Automation of SACCOs - FSD Kenya

34 • AUTOMATION OF SACCOS: ASSESSMENT OF POTENTIAL SOLUTIONS
Connecting the branches is necessary to manage the SACCOs and provide
competitive services in a secure manner. Daily synchronisation of records
would provide management with a view of the SACCO that we consider
necessary to effectively manage an organisation of this type given the tempo
of the marketplace. Anything else creates a lag that decreases the executive
management’s ability to proactively drive performance. Regarding customer
service, a material number of SACCO members travel across geographical
locations and are aware that competing institutions have networks that are
not send to their home locations. There is a tangible risk that members will
exploit any discrepancy in the SACCO records to the SACCOs disadvantage even
though this is illegal.
Currently consolidation has to be achieved by transporting the data on a
physical storage medium or in the best case sending it by email. This is
inadequate not only in terms of timeliness but also due to the manual effort
and data integrity issues this method of data consolidation creates. The scope
of the consolidation includes on average three to ten branches however the
need for connectivity is not limited to branches but also includes interfaces
to external networks such as ATM switches, SMS banking, money transfer
systems and POS devices.
6.1.3 Ability to manage the application
In order to benefit fully from an application it needs to be managed. This is a
fundamental pre-requisite to ensure acceptable system availability, integrity
and to meet business requirements. Currently SACCOs suffer from inadequate
application management and the impact on the business can be seen clearly.
The root causes are probably a combination of factors such as lacking staff
skill and training, vendor support and strategy. Acquiring a new application
or making changes to the current one would not have the full intended effect
unless the following is addressed:
The SACCO needs to recruit and train individuals who can act as system
administrators or at least ‘power users’ (persons who extensively use the
application and develop knowledge beyond that of regular non-technical
users). For large organisations there are economies of scale of consolidating
and even outsourcing such functions. For the SACCOs the cost of the individual
does not motivate it and the benefit of having resources close to the business
to build familiarity and keeping communications simple is considerable. While
system administrators do not need to modify the application’s code, they must
understand the behaviour of software in order to install it and to troubleshoot
problems. This requires knowledge of operating systems and skills required for
software and hardware troubleshooting.
As an expert in the specific application, the system administrator will add
considerable value by creating additional independence from the vendor and
considerably reducing response time to resolve basic issues. The SACCO needs
to compare the investment return of training the internal system administrator
versus relying on the vendor. The vendor might charge to provide service but
the employee can leave the SACCO and if the employee is not fundamentally
capable the training might not yield the desirable results.
The SACCO also needs to ensure that sufficient access to the relevant parts of the
application is provided. This includes all administrator modules, configuration
features, the source code and the database. Without this the SACCO is likely to
find itself dependent on the vendor and will not have the flexibility to build an
internal system administrator function as desired.
The SACCO also needs to ensure that the vendor or a third party is willing
to and can realistically fulfil a service level agreement (SLA) to provide the
support necessary. If the SACCO can plan which capacity it is able to build
internally, and what makes operational and financial sense, it can exclude
this from the SLA and thus reduce costs. The SACCO has basic knowledge of
system administration and the application internally the vendor can focus on
the complicated issues and providing additional capacity.
6.1.4 realising organisational and behavioural change to
utilise the system
The benefit of a system is dependent on each user’s willingness and ability to
use the system. Automation or improved automation will result in significant
change to each person’s working environment, tasks and job description.
To ensure acceptance and that employees proactively identify and pursue
the opportunities it brings, the management has to be conscious of this and
plan accordingly. The starting point for the SACCOs will be to ensure that all
users reach the required basic computer skills. This includes using a windows
based PC with accessories. Then they need application specific training and
finally training with regards to how the application is aligned with the SACCOs
business processes, strategy and their incentives. With regards to incentives it
would be logical to reward e.g. loan officers who can reduce delinquency or
collections offices who can recover delinquent loans with extra pay.
The vendor is expected to support the implementation with regards to
application training and integration with the SACCOs operations. Basic
computer literacy skills do not necessarily need to be provided by the vendor
as these are generic. The management will need to support this entire aspect
closely to ensure that the application is adapted to the SACCOs strategy, not
vice versa, and that the training component is sufficiently adapted to the
SACCOs specific needs.
Change management
A successful automation does not only build on finding the optimal system
and building it. It is also highly dependent on aligning the system with the
organisational structure and the employees. As the SACCO changes with