Sometimes the best decision in a buyer's market is not to buy at all, according to one analyst.
Steve Olson, senior consultant with Covansys, a Farmington Hills, Mich.-based information technology service, urged credit unions to rethink their positions prior to making technology acquisitions.
One big key question, he said: Do your members really want it? Olson noted in remarks before the Michigan league's meting here that while technology is advancing rapidly, what's good for one credit union might not be good for another.
"Despite technology, research show that 80% of CU members prefer to conduct financial business in person, and 27% prefer electronic access," Olson said. "It's best to start small, take baby steps, take your time. It doesn't have to be done overnight."
Besides, he said, there is "no technology decision out there right now that is life or death."
While it is a "buyers market" right now, Olson cautioned credit unions that that doesn't mean they have to buy, and he offered some tips on things to consider before spending money. Among them, Olson said, is to find out what drives members to the credit union.
"Is it service?" he asked. "Some audiences do like the personal attention they receive."
Maybe it's the way your staff dresses or the color of the paint on your walls. Or perhaps they'll come if you offer multiple means of access to their accounts, he suggested, noting a simple survey could help determine what it is that is driving members.
Once a credit union has that information, he said, the next issue is obvious: what to do with it. If some members indicate they want better technology and others say they like the high-touch service, Olson observed, CUs have to determine how to decide how to please the most members.
"When you are evaluating technology, I encourage you to look at the total cost," Olson said, pointing to hardware, software, training staff and even informing members that it's available. "Then, ask yourself one of my favorite questions: 'What is the cost if we do nothing?'"
Also important to him, he said, is interoperability.
"I like trends that allow you to be able to mix and match," Olson said. "And trends that allow you to use existing software to get what you need."
He wondered aloud how many credit unions have purchased equipment that became outdated in two years. "You want tools that extend the life of older systems," he said. "New tools that can help old tools live longer."
His underlying message: Don't buy more than you need. And, don't be pressured into buying anything "by tomorrow" to get the deal.
Nothing is that pressing that it has to be decided right away, Olson said, especially when it involves a large sum of money.
That doesn't mean technology should be ignored, he said. While user acceptance to such things as home banking, e-statements and notices is slow, interest will pick up. His advice is to move ahead slowly.
"There have been a lot of changes in technology between 1970 and 2002," Olson said. "That's 32 years."
He said the IT industry is "going through a great flushing out" to adjust its focus on true return on investment. As they continue to work on creating tools that allow integration of existing equipment, credit unions-especially smaller ones who cannot afford to keep upgrading entire systems-will only benefit.
