By Kirk Drake | March 14, 2013

Credit Union Cloud Part 4: Obstacles

Credit Union Cloud Obstacles

For those of you following our series – last time we covered Credit Union Cloud benefits.  Now for those of you that are serious about learning about Cloud for Credit Unions – we will cover some of the main obstacles that our clients find.  Even though many Credit Unions can benefit from secure community clouds – the reality is there is a never ending list of reasons people can come up with to not explore cloud computing.  Here are some of our most encountered reasons and the counter arguments:

Top Cloud Obstacles:

• Internal IT Departments or Local IT Integrator
• Existing Infrastructure Investments
• Existing Software Limitations
• Employee Training
• Business Partner Road Blocks
• Contract Term lengths
• Fear and/or Ignorance

Internal IT Departments / IT Integrators

There are essentially three paths that we begin working with Credit Unions to evaluate Cloud options.  These are boiled down to the Internal IT Department, the External IT Department, or another internal Executive Sponsor.  The external IT Department will generally point out all of the flaws and risks associated with Cloud – until the day they sell it.  Then it will be the best thing ever.  Ultimately this is a basic economics problem.  Until they move their revenue model to supporting cloud – cloud will interfere with their traditional model.  You won’t need to buy expensive software or hardware from them anymore and you may not need to pay by the hour for support.  Hence- we would argue that if you ever buy software, hardware or product from your Local IT Integrator – they are probably biased and not a good source of information.  However, for those that make money on being efficient and making you more efficient- they will probably have good cloud advice.  The internal IT Department seems to go one of two ways – either they recognize that their true value comes from their ability to help drive the business or they like building everything themselves.  The former – tend to be future oriented and open to looking for new ways to try things.  The later – will push hard to keep things in house for both job preservation purposes and because of control issues.   Ultimately – the best strategy seems to be to get the entire executive team together – get collectively educated on the hows and whys of Credit Union cloud – then make a strategy decision.

Existing Infrastructure Investments

Most Credit Unions have spent significant resources on building infrastructure like data centers, branch communications, phone systems etc.  All of these add up to big spending and big ongoing support costs.  The pure accounting aspects of this mean that there is probably anywhere from a 3 to 5 year road block to migrating to cloud.  You financially can’t afford to just up and move.  Instead – put all of these depreciation schedules in one spreadsheet and outline the timing.  Then align the biggest expense savings and least value work to the schedule and just start moving one element at at a time.  Over the course of a few years you will see both ongoing financial improvement but also ongoing performance improvement.

Existing Software Limitations

Amazingly we still come across a number of applications that claim to not be able to support cloud.  In reality – as we dig in and build relationships with the provider we can almost always leverage both the cost and efficiency of the cloud.  In the worst case scenario we can put a physical server in line with all of the other cloud components and deliver it out of our remote data center.  This will get you all the bang and minimize the uphill battle with some vendors.

Click Here to learn about Software Licensing in the Cloud

Employee Training

Getting all of your internal employees in favor of cloud takes some work.  People are generally resistant to change.  Hence – training on how to leverage it for all of them is key and making sure you show them what is in it for them.  At first, they won’t like the additional security controls – but ultimately when the integration and consistency of the platform just works day after day they will become fans.  Also, showing them how they can make moves, adds or changes without waiting on IT will make them giddy.  Watch an operations leader find out they can add visio or project for one of their team members in less than five minutes and they will be thrilled.

Business Partner Road Blocks

Once in awhile we come across business partner road blocks.  Usually this is because they are in development stages or trying to do their own Software as a Service (SAAS) solution and want you to use theirs.  The good news is – usually we can show them how they can make more money and get to market quicker on our platform.  The bad news – they often don’t like to listen.  In these cases – OGO will work with the client and if necessary go on site and discuss how to jointly create a better experience for you.  After all – both providers should want to give our mutual client the best possible experience.

Contract Term Lengths

This is really the same issue as existing infrastructure investment.  To solve this one – map all of your contracts in a spreadsheet and just tackle each one as contracts come up for term.  Make sure with each adjustment you are aligning your long term Credit Union cloud strategy with each contract change or modification.

Fear and/or Ignorance

As for most Credit Unions cloud is still relatively a new way of thinking – there tends to be a lot of fear about making the switch.  To counter this – I think asking more questions and challenging the conventional wisdom is key.  Look for ways to ask how would you or how can you instead of giving directives.  My other favorite approach is to push an innovation workshop.  Challenge the participants to redesign the Credit Union as if they were a new entrant – than compare it to how business is done today.  

While I am certain there are many more obstacles – these are the primary ones that you might hear.  Listening and asking questions can go along way to selling your vision of a Credit Union cloud.

Next time we will cover key Credit Union cloud applications.   Do you have a colleague that you think would benefit from this series – if so please forward this to them!

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