There is a dichotomy-affecting pension managers on technological issues.
It either overwhelms or scares them.
Those who are troubled shun it, while dazzled Information and Communications Technology (ICT) departments frequently become prisoners of their own technological fascinations.
For most organisations today, technology costs continue to spiral upwards, solving very little. Yet these organisations continue to invest heavily simply because they cannot afford to lag behind in retaining their competitive edge. This syndrome continues year in year out even when the newly procured systems have adverse effects on their business.
On one hand, if organisations are not reducing back-log in terms of mainframe software developments then it’s investing on the internet and if this makes them defenceless, their next course of action is to dive into intranet solutions.
In the pension business technological systems need to cope with greater customer expectation in terms of not only volatile markets, but also reacts fast to unexpected opportunities or threats.
This kind of scenario although unpredictable is no excuse for not planning.
Perhaps the pertinent problem today with a dynamic and wide range of regulated investment alternatives is how this affects senior executives.
This group of managers catalyse business change by promoting technology while disregarding how people in an establishment actually go about sharing and making use of information on a day to day basis.
Failure to define relevant and flexible requirements results in the system becoming obsolete by the time they are ready, a common theme today.
Managers of small pension funds need to keep their business objectives in focus before developing IT models. It is very important to ask your adviser not only what his intentions are but also why it is necessary for your organisation to embark on updating existing systems.
Additionally, the potential waste of money from technology traps, which enhance the organisations worldly outlook at the expense of eventually producing a surplus balance sheet, must be ruthlessly avoided.
Some organisations still employ old tried and tested packages like Lotus software for stock exchange portfolio analysis. Others employ a single PC running on ‘scientific workplace’ for mathematical investigations. The golden rule here is: if you don’t need it don’t buy it.
If smaller pension funds decide to outsource part of their operations, it is very essential they ensure contracts are not just carefully planned in isolation but consideration given to what happens at the end of the contract
The IT market pace is explicitly technologically driven. Both computer scientists and organisational executives reiterate similar themes; “We managers don’t know what we want.”
Indeed with the new varied and complex technologies in the market computer scientists find it hard to differentiate between technologies, compilers, interpreters, object orientation, packages such as Java, applets, aglets etc.
With a myriad of tools and vendors capable of producing magnificent solutions, scientists find themselves not only in a maze but also loosing track of objectivity.
A pension fund manager should continuously have informal and formal nitty-gritty discussions with the IT adviser on all business facets and not just sit back and expect heaven-sent solutions.
Knowledge stems from asking the right questions. The right questions restrict the answer. The right answers eventually develops into an effective strategy for technology specifications requested of the IT expert.
Lack of defining obvious operational specifications required by the developer is one of the chief problems of unsatisfactory performance of systems developed for organisations.
Packages delivered should be flexible enough to solve current requirements and also adapt to future expansionists’ specifications of the organisation.
In terms of updating existing technological systems, the number one question a manager asks is “If I do not have any tool (i.e. computer and software) for this particular task, would I purchase this tool that I am now advised for updating”.
Pension managers should ask IT advisers to state all advantages in literal human terms. They should also see through suggested and sophisticated technological solutions such as speeding up an existing ICT solution, cleaning up dormitory databases or other state-of-the-art technologies.
Evaluation guidelines offer a comprehensive way to evaluate and to compare each adviser software package.
Before finally deciding on one IT system over the other, managers should take time to distinguish between vendors and learn from their various strengths and weaknesses.
A concise look should be taken at customer profiles of an adviser in order to determine how well they implement suggested advises.
The following questions can serve as a cutting edge for assessing ICT advises given:
o What tool functionality is needed for this application? Does it provided flexibility in adding data fields or implementing new business processes?
o What is the change in security and workflow aimed at for this application?
o Are the software and hardware technologies compatible?
o Does this technology allow you to sell product services?
o What is the difference in workload after introduction of this application?
o Predict how many people I can save after introducing this application?
o Can new and existing tax and accounting systems be integrated with the new technology?
o Are the principles of good modularity, understanding uniformity and documentation upheld?
o Is the system fast enough, reliable, easy to use and inexpensive?
o Are there adequate training and maintenance procedures that can be independently understood by the user?
o What if a website is introduced, how many people do I need to maintain it?
o Also how many people would you be willing to pay for maintenance of information if it were made available via some other medium, like a newsletter?
o Compared to the five top vendors in the world (Microsoft, IBM, BroadVision, OpenMarket, and INTERSHOP) How many companies employ their applications (ie customer profile)
o What do other independent and helpful advisers say?
At the end of the day, the onus lies with managers who by identifying efficient and proven adviser track records in line with business operations ensure that the organisation and careers are prevented from being used experimentally. Valuable tools are still just tools. New technologies alone won’t guarantee an organisation’s success except if relevantly adapted.
The basic common sense approach still works!
Nico Top is managing director of Practis Consultants in Gorinchem in the Netherlands