Merger and Conversions Demonstrate Challenges Met
For credit union executives planning a core banking system conversion, feelings of fear and stress are common.
Throw another factor into the mix, like a merger, and the conversion process becomes that much more overwhelming and complex.
The $1.5 billion Stanford FCU in Palo Alto, Calif., and the $681 million First Community FCU in Parchment, Mich., said they were able to sail through their core system conversions. Both give substantial credit to their hiring of Samaha Associates, a consulting firm in Chino Hills, Calif., that specializes in credit union core system conversions.
Stanford FCU said it was gearing up to move from an old, outdated system onto one from Open Solutions Inc., and enlisted Samaha Associates’ help throughout the conversion process, mainly for the management of third party interfaces, batch jobs and forms.
First Community FCU faced a uniquely challenging situation. It planned to convert from a Fiserv system onto a Symitar system and had just merged two credit unions, each of which ran on two different systems of their own. This essentially left the credit union with three projects: convert its Fiserv system onto Symitar, convert the merged credit unions’ systems onto Symitar, and manage third party vendor interfaces for all three.
Samaha Associates came in to assist with the credit union’s contract negotiation process with Symitar and saw the conversion process through to its end, according to the credit union.
Sabeh Samaha, president/CEO of Samaha Associates, describes his firm’s consulting process as meticulous and personalized. His team offers credit unions assistance throughout their entire core system conversion processes, from the vendor selection period up through go-live day. Depending on the credit union’s needs, they may only help with certain parts of the process, Samaha said.
When his team helps a credit union begin investigating vendor and system options, Samaha Associates sit down with the staff to discuss their needs in depth and come up with a list of 1,000 questions to ask potential vendors.
“The credit union needs to understand which vendor is the best one for them, but we believe they also need to understand themselves, and from that understanding, find the best fit, ”Samaha said. “The amount of energy they spend on finding the right vendor should be the same as the amount of energy they spend on self-discovery.”
Samaha Associates said it helps its clients narrow their core system vendor pools down to two or three top choices, then brings the top vendors in for interviews and demos. Next, the consulting team and credit union look for gaps in the vendors’ systems, fill out scorecards for each system and make a final decision.
Samaha said some of the most common fears credit unions have going into a core system conversion are that they will suffer a system outage, be prevented from working on other projects and exhaust their staff.
Stanford FCU said it didn’t need Samaha Associates’ help in every stage of its conversion. The credit union had already chosen Open Solutions Inc. as its vendor and had a firm grasp on how to manage the process. Instead, it primarily needed assistance with smaller details, said Jim Phillips, senior vice president and chief information officer at Stanford FCU.
“We needed a consultant to go beyond just managing meetings,” Phillips said. “I liked Samaha Associates because they were ready to change our game plan and brought in different resources for us.”
The consulting team specifically worked on managing and organizing third-party reporting extracts and interfaces, automating batch jobs and managing internal and external forms for the credit union. Stanford FCU also completed a mock conversion during the month prior to their official go-live day, as well as identified and addressed all potential snags ahead of time, Phillips said.
Robert Moore, information technology manager for First Community, said after merging two credit unions–Education First Credit Union of Detroit, Mich., and First American Credit Union of Beloit, Wis.,–in a two-year time period, the credit union chose not to convert the merged credit unions’ core systems onto First Community’s existing Fiserv system since they already planned to switch to a completely new system in the near future.
First Community began looking for a consultant after narrowing its vendor search down to a few options. Moore said he liked the fact that Samaha Associates didn’t require the credit union to start their search process over again.
Aside from helping First Community with their vendor contract negotiation process and overseeing the conversion, Moore said Samaha Associates conducted a gap analysis to pinpoint all the differences between the credit union’s old systems and the Symitar system, as well as managed its third party vendor relationships.
“Our management staff had never been in that kind of a situation, so they were going in blind,” Moore said. “Then we brought in the consultant and they gave us a ton of confidence.”
Moore said after working with Samaha Associates for 16 months, the credit union executed a flawless conversion without any major member-facing hiccups. The biggest lesson Moore said he learned while working with Samaha is that it’s definitely worth it to spend ample time identifying and solving issues that could potentially crop up before the actual conversion begins.
“All of the legwork we did in advance really paid off,” he said. “We put a lot of hours in beforehand for due diligence and testing. The phrase Sabeh used during the pre-work process was, ‘searching for the Murphy’s.’”