We travel to beautiful Red Deer, Canada, for this month’s GonzoBanker of the Month award. Not that the 120-degree heat in Scottsdale in July isn’t nice, but the average high in Red Deer this time of year hovers around 75 degrees…
Community Savings as an organization shows its Canadian pioneer spirit when it comes to excellence in service and financial performance. In today’s banking world, more core system conversions are driven by mergers and acquisitions than by meeting the need for a boost in the technology platform! It takes guts, coupled with countless hours of hard work and painstaking effort, to accomplish such a major upshift in technological functionality. More than one CIO we know has deferred a change of this magnitude until after retirement—let someone else take on that chore—but Nelson Tkatch, CIO of the band of trailblazers at Community Savings, is a swashbuckler when it comes to his passion for a highly integrated, digitally based operating environment that takes full advantage of state-of-the-art virtualization.
Vice President & CIO
Red Deer, Alberta, Canada
Unofficial Title at Community Savings:
Captain Propellerhead and Chief Reboot Ranger
Gonzo Title: Captain Linux of the Tundra
Gigs Prior to Community Savings:
Farm Credit Canada, Richmond Savings Credit Union, KPMG Vancouver
Gonzo Claim to Fame:
Nelson’s shop implemented a new core operating system running under Linux (a production first, we believe, which will save Community Savings millions of dollars over time), co-located the hardware elsewhere (Nelson says “Manage the information, not the physical environment!”) and came up on Day One of conversion with real-time remote replication at the credit union’s disaster recovery site 1,500 kilometers away in Winnipeg. Now that’s Gonzo best practice IT!
Nelson and his fellow execs decided to make this change because it was the right thing to do, if not the easy thing to do. Community made the change to meet critical business needs, and made it using a product developed for the U.S. domestic market that had never before been installed in Canada. Major challenges included incorporating the functionality required to operate in Canada—little things like completely different retirement account processes, standardized nationwide bill pay, a different ACH environment and different ATM network processes—while integrating the advanced business practices that have made Community Savings so successful in its market.
A Conversion that Moved the Ball Forward
Nelson and his team converted banking and credit origination systems at the same time in June 2006. Both were the first implementations in Canada, and Community now has state-of-the-art systems. Scope management dictated deferring many lower-priority, non-critical or nice-to-have requirements, which are now being accomplished. At conversion, the team also took the leap into electronic document management with driver’s license scanners, digital signature pads and imaging of system reports and member receipts. Nelson moved from a service bureau model to a hybrid in-house/co-located facility model, where his facilities management partner hosts and operates both production and real-time disaster recovery sites while Nelson’s IS team is responsible for all aspects of the development, test and training environments, and production software.
And if all that weren’t enough, Nelson is currently studying online for a Masters with the University of Liverpool!
Overview of the Core System Conversion Project
Community Savings began the process in 2003 as part of a larger collective effort led by its service bureau provider to find a new strategic platform. Because it wasn’t clear if the service bureau model would handle the credit union’s steady growth and ultimately be the best strategy going forward, the credit union commissioned a parallel project to evaluate banking systems for a stand-alone (in-house) processing model.
“Shortly after the collective project’s recommendation was made, we were able to compare that solution with the system our team thought was the best fit for us,” Nelson said. “Some of the key determinants for us were access to data, road-map for the product (including its technology platform), and having all the components to help us get to our vision of a highly integrated, digitally based operating environment.”
What were the keys to success on this project (e.g. specific advice you would give to other GonzoBankers)?
Resourcing. According to Nelson, it’s not just the amount of resources; it’s the skills, brain power and cross-functional coverage that a great team contributes.
Training – “No matter how sexy the system, it’s still only a tool and you need to ensure it can be used as effectively as you need it to be,” Nelson maintains. Financial institutions blow it when they assume vendor-packaged training material is sufficient to make employees efficient at conversion.
Testing – “Test, test, and in case I didn’t mention it, test,” Nelson urges. “The inclination to accept deficiencies when ‘we’re this close’ is great. In the lab, being close might look good enough but that will make you want to go back and test some more.”
Contingency planning – Nelson feels that to most vendors, contingency planning is a software development exercise. “They measure themselves on delivering something they believe works,” he said. “And despite your testing efforts beforehand, something always seems to fail in a way you never expected after you’ve made the final ‘go’ decision.”
If you had to do it all over again, what would you do differently?
There are many critical aspects to consider before converting core systems. Nelson advises against being the pilot customer or early adopter in your market. Community Savings was the first implementation for the core banking system outside the U.S., and as much as it might seem Canadian operating needs are very similar, the scale of customization required to deploy a banking system into another country is huge. “I would definitely recommend a project manager who’s done several banking system conversions of your scale or larger,” Nelson said. And because Nelson and his team encountered hurdles that constrained their ability to do all the testing they had planned, Nelson strongly recommends not proceeding without results-oriented (e.g. deliverables-oriented) testing.
Shout out! Who on your team would you like to give credit to for helping make this project successful?
Well before getting into the nitty gritty of the conversion project, Nelson’s team established a new internal branding called “Banking on each Other,” which created the supportive environment that Nelson said made the difference. This was truly a team effort across the organization, but if he had to single out any one group at the delivery end of the business, Nelson said it would be the Member Service Representatives and Contact Centre Agents, who had to do their job, do it using an unfamiliar tool and answering every possible question members could launch at them related to the conversion.
“The Core Team of business resources we recruited for the project, along with the IS Department, were together voted the top Administration Department by their peers – a well-deserved recognition of the tireless effort of an incredible group of dedicated individuals,” Nelson said. “I would also acknowledge the executive team, as quite a few had limited or no experience with a banking system conversion and they kept ‘walking the talk’ as we moved through conversion.”
What do you love to do outside of the office? Or, what would you do for a living if you weren’t in banking?
Nelson said he has a wonderful family and loves spending time with them, especially doing things outdoors and traveling. He is an avid reader and sports card collector–baseball, hockey, basketball and football, but mostly baseball. Nelson has been an eBay member since 1998.
If he weren’t in banking, Nelson said he’d like to be teaching at the college or university level.
Favorite movie of all time?
What is the most underrated rock and roll album of all time?
As a “guitar bigot,” Nelson said it’s a toss-up. First up, Johnny Winter Live (1971). “While it’s full of covers, Johnny is a master, and who can really resist pulling out the air-guitar on this one?” Also right up there is Derek & the Dominoes’ Layla and Other Assorted Love Songs. “Maybe not most people’s definition of classic rock and roll, but some amazing tunes (and guitar work).” The Gonzo folks can’t disagree with any favorite music that involves Clapton.
Thumbs up to Nelson and his team. GonzoBanker salutes you. As the GonzoBanker of the Month, Cornerstone is pleased to donate $250 in Nelson’s name to the charity of his choice: Big Brothers and Big Sisters of Red Deer.
Combining project management methodology, budgetary oversight and effective communication tools, Cornerstone Advisors saves you time and money and helps ensure a smooth and well-timed conversion. Cornerstone Advisors is backed by more than a decade of experience assisting well over 100 financial institutions make educated vender decisions.
Contact Cornerstone today to take some of the stress out of your system conversion.