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Guest Article
by Ann-Kathrin Halvorsen
There is a Norwegian expression that goes something like this: Change makes you happy. In the rapidly changing world of employer sponsored pension plans, however, change is more often a source of stress. Technology has quickly become a vital part of pension administration. Plan sponsors and participants want a wide variety of information quickly and up-to-date. Rapid trading is also becoming the norm in the pension recordkeeping industry. Administrators are asked to provide detailed transaction information available with point and click ease as well as quick turnaround time for all processes. In order to achieve this, TPAs often find themselves investing heavily in new technology; either a brand new recordkeeping system or rapid upgrades to generally proprietary software. This article will address the management of the conversion process that's needed to move up the technological chain. The steps outlined below will encompass the entire planning period after a new system has been decided upon.
The Conversion Team
As soon as the decision has been made to move to a different recordkeeping platform, a conversion team should be set up. This is the team that will be responsible for the entire data migration and implementation of the new system. The composition of the team is critical. You will need someone who knows your existing processes, your current system, and your client base intimately. The team also needs someone with knowledge of the Internet and your telecommunications system to support participants' access through the web as well as voice response (VRU). Integrating your call center with the web or VRU will also need to be resolved by these members. Don't forget to also include some IT personnel on the team from the very start. They will be crucial in getting your system up and running quickly and efficiently. The team's glue should be the team leader. He or she will make sure the project moves along as needed and that all bases are covered. Depending on the size and speed of the conversion, the team members may or may not work full-time with the conversion. Various phases may also require a time commitment from different team members. It is important, however, that you allot a great deal of time for the conversion. In this instance, more is truly better.
You may want to consider bringing in an outside project manager to lead the team. An outsider would bring in specialized expertise and fresh ideas, but it is critical to also include people who know your existing client base and your firm's objectives. Often these people are the very ones you can least sacrifice, but removing them from their normal client work for a relatively short period of time will serve you well in the long run.
In summary, the following areas need to be covered by the members on your conversion team. One member can be responsible for more than one area or one area can be covered by more than one member. The size of the conversion will dictate the number of team members you need.
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Project Manager |
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Web, VRU and Call Center Expertise
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IT Knowledge |
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Processing and
Systems Expertise |
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Client Base Knowledge |
Gaining the Knowledge
During the next phase the team member(s) responsible for the processing element of the conversion need to become familiar with the new system. They should pinpoint areas of the new system that may conflict with existing processes. They should also focus on how clients will be affected by the change. Terminology will change. Reports will undoubtedly look different. Data may have to be transmitted in new ways. If a conflict is found, try to find ways to solve it. However, don't try to force existing processes on to the new system. Workarounds can always be built, but it is generally much more efficient to work within the system. If clients and your staff are informed early on and feel as if they are a part of the conversion process, procedural changes will be much more easily accepted. A flexible attitude will make the conversion much easier.
The Internet and telecommunications expert(s) will also need to be involved in this phase. They have to make sure they understand both the Internet and VRU applications. If these can be modified, this is the time to do it. If possible you should try to make both structures similar to the existing Internet and VRU, but don't force existing processes on to the new system if they don't fit. If possible, a test person should be set up on both the Internet and the VRU. This person should be available for both clients and staff.
Some specific things to look out for include:
Even if the answers to many of these questions are not favorable, you may not have a big problem on your hands. The answers will merely dictate how you handle the plan set-up and data migration. The solution may also be as simple as changing how you receive or report data. If you approach the problem with a flexible attitude, a solution will appear. Talk it out with your conversion team members, staff and clients.
During this phase training materials and supporting documents should be written. Your vendor may provide instruction manuals, but you should create checklists for various processes as well as documentation that take your own firm's objectives and procedures into account. These materials can be used during staff training.
The most important step during this phase is communication. It is vital for the conversion team to meet often to share knowledge and to make sure all bases are covered. This way potential problems or conflicts can be discovered and resolved early. It is also important to perform regular quality checks. The processing guru should for example test and check the VRU and web access to make sure it meets the clients' expectations. A phrase or word that may be clear to your web programmer could easily be misinterpreted by plan participants. The conversion team should also regularly report back to the main department. It's important that everyone stays informed.
Initial Client Communication
Now that the conversion team has become familiar with the new system's opportunities and restrictions, you will need to communicate to your clients that your are planning a system change. This is just the preliminary communication and should take place well ahead of the actual conversion. An informed client is a happy client! A system conversion will result in great changes, but as mentioned above, as long as your clients are informed early on and feel as if they are a part of the conversion process, most changes will be well received. This early communication should include the following:
If feasible, you should call the client first. Then send out some written materials. A follow-up call will be needed a few days after the mailing. There is no need to contact the participants at this point; this is just a preliminary heads-up to the client.
As during the first phase, regular meetings are essential. You will need to check on progress. This is also a good time to share feed-back from clients.
The Conversion Schedule
After the initial communication, you're ready to determine the conversion schedule. Smaller, simpler clients should go first. The experience you gain on these clients will be invaluable for the more complex plans. In addition, the larger and more demanding plans may have special requests that need extra time to program. Also keep in mind that converting a plan in the middle of a valuation cycle may create additional work, as you also may have to reproduce any interim activity. A black-out period may be the answer, but this will have to be communicated to the clients as well as to the participants. You may want to schedule fewer conversions in the first wave, as your staff will have a steep learning curve during this period. The conversion schedule should also be accompanied by a detailed checklist and time-line to be used by the team members responsible for the actual data migration. It may seem excessive, but the checklist should list all the data that need to be loaded (distribution data, inception to date contributions, post-tax bases, loan records, loan history, census information, etc) and when the data migration for each item should occur.
Once you've set the conversion schedule, you will need to notify your clients of when they are due to migrate over to the new system. If possible, include instructions of how to access the test person on the Internet and VRU. You should also present a draft of the participant communication material which the client will need to approve. The participant communication piece should include the following:
As with all the other phases, regular meetings are crucial during this step as well. In addition to the conversion team members, however, other players, such as trusts and staff, should be included. With their involvement it will for example be easier to make sure trading links are switched over and that daily processing is moved from one system to another according to the timeline.
Training the Staff
A short period before the first conversions actually take place, training for your staff needs to be arranged. Off-site training or classes hosted by the vendor give you the necessary expertise, but you should have your conversion team present at all times to point out issues unique to your firm or answer any firm related questions. Also keep in mind that your conversion team did go through a learning period. This knowledge may prove to be sufficient for in-house training if you don't want to pay for vendor-sponsored training sessions.
Focus on the features that you know will make processing life easier. Point out features that will require internal changes, but remember to also list solutions. It is important that your staff walks out of the training sessions with a positive attitude. A "I-can't-wait-to-start-using-this-new-system" outlook will help ensure a smooth transition period.
You may also want to have an open-house period where your staff can try the system out, ask questions, raise concerns, or receive some additional training.
On-going Communication
By now you have started the actual data migration. A few plans may also be live on VRU and Internet. During this phase knowledge sharing and an on-going communication program are crucial. Your department should meet at regular intervals to discuss problems or share experiences. It is important that everyone is on the same page and has the same knowledge. In addition to moving the entire staff along the same learning curve at the same speed, these meetings will foster unity and reduce stress. Also keep the lines of communication open with clients and participants. It is vital to get their comments and use them to make your product even better. Your call center is a good source for participant feed-back.
Conclusion
Even though a system conversion may ultimately leave you happy, it needs to be a closely managed road to happiness. By following the above phases, you are one step closer to a successful conversion. The main things you should include in your conversion plan are:
These ingredients will lead you closer to the apparent bliss that the Norwegians are experiencing.
Ann-Kathrin Halvorsen work as a training and systems coordinator for Milliman & Robertson, Inc. (www.milliman.com) in Seattle. Recently she managed the firm's recordkeeping system conversion.
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