Over the last few years I have had the opportunity to speak witha number of credit union executives and information technologypeople about their aging IT infrastructure and their unwillingnessor lack of priority to develop a comprehensive tech refresh programto ensure they are matching life-cycles on equipment balancedagainst risk of failure.

Unfortunately, too many credit unions today are holding offupgrading their equipment well beyond what industry experts woulddeem reasonable. Examples include running servers well beyonda five-year life cycle, keeping old operating systems installed onaging PCs, and even worse, failing to keep their core applicationsoftware and other key programs up to date or patched.

I find this at odds with the fact that some credit unions assignlife cycles to documents, programs and even employees but will notwith respect to something as critical as their ITinfrastructure.

I fully understand the struggle credit union have endured withthe weak economy, NCUA assessments, corporate issues and the like,but the failure to properly maintain those elements that arecrucial to keeping their businesses up are putting their ownfutures at risk as well as their members' trust and maybe their ownemployment.

“Managing risk” is something every CEO looks at daily whether itis setting loan approval polices, determining the risk of aparticular investment, hiring employees or disaster planning. Thisis why it is so shocking to me to find that a fair number of creditunions are failing to account for the risk in using hardware andsoftware past their reasonable lifecycles.

Putting this issue in perspective, the following is an exampleof an analogy to why maintaining proper lifecycles are critical toevery credit unions on-going operations.

I recently visited a credit union in Arizona and drove pastDavis-Monthan Air Force Base, where our military keeps its retiredand out-of-service aircraft that have reached their expected lifecycles. They look perfectly good and I'm sure would functionjust fine given the chance to fly again.

However, looking at the rows and rows of these parked aircraftalso reminded me of an old Jimmy Stewart film – No Highway in theSky – which I had seen many years earlier.

The premise of the movie is that Stewart is an aeronauticalengineer who calculates that the tail section of an airplane willfail after it reaches a certain number of flight hours – which isakin to the Air Force parking its planes.

Try as he might, Stewart can't get anyone to pay heed to hiscalculations, which predict that the metal will suffer acatastrophic failure after a certain number of flight hours.

As fate would have it, he finds himself on board a suspect planewith a famous movie actress that he adores. When Stewart inquiresabout how many hours the plane has flown, he is stunned to learn ithas reached its limit according to his calculations.

In order to save the actress he storms the cockpit prior totakeoff and yanks the landing gear handle up effectively groundingthe airplane. In his bid to get someone to listen to him, he isplaced under psychiatric care and is subject to ridicule for tryingto warn people of the impending dangers, but to no avail.

As the testing continues on proving or disproving his theories,Stewart continues to assert that the airplanes should be groundedafter the maximum number of flight hours have been reached. Withthe clock ticking down on the test rig, the airlines, themanufacturers and the public watch as the predicted hours pass andStewart is left humiliated by his wrong prediction – the tailsection did not fail as he had predicted.

As the saga continues and the ridicule becomes unbearable, thetail section ultimately fails. Stewart is vindicated and ultimatelylives are saved.

After reviewing his calculations he determines that he forgot tofactor in one small variable; temperature. (Can anyone ever knowall variables?)

So the $64,000 question is this: What do parked aircraft in theArizona desert, an old Jimmy Stewart film, and this article have incommon with credit unions that run their hardware and softwarebeyond the generally accepted time frames?

Simple, both are destined to fail and the consequences, thoughcertainly not fatal, can be catastrophic to the members, thereputation of the credit union, and ultimately the accountabilityof those who failed to heed the wisdom in putting together areasonable but predictable technology refresh and upgradeprogram.

So what is reasonable? There are published guidelines thatgive IT managers a starting point on which to base theirrecommendations based on the various technology components. But arule of thumb using 36-60 months would be a good starting point formost things.

My main point in writing this is simply to draw attention to thefact that far too many credit unions are putting themselves at anunacceptable risk by:

• Using existing technology beyond a reasonable life cycle.
• Failing to implement the newer technologies that can providefor better member service, efficiencies, and even attracting theyounger generation who expect rapid change. (Think about the lasttime your teenager got a new phone. Average life of that item isbetween 12 and 24 months.)

Case in point: At several recent conferences I have attended, Ihave heard messages repeated that pretty much stated credit unionswere falling behind the curve in adopting new technologies. Thismessage seems to be a change from years ago when credit unions ledthe way with technological innovation.

To thrive in today's market place and appeal to the younger GenY's and Millennials, credit unions must have a faster rate ofadoption in terms of technology to stay in the game.

The best way to do this goal is to recognize that maintaining astrong IT infrastructure and adopting a reasonable “tech refresh”program, along with a constant review of new technologies, is goingto be required to remain competitive going forward.

If you find your credit union in this situation, then at leaststart by forming an IT committee that can evaluate each area ofimportance and assign a critical component score that will helpidentify those programs/services that are in need of upgrade andthen put a plan together to upgrade those areas – which, by theway, may entail a review of who you are currently doing businesswith as well.

One thing our company tries to do with our customers is to meetwith them periodically to assess how well they are using ourprograms and services, talk to them about new things that may be ofbenefit, and let them know if their current infrastructure is duefor retirement.

I realize that this will be interpreted as an excuse to try toupsell, but if your vendors are indeed partners, then this is alsoan opportunity to let them help you establish the refresh programsthat should be put in place for your own benefit as well as usingtheir expertise to your benefit. In effect, it multiplies your techresource.

Please take a hard look at your own technology refresh programand see what you can do to help guard your credit union againstcatastrophic failure much like the military does with their planesin Tucson or the ones in the Jimmy Stewart movie.

ScottCowan is vice president of sales and marketing atMillennial Vision Inc. in Salt Lake City, Utah.