide "service tracking" within the credit union. So depending what the credit union's overall goals are will determine which system is more heavily relied upon. The best scenario is to ensure whichever system or systems are being used, that they are integrated with your credit union's core system to ensure the information's integrity and to move that much closer to viewing each member relationship in its entirety.
Cameron Minges, Chief Innovation Officer, FORUM Solutions, Indianapolis.
The host system should always be the system of record. If the integration between the CRM and host system is strong then it shouldn't matter where other data is stored, such as note and lead information. The key is to build a strong integration layer between the two systems but not limit it to the host system. It should include the other systems that contain member information.
A business intelligence system is the brain center. It should provide a consolidated view of all the member's accounts. Additionally, it should make recommendations about new products and services that the member should qualify for.
Chris Barber, WesCorp
From a CRM standpoint, it makes sense (to us anyway) to only store information directly related to the members in this system. You can also use your CRM system to retrieve key transactional (and other data) from the data integration hubs.
Next, Transaction Systems should store all transactional data. This data can be moved daily or real-time to the data integration hub.
Lastly for Business Intelligence Systems, we like the idea of placing the BI system on top of a data integration hub that contains all key subject data areas-including transactions. This data is non-updatable and used solely for analytics. This makes the data hub the "one version of the truth" data repository that all retrieval requests should go to.
SUBMIT YOUR QUESTIONS TO THE EXPERTS
Readers of the Credit Union Journal can leverage the Journal's panel of technology experts by submitting questions to Lisa Freeman at lfreeman
