Conversions

Conversions include major changes to existing applications or systems and the introduction of new systems or data resulting from corporate mergers or acquisitions. Conversions involve complex system changes that typically span multiple platforms. The elevated complexity increases risk levels that require detailed, systematic controls. Strong conversion controls are critical for preventing data corruption, performance degradation, and operational disruptions. Poorly controlled conversions can result in security or accounting problems, user or customer dissatisfaction, or reputation damage.

Conversions impact operational activities; therefore, management should closely evaluate all technology operations and determine if a proposed conversion is feasible and supports organizational objectives. Successful conversions require management to use a number of control disciplines including strategic planning, project management, requirements definition, testing, implementation, contingency planning, vendor management, and post-implementation reviews.

Conversion controls should include documented project plans, structured project management techniques, and comprehensive senior management oversight. Institutions often implement major conversions using a project management methodology similar to the SDLC process described in the Development section. All institutions engaged in frequent acquisitions or mergers should use standardized conversion methodologies implemented by specialized conversion teams.

Effective conversion management begins with due diligence that includes a comprehensive analysis of a conversion's impact on existing operations. Management should assess current and projected transaction, data storage, communication, and processing requirements. Managers should carefully assess increased demands for balancing, reconcilement, exception handling, problem resolution, user and customer support, network connectivity, and system administration to ensure they are able to effectively complete conversions.

Organizations should also consider training requirements associated with conversions or major hardware/software upgrades. Management should evaluate the type, volume, and timing of training needs for each affected business unit and coordinate training programs with applicable vendors.

Successful conversions require close cooperation within an organization and between an organization and its vendors. Management should establish communication procedures, reporting requirements, and lines of authority to ensure they can make and communicate decisions quickly.

Successful conversions also require detailed file mapping. Technical, operational, and business unit personnel from all organizations involved in a merger or acquisition may be required to assist in the mapping process. Organizations should have a comprehensive knowledge of products at both institutions so they can map and transfer data from the converted institution to the surviving system. Failure to map files and accounts appropriately can result in customer or employee frustration, compliance issues, reputation damage, and possibly the loss of customers. All conversions should include adequate testing.

 

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