TIAA-CREF Dissects the Disaster

Execs point to integration complexity and undertrained customer service agents.

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

Internal and external problems began surfacing at the Teachers Insurance and Annuity Association-College Retirement Equities Fund in mid-November and escalated through at least February for many customers. While the company initially sidestepped admitting to any concrete IT problems as the cause, sources close to the company revealed major glitches stemming from the migration of TIAA-CREFs 30-year-old legacy platform to its new Open Plan Solutions.

David Dunn, lead manager for Open Plan Solutions, points to two glaring issues with the migration: integrating the legacy system to 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 15,000 frustrated and bewildered clients.

The Open Plan Solutions platform, which is based on SunGards OmniPlus record-keeping system, enables TIAA-CREF to provide individualized retirement options to academic institutions and their employees.

TIAA-CREF has set an aggressive timeline—by years end—to migrate its 15,000 member institutions to Open Plan Solutions. To date, the company has migrated about 290 institutions, representing 1.8 million of its 3.2 million customers.

Once the migration of schools is complete and TIAA-CREF can decommission its legacy platform, many of the current issues should go away, according to Dunn. But decommissioning 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," said Dunn in New York. "You have to do that very carefully." The company is targeting the first quarter of 2007 for its legacy system decommissioning.

Although he is trying to take some standardized framework approaches to the Open Plan Solutions architecture, Dunn said TIAA-CREFs aggressive migration schedule may present challenges. "We are moving the Web forward and at the same time developing the Web," said Dunn.

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, Web site improvements and ease of use for institutional administrators.

Fran Nolan, a 25-year veteran at TIAA-CREF, is in charge of making sure the companys individual and institutional clients are well-cared for. The recent issues were a real awakening for Nolan, who is 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. She said that as much as she is "terribly sorry" for those individuals or institutions that had bad experiences, the experience reinforced for her how critical a role TIAA-CREF plays for its clients—and how important it is to live up to their expectations.

To do so, Nolan, along with Dunn, has set up new cross-functional teams to catch issues before they escalate. She is also in the midst of retraining a national team of customer service agents and has received funding to hire more.

As issues escalated with customers last fall, so did issues with customer service agents. "Training itself is a complex issue," Dunn said. "Our environment [requires] highly regulated [agents who] 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."

While most customers surveyed by eWEEK said they are satisfied that major issues have been solved at TIAA-CREF to date, sources close to the company said they believe problems still lurk beneath the surface."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. "They are not going to finish when they think."