There are many reasons why credit unions often loath changingcore platforms–even after their contracts expire. When pressed onthe issue, most executives point to some form of inertia. They'reused to their current system, used to their provider, used to theiraccount representative. When pressed further, the honest ones willadmit to another motivation: fear, especially fear of the unknown.To a certain extent, this clinging to the status quo helps thecredit union operate with familiarity, as financial institutionsthrive on normalcy and routine, especially as the economy and therules keep shifting underneath them. If they're not careful,however, normalcy and routine can quite easily lead to stagnationand decline. Comfort can become complacency and inertia can inhibitgrowth. So if you're looking to change, conversion isnecessary.

Let's unmask this conversion bogeyman for what it really is. Thealternative to the status quo, devoting the lofty amount of timeand resources to making a change to a different core solution,doesn't have to be daunting. It doesn't require abandoning what'scomfortable and what works. A core processor not resting on itslaurels can provide the tools and the personnel to help a creditunion move past the initial anxiety a conversion brings and realizethe opportunity that lies beneath.

The key to the decision to consider and possibly go through witha conversion is much like that of any other important decision,professional or personal: cost-benefit analysis. A credit unionobviously should only make the leap from one solution to another ifit represents increased value, especially in the long-term. But howdoes an institution determine if a move would be worth it? How doesthe process really start?

The first step is to take an honest, open look at the statusquo, and to do so without the bias of familiarity. A healthy systemcheck-up starts with the technology. When was it originallydesigned? When was it last updated? Is it capable of handlingtoday's growing complexities? Is it designed to be efficient, fast,and user-friendly? Is your staff providing excellent member servicebecause of it, or despite it? Are there ways to improve businesspractice that it can't handle? Is it holding you back?

If even a single answer to the questions above gives you pause,then there is most definitely a benefit to be had in a conversion.A spectrum of products exists and those at the top can handlemember service and operations in ways other systems–and the creditunions stuck on them–can only dream of. The only question thatremains is that of cost, and this can represent a tricky form ofcalculus based on each credit union's valuation of hard vs. softcosts.

Conversion cost comes in two forms: price and other expenditures(most notably employee time and effort) and both are commonlyoverestimated. Price is of course dependent on each credit union'ssize, needs and contacts. Soft costs like employee resources arelikewise flexible and are highly contingent on the core vendorselected for conversion. Those with a professional staff with theindustry experience to handle any issue can reduce the conversionefforts dramatically. These folks must be eternal optimists, asthey've made it their business to account for each unique wrinklein policy or process that any credit union may embrace. Fortunatelyfor credit unions across the country, the best core providers haveattracted just such experts.

Each credit union is unique, so each conversion opportunity mustbe approached from its own perspective, but the possibility offinding a core provider that fits both sides of the cost-benefitanalysis can unlock a world of potential. New technologies, allsupported by industry veterans to streamline the transition period,can yield tremendous opportunities.

What specific opportunities are they? First consider theopportunity to refresh your current database and policies. Systemusers from tellers to executives can exploit new layouts and thesimplicity of formerly byzantine tasks. Databases can be scrubbedand duplicate entries removed, speeding up a system and ultimatelyyielding better member service and faster, more accurate backoffice operations. Reports that have been generated for yearsbecause they were needed once can be purged.

Also bear in mind the new ways your credit union could operatethat may currently be restricted. Customize new workflows toenhance operations. Design better interfaces with third-partyvendors to increase efficiency. Introduce multimedia trainingmethods to ensure your staff utilizes every system feature. Andpossibly most important: recent developments allow member servicesto be completely revamped. The opportunities for improvement duringthe conversion process abound.

The sometimes daunting undertaking of a core search may appeardifficult enough not to be worth the trouble.

Once the specter of a conversion's true costs–financial andlogistical–is put in perspective, innovative leaders can begin tosee the conversion as they should: as a process where opportunitiesabound. Ultimately, this venture could enhance the value of yourcredit union for a prosperous future. So dispel your fears andembrace your core search with conviction and optimism. After all,like with any bogeyman, it's only scary until you confront theunknown and recognize all the good that's been hidingunderneath. 

Robert Landis is director of educational services at CorelationInc.
Contact 619-876-5074 or [email protected]