Can a simple software implementation prevent a major financial institution from sliding further down the dreaded spiral of inefficiency?
Yes, according to Carrie Todd, who experienced such a scenario first-hand as chief technology officer of 1st Advantage, a Newport News, Va.-based credit union that serves 62,000 military customers and manages more than $300 million in assets.
Like any business, 1st Advantage had high hopes when it made a significant investment in 1997 for its network server. For a while, everything ran smoothly, but the situation soon took a turn for the worse. By 1999, the cracks on the two-year-old server were beginning to show, and Todd knew that cosmetic changes could no longer delay the inevitable.
"We were starting to see performance issues, especially on heavy volume days," she said. "In some cases, jobs we'd schedule to run overnight, like payroll processing, were still running when we opened the doors in the morning."
The situation was so bad, Todd explained, that it began to affect customer service. The company initially tried to deal with the problem by adding another operator from 4 p.m. to midnight. The operator made sure that the current day's work was finished first, then scheduled jobs needed for the next day, such as payroll. Even that arrangement, which Todd described as more of a stop-gap, did not fully solve the problem.
After exploring a wide range of options, Todd turned to the DataSafe/SQL transaction processing system from USERS Inc. in the spring of 1999. In conjunction with the Cache database management system from Intersystems, Cambridge, Mass., DataSafe/SQL allows financial institutions to leverage core transaction processing systems more effectively. The 1st Advantage system is housed on a Compaq Alpha 4100 server using a VMS operating system, with the majority of end-user PCs using Windows 2000 on an NT network.
Since installing the Cache database, overall efficiency has improved drastically, said Todd. "We see the combination of Cache and DataSafe/SQL as a great opportunity to give our staff much greater access to critical information right from their desktops, throughout the organization."
"Besides giving end users more control and autonomy in accessing this data, it helps to free the IT staff from the task of generating reports and allows us to focus on more strategic projects," she added. "Our job performance has improved by 100 percent, or to put it another way, our job run times have been cut in half in most cases."
The number of transactions per month has jumped from 500,000 to 700,000, an increase of about 40 percent. The growth has come primarily from new delivery channels, like Internet banking and debit card authorization, made possible through the new system.
"Cache has played a role in allowing us to provide the new services our members need, without a costly hardware upgrade," Todd said. Because job processing times have improved, 1st Advantage is now able to schedule jobs to run through the night automatically, without staff intervention. "We've been able to move our operator off the night shift and focus her time and energy on projects that can have a greater payback for the credit union," said Todd.
An intranet-based document management solution, managed by the night operator, allows 1st Advantage to avoid custom printing and instead print documents on demand to plain paper. "In this way, the move to Cache has had many positive repercussions beyond the performance improvements," said Todd.
1st Advantage is now looking at adding another CPU, as have other credit unions that run the DataSafe system. That will allow it to get the most mileage from its current hardware before taking on an upgrade.
Besides improving efficiency, the move to Cache has allowed 1st Advantage to capitalize on the Cache SQL data extract technology, which pulls data from the core DataSafe transaction processing system in an easy-to-use format. As a result, it's significantly altered the way data is accessed and used.
For example, the group that works with auto dealers needs to track indirect loans separately from the rest of the loan portfolio, for incentives and other purposes. Previously, it tracked indirect loans manually on ledger paper, which was extremely time-consuming and inefficient.
Once DataSafe/SQL was in place, 1st Advantage built a Microsoft Access database that's accessible from the desktop. DataSafe/SQL pulls loan information from the core DataSafe system and populates the Access database. "So a process that used to take three days of labor each month is now just a matter of generating a report," Todd said.
The 1st Advantage experience is typical of that of many of USERS' clients, noted Anne Ballard, director of system services at Valley Forge, Pa.-based USERS. "Back-office jobs and reports run much faster and more efficiently, with labor savings often possible." Specific savings will vary by credit union depending on size of the organization.
Those CUs using Cache in conjunction with DataSafe/SQL are also gaining the ability to move the reporting function out of IT, said Ballard. DataSafe/SQL also makes it easier for third parties to access the data in the core system, enabling faster, less costly implementations of third-party solutions.