Early last year, Central Alabama Electric Cooperative undertook the kind of change that has made individuals and businesses nervous ever since computers became an essential part of our daily lives.
Central Alabama Electric replaced the software it was using to manage pre-pay, an important service for many members. The co-op switched from a vendor it had been working with for years to SEDC, which was already providing the co-op’s customer information system software.
“We decided to switch to stay in the family because there was tighter data integration,” says Scott Lee, Central Alabama Electric’s director of information systems. “Switching data from one system to another was easier.”
Deciding when to significantly upgrade software, or even switch vendors, can be a difficult choice, involving training, expenses, and—potentially—major headaches if it doesn’t go well.
“It’s important for every cooperative to continually evaluate the effectiveness of their software systems and determine if those systems are adding value to the efficiency of their teams,” says SEDC Chief Executive Officer R.B. Sloan.
But Lee, Sloan, and other IT specialists note it’s equally important to recognize when a change is necessary and can bring benefits. They point to several signs that it might be time for a co-op to upgrade its legacy software.
Poor integration between different pieces of software can be a key indicator.
“When you see glaring inefficiencies like the redundant entering of data, the inability to get or easily transfer data, that’s probably telling you that your technology doesn’t have the capability you need,” says Vern Dosch, CEO at National Information Solutions Cooperative (NISC), which, like SEDC, provides software solutions for cooperatives.
Co-ops can acquire software for different tasks from separate vendors—what’s known as a “best-in-breed” approach—or they can acquire all-in-one software suites that integrate several applications.
Dosch and Sloan say an integrated suite of apps can simplify operations and significantly reduce the costs of managing and integrating software from several vendors.
“Truly integrated systems offer benefits that are realized by both the cooperative and their members,” Sloan says.
Tim Peede has been working in IT for 38 years and sees the other side of the coin. Now vice president of information technology at Dunn, North Carolina-based South River Electric Membership Corporation (EMC), Peede installed systems and handled software upgrades on the vendor side before moving to the customer side of the business.
The advantages to the best-in-breed approach include the ability to customize an approach to match a co-op’s needs, he says.
“But integration is the key.”
Another sign you should consider an upgrade is frustration with consumer-facing software, especially if your consumer-members are requesting functions your current systems can’t provide, Lee says.
“As a lot of our customers get younger and younger, they’ll let you know upfront, ‘Why do I have to come to the office to sign paperwork?’” he says. “They want to do all their business, or as much as they can, on an app or a phone or an iPad or computer.”
Co-ops need to recognize that when it comes to customer information systems, consumer expectations are being set by the Amazons and the Ubers of the world.
“We’re continually looking at how our software works for our members,” Lee says, “continually looking to see what advantages different offerings can bring to our members.”
For example, the co-op’s pre-pay software is tied into its customer information system, so members can get text messages when they have a certain amount of their pre-payment remaining.
Downtime or declining productivity
For co-op-facing software, increased system downtime and declining productivity are clear indicators your software is due for an upgrade.
Software can get bogged down over time by patches and stray or broken pieces of code. In some cases, smart grid technologies can also overwhelm systems or make it difficult to take full advantage of a system’s capabilities.
Lee notes that outdated software can quietly steal employee efficiency, especially with the demands put on today’s co-op staffs.
“It’s important to look at the inward-facing software that our employees are using because they’re being asked to do multiple jobs at the same time,” he says. “And if you’re cross-training people to be billing clerks and customer service agents, you need software that operates quickly and makes their lives easier.
“Those are situations where you don’t really have to have upgrades, but if you’re about making your employees’ lives better, then they can be a ‘have to.’”
Expectations for software also change as new features become available. IT professionals point to mobile functionality, often through a phone app, as an example of a now-essential component for many employee- and consumer-focused systems, which wasn’t a priority only a few years ago.
“Feeling handcuffed” by the limited functionality of your software is an obvious sign that it’s no longer serving your needs, says South River EMC’s Peede.
Incompatibility or discontinued support
If your software applications can’t run on the newest operating systems, Peede notes, it can mean an upgrade is needed.
“The most recent version of Windows is Windows 10,” he says. “But there are still co-ops out there that are running Windows 7 because their software versions won’t run on the new technology.”
Another obvious sign, he says, is “discontinued support by your vendor.”
Like many co-ops, Central Alabama Electric and South River EMC have maintenance and subscription contracts with vendors to provide regular software updates. South River works with ATS, which is a wholly owned subsidiary of SEDC.
But for cooperatives who are operating legacy systems without such support, vendors sometimes essentially force an upgrade by no longer providing support for older software after they’ve released major new versions.
Software that fails to meet the latest security standards is a priority for an upgrade, IT experts say.
“If you look at the top things as far as being safe and compliant in cybersecurity, it’s patching your systems and keeping things up to date,” Peede says.
Analysts note that the increasing sophistication of hackers also raises the necessity of making sure co-op software that includes financial or other personal information about members has protections to reduce the risk of digital theft.
“Security is not an option,” Lee says. “Number one, your reputation gets harmed. Number two, you could be financially liable.”
In fact, a 2018 study by IBM found that the global average cost of a data breach climbed to $3.86 million, with the cost of each stolen sensitive or confidential record at an average of $148 apiece.
Lee adds that high-profile stories of data breaches at big companies have made the security of their personal data a greater concern for members.
“More and more people are becoming educated about cybersecurity, and they want to know: Is your system secure?” he says. “So that’s some of the upgrades we do continuously. It’s just good business to protect your data.”
Considerations when upgrading software
Moving to a major new version of software or shifting vendors to provide a new application can be a complicated undertaking. With many vendors offering different products, Peede emphasizes the necessity of staying focused on the specific needs or improved functionality the upgrade is intended to address.
There’s also the importance, in an industry that has a lot of vendor churn, of making sure you’re dealing with a vendor that will be around in the future. “You’ve got to understand the financial health of the company you’re dealing with,” he says, including whether it is profitable and growing.
A co-op also needs to know how a new vendor plans to handle updates, Peede adds, and be prepared to thoroughly test how the new software works with existing systems.
Finally, he says, the human element cannot be underestimated.
“When you start talking major system upgrade or going to a totally different platform, there’s the training, and people don’t like change,” he says. “That’s a hidden cost, when you figure all the man-hours it’s going to take for somebody to learn that system.”
Lee returns to the importance of integration, especially when migrating information to a new system.
“Some of the challenge is just making sure the data is accurate when transferred,” he says. “You’ve got to make sure the interfaces are accurately developed and you’re getting the information in a timely and accurate manner.”