Avoiding the Technology Trap
New technologies continue to be released to consumers and businesses at a rapid pace, and as the technologies are adopted and prices fall, credit union executives may find themselves facing what can be called the "technology trap," which is purchasing technology for technology's sake. Conveniences such as online, real-time access to accounts, bill payment, and 24-hour customer service have become expected services from a primary financial institution provider, not value-added as they were once viewed. Consumers expect increasingly higher levels of service, automation, and easy accessibility to data. With so many new technologies available to choose from, credit unions should be careful to select the "right" technologies that provide support for their business strategies. So how can your credit union avoid the technology trap? Should your credit union place all of its resources toward buying and implementing every new technology that becomes available? Probably not. Some executive level steps that can help your credit union avoid the technology trap are: * dedicate time to education ; * anticipate changes; * clearly define your business strategy and vision; * select business solutions that support your strategy and vision. Resources For Education Credit unions should educate themselves about emerging and available technologies and trends in the marketplace. This provides a solid perspective of all alternatives available and allows executives to make grounded business decisions. Education can be gained easily and with little to no expense through channels such as online news media, monitoring and tracking of member behavior, attending seminars, and through continual communication with business partners. Take a look at the resources available to your credit union and make sure to fully utilize the systems you already have in place. Relationship management has been a buzzword for the past several years among credit unions, but what many institutions do not realize is that relationship management can often be implemented without purchasing costly software systems labeled "CRM Software." Evaluate the systems you have to determine if they are able to accomplish your relationship management goals. Paying attention to your members' behaviors and personalizing your delivery of service based on past actions can be accomplished within most core data processing systems. The first step for relationship management implementation is to determine the behavior to be monitored. Once this is decided, reports can be run within most data processing systems that automatically group members according to specific criteria. Printed reports can then be generated detailing this information. The basic action of placing members into groups allows your credit union to begin implementing the core principals of relationship management, including tiered rates, fee rebates, and targeted marketing. Creating partnerships with primary vendors can provide your credit union with another valuable source of information and education. These business partners have staff members dedicated to researching new technologies and can help expose your credit union to emerging trends and available options. Business partners can also provide guidance on how to best implement new technologies in a cost effective manner. Gaining education about your members, in addition to keeping pace with market changes and technological advances, is an important step in anticipating members' future needs. A Total Business Solution When education is an integral part of your credit union's culture, anticipating marketplace changes and consumer needs becomes easier. Avoid the temptation to become too operationally focused. The creation of a strategic plan that is actively used and doesn't sit untouched in a desk drawer can be a powerful tool. Taking a holistic approach to business planning and purchasing technology that supports total business solutions makes it easier to determine what to purchase and when purchases should be made. Credit union employees traditionally wear many hats and should be cautious to avoid becoming reactive versus anticipating changes and taking a proactive approach to service delivery. Anticipating behavior and changes is a critical part of making technology decisions. Anticipation of member needs and market trends helps determine what technologies should be pursued and "weeds out" the advances that are not critical to meeting overall strategic business objectives. Throughout the education and planning process, communication is an important factor in the technology selection process. Communication is critical to justifying the need or desire to purchase new software or hardware. Recommending the purchase of new technology to your board with the reason that "it's really cool" is not sufficient justification for a new purchase. Outlining projected cost and return on investment is crucial. Cost justification can be especially challenging in situations that produce no tangible revenue, such as offering bill payment at no cost. When this situation arises, potential benefits can be viewed and justified from another viewpoint, such as the number of new members the service will attract, or the ability to cross-sell additional services and increase the member's loyalty and account balances. If these benefits are used in a cost benefit analysis, make sure to deliver on the promises by being ready internally for the new technology. Train staff members, market effectively to members, and closely monitor member acceptance and use of the new product. Once the decision is made to purchase new technology, communication remains critical throughout the planning, implementation, and rollout phases. Failure to communicate clearly during any of these steps can result in project set backs, such as exceeding budget limitations, poor understanding of the new technology, and low member acceptance of a new product offering. Every credit union has different technology needs based on the composition of their membership bases and on short- and long-term business objectives. The needs of members play a key role in determining technology strategies. While credit unions may think they can judge their technology needs based on their size, the number of members and asset size are not as important as the needs members have Credit unions should determine the strategy they wish to follow, whether it is focused on market growth, technological leadership, or service superiority, and purchase technology that helps them meet overall business goals.