Conference Room Group Reviewing Financials

You’ve chosen a new system and vendor, and now it’s time to start conversion. These steps can help guide your implementation process through the first year.


Five Key Steps for a Successful Financial Institution System Conversion

  • Janine Wright
  • 9/17/2018

While selecting a new system for your financial institution can be one of the most significant decisions your management team will make, successfully implementing it can be one of the most challenging projects your staff will undertake. Change can be difficult under any circumstance, especially when it involves a critical system. However, with a carefully considered plan, dedicated resources, and an experienced project manager, a system conversion can be a relatively smooth process.

Once you’ve signed the final contracts for your new system, the conversion process can begin. Plan for the conversion process to take at least 6 to 12 months from start to finish when you follow these key steps.

1. Begin with a plan

The success of a system conversion is dependent upon a detailed plan that guides your team in a clear direction from the start. The plan should provide specific details regarding the activities, resources, responsibilities, and target dates for the conversion process, including internal and external factors. You should also plan to measure and monitor all tasks and identify, manage, and mitigate any risks. Your plan should include the following steps:

Create a conversion committee

Form a committee that represents all areas of your institution. This is often the same committee that helped select the new system. Ensure all committee members have the knowledge, skills, and time available to carry out the conversion tasks.

Your institution’s management should also be involved and committed from the beginning.

Assign a project manager

Designate a representative to serve as the conversion project manager on behalf of your institution. This individual’s role will mirror the vendor’s assigned project manager and will help keep things moving forward. It is important that management also take ownership in the process.

Hold a kickoff meeting

Conduct a kickoff meeting with the conversion committee to set expectations and ensure understanding of next steps. Discuss overall goals, expectations, and timelines. Review critical areas such as network and equipment, staff resources and capabilities, system features and functionality, communication, and training to ensure adequate resources are available.

Gather your data

Review the final contract and supporting documents for the new system, along with the vendor’s conversion and implementation plan, to verify understanding of key contract provisions and other critical success factors.

2. Evaluate and communicate

An evaluation should be completed to ensure data from the current system is ready for the conversion to the new system. The evaluation should include a review of data conversion procedures and data mapping, along with a process for validating converted data. The insights gained through an evaluation will help identify potential threats to the conversion process. Communicating internally with those directly involved in the conversion, and externally with those directly impacted by the conversion, will also help to eliminate any surprises.

Establish weekly meetings

Set up project teams (e.g., front line, back office, lending, marketing) and establish weekly team meetings. These meetings will help prioritize the project and keep the committee informed of the status. Any issues that need management resolution should be addressed and communicated. You’ll want to meet more frequently as the go-live date approaches.

Communicate repeatedly

Develop conversion communications (e.g., internal, external, and vendor) that provide essential information. Internally, communications should orient staff to the project plan. Externally, communications should provide detailed information about the impactful changes that will be a part of the conversion. Notify current vendors that have systems being replaced that you are officially terminating their service(s). Keep in mind, regardless of how well you communicate, there will always be questions.

3. Develop buy-in

A successful conversion relies on preparing your staff to stay engaged during the process. You can help by celebrating milestones that show the measurable progress being made. Additionally, recognize staff who are working diligently, thereby increasing the visibility of the project. Take advantage of training opportunities throughout the process to make the transition go smoothly.

Establish staffing requirements

Have a plan for addressing staff vacation and time-off requests, along with the hiring of new individuals who may not be immediately needed. Recognize that these scenarios may be required during the conversion process, and being understaffed will likely make the conversion more challenging.

Incorporate training

A well-prepared staff can make for a smooth conversion. You’ll need to confirm understanding of training and implementation requirements for resources, timing, and expectations with your vendor. Staff training is critical leading up to the go-live date — all team members should understand the full capabilities of the new system, have the knowledge needed to use it effectively, and be provided with a specific training plan that includes the time needed to complete each task. Inquire on the availability of a test system that staff can use for training to further enhance their understanding.

Establish subject-matter experts

Identify key subject-matter experts to serve as trainers. These experts can help prepare training materials and conduct intensive training sessions for other staff.

4. Test thoroughly

A critical step in the conversion process is testing and data validation. Take the time to clean up data in your current system so that the new system can be as accurate as possible. Compare tests and reports from both systems to ensure the new system can generate the reports needed for analysis. Then review criteria outlined to ensure proper safeguards are implemented to protect sensitive information and that risks are mitigated. Each team should determine who is responsible for performing testing, which test results are acceptable, and the steps needed to remediate a problem.

Create a change document

Having the ability to clearly view individual changes can make it easier to foresee the entire process coming together. Create a change management document for vendors and major internal processes. An effective methodology will aid in mitigating issues.

Monitor the vendor

Participate in vendor calls to ensure critical tasks are being completed, and oversee preparation tasks to ensure timelines are adhered to according to your conversion plan.

Perform a pre-conversion assessment

Complete a detailed pre-conversion assessment to ensure that required tasks have been completed and appropriate system controls have been identified. This assessment will help to smooth the transition and identify critical issues that must be addressed prior to conversion.

5. Convert and assess

Often the most critical and challenging step within a system conversion is the actual implementation of the new system. Conversion to a new system should be a combined effort involving institution staff, vendor personnel, and outside resources, as needed, to support the conversion plan. Meetings should be held daily starting on the go-live date and continue until all documented issues have been resolved. Once the system conversion has been completed, ongoing vendor management should be incorporated.

Convert to the new system

Immediately before and after the conversion, monitor progress with regard to the plan. Create an executive summary to track any outstanding issues, and participate in meetings to report status and ensure conversion activities are completed to your satisfaction.

Dedicate resources

Anticipate a higher call volume once the new system goes live. Plan to have an increased number of staff on hand to respond to inquiries. If available, consider short-term call center assistance through the vendor or a third party.

Perform a post-conversion assessment

A post-conversion assessment should be performed once the conversion process has been completed. This should include a review of the new system to verify that requirements are being fulfilled and that the system is functioning satisfactorily. Identify specific strengths and shortcomings, and develop an action plan to address any concerns.

Perform ongoing vendor management

Dedicate sufficient staff with the necessary expertise, authority, and accountability to oversee and monitor the vendor based on the level of risk and complexity of the relationship. Conduct periodic performance reviews and service level agreement tracking to determine whether the existing contract is meeting your needs.

How we can help

If your institution has selected a new system and is approaching a conversion, we can help. CLA’s technology advisory and strategy team has developed a conversion services methodology for financial institutions directly aligned with industry standards and best practices. Our professionals are well-versed in conversion planning and the integration of people, processes, systems, and infrastructure and can help you achieve your critical success factors.