Jan 01 1999

Information Technology and Management Structure II: Insights for Credit Unions

Report  
Number  
41

This report explores the relationship between information technology and the management structure of a credit union.

Harold O. Fried
Professor of Economics
Union College
George A. Overstreet, Jr.
Professor of Finance
University of Virginia
Report Number 41

Executive Summary

The topic of the 1998 Filene colloquium was "Information Technology and Management Structure." This colloquium focused on the interplay between information technology (IT) and the products offered by credit unions, back office support functions, and the structure of management. This is the second of two reports based upon the results of the colloquium.

What is this research about?

The first part of this report describes new organizational structures. The second part is a critique of organizational structures, followed by a discussion by the Colloquium participants. The third part discusses the organizational impact of information technology. The conclusion from the three parts of the report is that innovation must occur around the member. Thus it will vary upon the membership. Managers must first understand their membership and then formulate a consistent technology strategy. Also, this study provides a point of reference from which credit union managers can explore what is the appropriate role of technology.

What are the credit union implications?

A central theme in this report is to innovate around the member. But credit unions have very different fields of membership. The implications of putting the member first will vary depending upon the credit union. A credit union that serves a high tech insurance company will use technology with a member focus in one way, whereas a credit union with a community charter will use technology with a customer focus in another way. A challenge for credit union managers is to understand their members and formulate a consistent technology strategy. This study proves a structure that credit union managers can use to explore the appropriate role for technology in their particular contexts.

This report is sponsored by the Center for Financial Services Studies at the McIntire School of Commerce, University of Virginia and the Center for Credit Union Research at the School of Business, University of Wisconsin-Madison.