Credit Unions Go Portal

by W.B. King
For generations, the card catalog was a familiar sight to library users but was effectively replaced by systems like the Online Public Access Catalog (OPAC). Essentially, OPAC is an intranet. When implemented in a university setting, for example, this system provides students, staff and professors with the ability to borrow books at any time of the day or night, to share lectures and to research materials.

But whereas intranets are deemed beneficial on many fronts, there are inherent limitations to them. To this end, many businesses in the financial sector, including credit unions, have implemented costly intranet platforms only to struggle with an unsatisfactory user experience that requires continual and costly updates.

"In the early days of the World Wide Web, intranets did in fact represent a quantum leap forward in your ability to organize information and present it in a uniform and easily accessible format to your employees," explains Eric Fisher, sales and marketing associate for the West Lafayette, Ind.-based Passageways, a corporate portal provider for approximately 80 credit unions, including 10 of the largest 100 credit unions nationwide. "Many credit unions' IT staffs invested in software programs like DreamWeaver, FrontPage and NetObjects Fusion to simplify the creation and maintenance of their intranets. Unfortunately, these early intranets often created as many problems as they solved," he adds.

While technological terms have historically been misconstrued by tech-challenged professionals, Passageways' co-founder and vice president Paroon Chadha explains that perceptions are changing. "Most credit unions 'get it,' as far as the differences between intranets and portals are concerned," he continues. "In fact, a good 75 percent of our clients had an intranet before they contacted Passageways." The frustrations and limitations associated with intranets, however, often result in "a formal 'killing the intranet' ceremony before a portal is launched," Chadha adds with a chuckle.

Compare and Contrast
Following the logic that OPAC systems couldn't be implemented without the advent of the card catalog system, a corporate portal has become a viable and successful solution due, in part, to the content provided by intranets. And while data contained within is considered static, it's still beneficial.

"In our opinion, an intranet is an internal library," says senior director of product marketing, Bruce Milne, of the Austin, Tex.-based Vignette Corporation. "The portal, however, also allows for the view of the back-office systems [that are] customized to individuals, appropriate to their roles. Both systems are important," he continues. "What is key is the live data transaction that is available through a portal."

And while portals are beginning to resonate with credit unions across the country – Vignette counts a dozen among its clients, including the largest U.S. corporate credit union, WesCorp – other industries have been noticing the benefits for years.

In May 2002, the merger of Hewlett-Packard and Compaq Computer Corporation resulted in a combined 140,000 employees with capabilities in 160 countries and business being done in 43 currencies and 15 languages.

When HP decided to change its ways of conducting business in order to capitalize on efficiencies, reduce business-related costs and essentially work smarter, it turned to Vignette. The result was @hp portal, a system that consolidates information, applications and functionality, which originally spanned more than 2,000 internal sites. Milne explains that portal benefits for HP's hundreds of thousands of users include accessibility to online administrative-, job- and life-related resources. Additionally, employees also can locate product descriptions, research data and competitive information on the @hp portal.

According to Vignette, the @hp portal, which encompasses roughly 12 million pages, was pivotal in supporting the integration of the 57,000 former Compaq employees who joined HP after the merger. Through the portal, HP ensured that all former Compaq employees and existing HP employees receive consistent information regarding company policy and emerging news, and this capability has proven to be one of the enduring benefits of the @hp portal.

While the portal was first conceived to streamline Human Resources (HR) applications, @hp developed into the primary online workspace for HP employees worldwide, averaging nearly two million hits per day. By consolidating their information on the @hp portal, Milne explains, HP eliminated more than 2,000 Web sites and 4,700 separate URLs on the company intranet. The company accomplished this feat by consolidating their information on the @hp portal, thus resulting in significantly lower hardware, support and maintenance costs.

With the aforementioned reductions and the paperless processes being enabled by @hp, along with the lower volume of employee calls for assistance to HP's internal call centers, HP realized an estimated $50 million in savings six months after launch. Increased employee self-service also allowed HP to close a portion of its call centers and redeploy employees to higher-value work.

"The single portal strategy was particularly valuable to HR. We were able to consolidate and eliminate a lot of duplication in our infrastructure, which resulted in significant cost savings," John Seniuk, HR Architecture and Strategy Manager for HP said. He added that the portal was "a lightning rod for even further reinvention at HP and has helped enable HP to reinvent itself as an e-service company."

Milne says HP is one of countless examples of portal success, a reality being experienced in other industries "Hewlett Packard has realized multi-millions of dollars in savings," says Milane. "They were able to manage the costs of individual sites down to a single framework."

Perspectives From Within
The Long Beach, Calif.-based LBS Financial Credit Union, supporting 110,000 members, and 235 employees in seven offices, recently faced a similar, albeit smaller, dilemma regarding the best solution to expand upon an intranet platform that was becoming outdated with each passing day.

"For a number of years, we had been using an intranet that was developed in-house. Our initial goal was to update that existing intranet using newer technology, specifically MS SharePoint Portal Server," recalls Kevin Reed, LBS Financial Credit Union's vice president of Information Systems. "During the time our intranet development team was researching the features available in SharePoint, we began to hear about Passageways Portal through trade publications and Web casts, and [we] began researching Passageways as well," he continues. "After spending some time debating the advantages of both SharePoint and Passageways, our team unanimously selected Passageways because of the quality of the product and, equally important, the quality of the Passageways staff."

Microsoft's SharePoint is widely accepted as a universal tool that is used to broaden intranet user capabilities to perform as an integrated portal. Within certain industries, it has proven quite successful. "Portal technology is mainstream now," says Chadha. "Microsoft always enters markets once they are convinced that it's a huge market, and not any sooner."

Allianz Global Investors, one of the five largest asset managers in the world with operations in 70 countries and over one trillion Euros (U.S. $1.2 trillion) under management, recently implemented SharePoint's 2003 platform. To meet both internal and external demands, the company's U.S. subsidiaries needed to improve internal communication, accelerate service delivery and develop a more cohesive corporate identity, a Microsoft spokesman related to Credit Union BUSINESS magazine explained via e-mail.

As a result, Allianz Global Investors of America delivered the solution in less than six weeks: an enterprise portal based on Microsoft® Office SharePoint® Portal Server 2003, Microsoft Windows Server™ 2003 and other Microsoft software. According to a Microsoft case study, "This portal has led to improvements in key business processes, including accounting and IT project administration. The portal also enables more efficient use of IT resources, higher information security and improved corporate branding across the Allianz Global Investors' family of companies."

For LBS Financial Credit Union, however, SharePoint became a less attractive alternative. And once costly variables were identified, it was determined that the portal equation Reed and his team toiled over did not equate to SharePoint offerings. "Using SharePoint would have required dedicating our in-house development staff to a lengthy intranet project, and for continued maintenance in the future," says Reed.

Simply identifying the perceived shortcomings of SharePoint software did not solve the larger problem of identifying a portal platform that would not only meet LBA Financial needs but also be accepted by the credit union and its members.

"The portal is really a tool [that is] used by staff only, so members don't need to know much about it, other than that it improves staff productivity and therefore improves the member's experience with the credit union," says Reed. "Our biggest concern was whether Passageways' technology could match what our in-house developers could do with SharePoint," he continued. "We're fortunate to have outstanding developers on staff. After taking a site visit to Passageways' headquarters last summer to meet the staff and talk about technology, our developers were very comfortable with the technical expertise of the folks at Passageways and the direction in which the company is heading."

Clearing Hurdles, Costs and Training 
When it comes to technology, Milne says, "Credit unions tend to be later adopters." Among his reasoning behind this tendency is that credit unions generally have comparably smaller budgets and their membership is not as demanding as banking customers.

"The sale is not easy to make," says Chadha, "but it does require getting all stakeholders to see different presentations and buy into this game-changing project."

Reed sees technological absorption rates differently. "I'm not sure I agree 100 percent with that statement that credit unions are slow implementing new technologies," he continues. "Compared to banks, I believe credit unions adopt new technologies fairly rapidly. Not 'leading-edge' technologies, perhaps, but pretty close."

In any industry, convincing CEOs and boards of directors to consider adding new technologies is often an uphill battle. "You have to take advantage of best practices and not reinvent the wheel," says Milne. "When it's the case of a strong business but a weak IT department, the CEO asks, 'Can it be built?'"

While there are numerous software applications that IT departments can use to build a portal, like Metadot and Plumtree, Passageways, for example, has seen more than a 140-percent compounded annual growth rate in the last three years and estimates it will have 100 credit union clients by the end of the year. "A lot of our clients have grown rapidly in asset size in the last twenty-four months, and we are convinced that the biggest reason is making good choices on technologies and strategies," says Chadha.

Off-the-shelf portal software platforms are by and large standardized but are developed to be augmented to client specifications. "What we find is that out of the box, we meet 50 to 60 percent of clients' requirements," Milne continues. "Bottom line is that every client feels their needs are unique. Credit unions have a unique membership and unique requirements, and we build to their needs."

There is also a plausible reason why CEOs often call on the company's internal IT department to "build to suit" or design a portal because as Milne put it, a grimace resulting from "sticker shock" is often the result of pricing discussions, a reality Chadha also acknowledges.

"For a credit union with 150 employees, the project costs $25,000 to $40,000 depending on the modules purchased," explains Chadha. "Typical Passageways clients have a couple of branches and have about 100 employees," he continues. "We believe that any credit union with more than 20 employees is a prospect but our sweet spot is a credit union with one to two hundred employees."

After an exhaustive search, Reed explained that the cost for Passageways Portal was reasonable. "Considering that it was about the same price as the licensing fee for SharePoint, and all of the development is already done for you, it's a real deal," he continued. "At LBS, we've spent some time refining the content and procedures to be published on the portal."

Milne said Vignette's pricing fluctuates depending on variables such as the scale and number of users. "While building a platform is less expensive on the onset, it doesn't pay off in the long run. A credit union is not the same as IBM, for example," he says, adding, "credit unions have to identify who their demographic is and what their expectations are."

Bringing staff up to speed on new technologies is another consideration, which includes training. LBS Financial's portal has been in "a soft roll-out process" since April 1, 2006.

Reed said, "The system is intuitive so the need for training has been minimal."

"The average employee today is very familiar with the Windows look and feel. Our software has the same feel and thus adoption is not really an issue. It takes two to three hours of advanced user training for power users, which is typically about 10 percent of all employees in the credit union," Chadha notes.

Vignette also recognizes the need for instruction. "We have training of all sorts," explains Milne. Clients have online, onsite and training classes at Vignettes' headquarters. "We're very hands on," says Milne, which in today's technical vernacular translates both literally and figuratively (closed-circuit television classes and interactive Web casts, etc.).

Future Trends
In early August, IBM's $1.6 billion cash bid to acquire FileNet Corp., a Costa Mesa, Calif.-based developer of content and business process management software, was in Milne's estimation a "clear validation of a trend" that companies are in the process of capturing, processing and acting on critical business information.

Additionally, Chadha said that while industry analysts feared in recent years that portal technology would be subsumed into OS or Application servers, Service-Oriented Architectures (SOA) are the model by which all portal vendors are busy re-factoring their next version of software, including Passageways.

"SOA will be the CIO's secret weapon in the next three to five years and the portal projects will be the launch pads. SOA will lead to an all-embracing environment for each individual credit union employee and will provide new and richer user experiences through applications that integrate the Web and the desktop more closely."

From Reed's perspective, a portal has enabled LBS Financial to have "better staff awareness of policies and procedures, better communication and greater overall efficiency." He added, "I think nearly everyone involved with the portal project, from executive management down to the front-line staff, easily recognized the advantages a portal brings to LBS Financial."

At a recent international technology summit, Milne sat on a committee of "stodgy old guys" who were collectively determining the direction of future Web-based technologies. The dais surveyed a group of tech-forward twelve- and thirteen-year-olds. "We asked how many of them used e-mail," Milne recalled. Not a hand was raised. When asked why not, the response was that e-mail is too slow.

"The expectation of immediacy is ingrained into the next generation that doesn't realize that there was a time before e-mail," Milne says. He adds that in the financial industry, "real-time" transactions and access to account information are quickly becoming hot-button issues among "baby boomer echo" customers, a reality credit unions must face. To this end, Milne says portal technology will be increasingly embraced across all industries. "We [Vignette] want to be on the forefront of the personal, Web-based experience," he says. "Consolidation is the direction of the future."  CUB

W.B. King is an award-winning journalist with over 10 years experience writing for national and international business, technology, lifestyle and health care publications. He can be reached at brad@wbking.com.