TIAA-CREF Execs Speak on What Went Wrong

In the aftermath of IT breakdowns that denied thousands access to their retirement funds, the organization points to the complexity of platform integration and inadequate customer service training.

TIAA-CREF officials are starting to see the light of day.

After months of near-crippling IT troubles that denied thousands of pensioners access to their retirement funds, caused customer accounting nightmares, and prompted those once-devoted customers to lodge formal complaints with regulatory authorities, officials at the beleaguered retirement fund company have pinpointed sources of trouble and are taking corrective action.

Problems began surfacing at TIAA-CREF (Teachers Insurance and Annuity Association - College Retirement Equities Fund), both internally and externally, in mid-November of 2005, and escalated through February of this year for many customers.

While the company initially sidestepped naming any concrete IT problems as the cause, sources close to the company revealed major glitches stemming from the migration of the companys 30-year-old legacy platform to its new Open Plan Solutions.

David Dunn, lead manager for Open Plan Solutions, in New York, pointed to two glaring issues for the migration: integrating the legacy system with the new platform that, in some cases, led to customization issues, and inadequate training of TIAA-CREFs customer service team to handle the onslaught of calls from some of the 15,000 frustrated and bewildered clients affected.

"Somewhere in that netherland, when you lace 70 systems together and try to get them all to function simultaneously, thats always our biggest risk area and where we spend an enormous amount of resources," Dunn said.

"Integrating that with our legacy environment for those customers that are still on that platform as well" is where the issues stem from, he said. "If were moving clients one at a time, part of their holdings are on one platform, some are on the other, and we need to bridge that together."

/zimages/1/28571.gifRead more here about the problems platform upgrades caused for TIAA-CREF and its customers.

The Open Plan Solutions technology platform is based on SunGard data Systems OmniPlus recordkeeping system, which enables TIAA-CREF to provide individualized retirement options to its academic customers—institutions like Harvard, Yale, Stanford and NYU and many, many others—and their employees.

The company embarked on the Open Plan Solutions path three years ago, when Herb Allison, newly appointed CEO, implemented widespread changes.

TIAA-CREF has set an aggressive timeline for migrating its 15,000 member institutions to Open Plan Solutions: completion by the end of this year. To date, its migrated 290 schools, amounting to 1.8 million of its 3.2 million clients. On one weekend alone, it migrated 30 institutions and 172,000 clients, Dunn said.

Living on two separate platforms, for TIAA-CREF and its customers, becomes infinitely more complex given that an individuals retirement funds can frequently span both platforms simultaneously, he said.

"We feel strongly that we have to move away from this 30-year-old platform," Dunn said.

Once the migration of schools is complete and TIAA-CREF is able to decommission the legacy platform, a good portion of the current problems should go away, according to Dunn. But that decommissioning processes itself will be no piece of cake.

"All the integration points those older systems had, or even into the new platform, you have to shut off all those interfaces," Dunn said. "You have to do that very carefully."

The company is targeting the first quarter of 2007 for its legacy system kill date.

While he is trying to take some standardized framework approaches to the Open Plan Solutions architecture, Dunn said the companys aggressive migration schedule can present some challenges.

"We are moving the Web forward and at the same time developing the Web," Dunn said.

And while TIAA-CREF is working with technology partners IBM—Dunn has standardized on IBM MQSeries—and SunGard to develop a services-based architecture, its in no way standardizing on a single architectural framework; instead, the company is using four.

"Any case where you have the benefit of a lot of time, where you can do modeling and set up, you might be able to do things differently," Dunn said. "At the same time, we are putting service first. When we run into a problem and we have to put a school on hold, we do."

For this reason, TIAA-CREF is rescheduling about 20 migrations planned for June. While hes giving his much overworked conversion team a weekend off, Dunn said, the functionality team will be working full steam ahead to develop additional reporting capabilities and Web site improvements, and to make it easier for institutional administrators to use the system.

Its about the service

A 25-year veteran at TIAA-CREF, Fran Nolans job is make sure the companys individual and institutional clients are well cared for.

The recent problems, particularly in November and December, were a real awakening for Nolan, as the executive vice president for Individual and Client Services.

"When we slipped last fall, even though it was for a certain number of our clients, we rocked the boat pretty hard," Nolan said, in New York. "The reactions we got from some of our clients when we made a mistake were very strong—appropriate, but one would wonder if they had a problem with a bank or another firm, if [there would be] as much behind it?"

Nolan said she is "terribly sorry" for those individuals or institutions that did have bad experiences, and that the experience for her reinforced how critical a role TIAA-CREF plays for its clients—and how important it is to live up to their expectations.

To this end, Nolan, along with Dunn, has set up new cross-functional teams to catch issues before they escalate.

"What we werent doing in November and December that were doing now is to have what we call a client resolution room," Nolan said. "If something doesnt appear right to a client, we take [the issue] in a room where we have different skill sets all sitting together, to figure out, Is this a problem for [an individual account] or might this have implications [for] other solutions?"

Nolan is also in the midst of retraining a national team of customer service agents, and has received funding to hire more.

/zimages/1/28571.gifHave TIAA-CREFs problems been solved, or are there still storm clouds on the horizon? Click here to read more.

As the problems escalated with customers last fall, so did the issues with customer service agents. When a company introduces change or evolution, with new systems, processes and procedures, there is always an adjustment period, according to Dunn.

"Training itself is a complex issue," he said. "Our environment is highly regulated, [so agents] must be qualified and sometimes licensed in the states they operate in to talk about products. On top of that, there are new products, new services. And oh, yeah, the system has changed too. Theres a lot of training we need to pay attention to."

Despite the challenges of migrating, Nolan said she believes that it is the Open Plan Solutions architecture that sets the company apart.

"Its a balancing act," she said. "It might look like we want to finish the project simply because we want to finish the project. The reality is, these clients that have these multiple-plan experiences, Id like to get them on one platform so that I can serve them better. One advantage of the new platform is objective advice and a whole new offering of products."

And while most customers surveyed by eWEEK said they are satisfied that the major issues have been solved at TIAA-CREF, sources close to the company said they believe problems still lurk beneath the surface—and that it will be quite some time before theyre fixed.

"Open Plan Solutions is a black hole that sucks everything into its path at the cost of every other initiative at the company," said one source who requested anonymity. "It will go on for a couple more years—they are not going to finish when they think."

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