Financial institutions depend on their ability to process large quantities of information in a timely and accurate manner. For smaller institutions, such as microfinance institutions (MFIs), establishing and managing systems to process information is especially difficult to do. Scarce skilled human capital, limited funds, and a lack of formal, documented, and enforced processes—the building blocks of back office systems—add to the challenge. Getting it right is critical, but it is not easy to do.
Large technology implementations at MFIs are often characterized by repeated changes in scope, budget overruns, and delays, and result in significant functional gaps between what is needed and what the solution can accomplish. These complications are not necessarily due to the technology itself, but rather they often stem from the complex connections technology has with operations and day-to-day management of the institution. Information systems “embed” an institution’s business processes and support its products and services. Changing or replacing the platform, therefore, is much more than a technology project. Technology must be made to fit an institution’s processes and vice versa.
Such projects are often managed exclusively by the information technology (IT) department, with weak connections to the business and little formal communication with the institution’s other units. Approaching the project as an operations or business transformation project, with a core project management team and close involvement across the institution, increases the likelihood of success. Clear processes to solicit input from the business units and allocate decision-making powers distribute accountability across the institution and help ensure a smooth implementation and an outcome in line with expectations.