By Ray Birch
BETHPAGE, N.Y.—Collaboration among CUs only works when all the parts fit, says one CUSO that believes the secret to its longstanding success is the ability for the three partnering credit unions to share a common vision and goals.
That’s why Open Technology Solutions (OTS), an IT CUSO based in Denver that has served Denver-based $4.3-billion Bellco CU, $8.3-billion Bethpage FCU here, and $3.6-billion State Employees CU of Maryland in Linthicum, Md. for the last 10 years is not looking to expand to add partners and gain more scale, explained Linda Armyn, SVP of corporate affairs for Bethpage.
“We have been very successful with this CUSO, saving our credit unions time and money and helping us to operate much more efficiently when it comes to IT,” Armyn told CUToday.info. “But the key is not size. The key is getting it set up right, really understanding who your partners are and making sure you have shared values, goals and objectives. Everyone has to be on board and aligned. So when the CUSO makes decisions everyone has to be heading in the same direction or it won’t work in the long run.”
Armyn said that other credit unions have approached OTS about becoming part of the CUSO, which operates on a Fiserv core system.
“But we have not expanded from the original group,” she said. “The three of us are a good fit and sometimes adding someone might not make sense, despite gaining scale. It’s not like this is a business opportunity for us, trying to add as many credit unions to the CUSO as we can. This is about creating the right mix of credit unions that are truly partners.”
Savings of More Than $2 Million
The CUSO today has 120 employees who perform major IT services for the three credit unions—technical engineering (network, server, storage), data center management, development and quality/integration testing, business applications management, information security and desktop/end user support and help desk. Each credit union has a limited number of its own IT staffers to manage daily needs, such as software installations.
OTS CEO Mike Atkins said the CUSO provides approximately 200,000 direct services hours per year to its CUs at cost, delivering an estimated $2-$4 million in savings per partner annually.
“The other benefits are a very high level of service, such as for things like systems availability, timeliness, incident remediation …,” explained Atkins. “Because we are bigger together, we also receive scale discounts on contracted services and IT assets procurement—we buy in greater quantities for three credit unions than we would on our own.”
Value in Beta Testing
The credit unions also benefit from beta testing large IT enhancements, changes and upgrades.
“For example, when we all switched over to a new online banking platform, one credit union went first and worked out the kinks,” explained Armyn. “Then the next CU went live and then the final one. We all rotate, taking turns at being the one to first roll out a new service or platform. This really works out well for us. We learn from each other.”
Armyn added that in addition to saving time and money for the three credit unions, OTS over the years has helped the organizations bring products to market faster.
“Certainly, over the last 10 years, had we all been on our own we would not have been able to be leaders in bringing new technology solutions to our members,” said Armyn. “OTS not only makes us more efficient, it makes us faster.”
Importance of Priortization
The ability to jointly prioritize projects has been critical to OTS’s success, emphasized Armyn.
“You are working with two other partners that have their own ideas and priorities for growing and running their businesses. For a CUSO to effectively work—to be its most efficient and effective—when it comes to new projects you all have to be aligned and come together with a shared vision. If everyone is going off in different directions it makes it hard to be efficient and really get the cost-savings benefits.”
Armyn said that getting everyone on the same page often requires additional up-front time on projects.
“But then you make up for that and more on the back end as the project runs more smoothly when you have consensus and agreement,” she said. “Sure, there are times when we all don’t immediately agree on something—one credit union might want another project to go first. But there is healthy give-and-take and we work things out collaboratively for the betterment of all three credit unions,” she said.
The three credit unions also participate in a second CUSO, Shared Service Solutions, or S3, that’s based in Maryland. That CUSO provides support for fraud, account opening services, home equity and mortgage processing, consumer loan processing, call center services, compliance and more.