Somethings are certain in life like death, taxes, and if Ben Franklin were alive today I think he would add technology issues. These could be data breaches, outages, viruses, ransomware, or just the cost of IT in general. Everyone likes to talk about the need to get a managed service provider for credit unions, but do all credit unions need IT managed services? I think each credit union needs to measure the value of having IT managed services based on bevy factors including, People, Cost, Service Levels, Risk, and Business Alignment. If a partner can offer, or effect, at least two or three of these factors, it is worth exploring. Especially if they have a deep understanding of your business needs and regulatory concerns.
Where IT Managed Services Works for Credit Unions
- Growing Credit Unions – IT is focused on support and needs to be more strategic and align with the business, so the credit union can better serve members and be more competitive in the market using technology. Daily operations are still critical, but the focus needs to be helping the credit union transform into a technology company providing financial services faster, better, and smarter. Growth and competition lend itself to services where quality could erode from distractions and being reactive.
- Advanced Technologies that can give Credit Unions Competitive Advantages – Newer Technologies that can help the credit union and are being adopted in banks for competitive advantages. This creates a shortage of talent in the industry and an increase in competition for the resources that have the knowledge. Technology like hyper-convergence can help credit unions in a multitude of ways, but the lack of IT resources and the need for SLA’s and service catalogs make managed services more attractive.
- Creating a Business Case – A lot of IT talent in credit unions cannot create the cost justification or the business case for newer technologies. They have a hard time communicating the strategic value to move to newer technologies that greatly benefit the organization. This creates a need to have a partner who can bridge the gap and align IT with the business while taking in every consideration from compliance all the way to better serving credit union members.
- Difficulty of Hiring/Training/Retaining – Staffing levels for IT in credit unions can be tough to maintain. Having enough staff can be difficult, due to cost in a large market where job competition is high or due to rural locations where high tech resources are scarce. Leveraging a managed service partner can help retain high-tech talent at fraction of the cost due to scale. It also puts the burden on the managed service provider to keep its staff trained and maintained. Service level agreements are what the credit unions need to ensure great service.
Where IT Managed Services Do NOT Work for Credit Unions
- Same Mess for Less – Credit Unions looking at managed services as a way to simply take an existing workload that is not optimized and deliver that for less will be disappointed. The provider has to make money, so they have to be able to deliver services more efficiently, leveraging shared resources, and technology bound together with solid processes to execute. The service has to be built to deliver quality back to the business but delivered in a manner that will allow the efficiencies to be realized. Allowing the provider, the opportunity to remediate and optimize your environment before taking over support is the only way for shared success.
- Fast, Good, or Cheap – Choose 2 the old saying goes. The Project Management Triangle is the best way to describe this. If expectations are that costs can be reduced, services levels can be improved, risks mitigated, or other improvements can be realized, then the vendor will be challenged to deliver without taking the time on the front end to optimize and remediate the environment. Some investment may need to be made to get the environment up to providing the services you need for your business. Making sure you are willing to partner with your provider is the key to success. If you as a credit union haven’t done the proper soul searching to make sure your expectations are realistic, any managed service provider will fail.