Is the son of ISIS in trouble?

The latest strategy in action emerging from Mount Street's mandarins reads like a poor assignment from a first year business student. ILCU has managed to convince its members during its annual town hall meeting to let it spend €4.5m of their money on yet another ill-conceived IT system development.

Firstly it’s important to understand it’s not what technology may do but what matters is the use it is put to. Studies have analysed how people use technology in ways not originally intended or at least not made explicit in the IT business case.

ILCU’s latest venture is a classic case study in wool pulling techno babble hiding the real strategy underneath Techie jargon. Feeding a rich diet of project governance, management and the meaningless phraseology beloved of IT people, it believes it can fool all of the people all of the time. But not it seems a growing body of credit unions that have once again sussed the real ILCU ambition and are withdrawing support and funding. Well done to all concerned for calling what is becoming ISIS mark 2.

The game is up. Sold as a benign, value add, secure data network over which data would stream and products and services are to be delivered the real intent behind the technology has been outed. ILCU want to own a gateway to credit unions, dominate and thus control providers assess to them and control product development. It’s a classic distribution control strategy where the gateway owner sets the terms and conditions for both credit unions and their service providers. Everyone would be locked into the ambitions and designs of ILCU.

Thing is a secure data network ain’t a bad idea if its owned, governed and managed by a reputable IT provider whose only objective is to provide, operate and manage the network. But ILCU hasn’t set its project up in this way and has no intention of losing control over its ownership and use.

Apart from gateway control ILCU has a more serious intent. By constructing a BIS or MIS ,what it calls Business Intelligence, it will build a central monitoring and control system. The question becomes why do this?

The answer is all too obvious when its in-system regulatory, stabilisation and central treasury ambitions are factored in. In short the League wants to become the corporate head office for credit unions that will be forced to cede autonomy becoming more like branches of a co-operative banking system.

Is this a bad thing? Maybe not. If the clear strategy and intent is for Irish credit unions to adopt a federalist model then a central corporate body will be needed. The problem is of course ILCU can never be that body at least not in its current form, structure and governance. It doesn’t have the organisational independence, competence or financial resources to deliver nor at this time has it the necessary legal framework within which to deliver. It probably thinks it does. Once the new Central Banking Commission gets wind of what it’s up to its gamble to spend millions of money it does not have on a system that only some will use will probably grind to a halt.

In fact one of the reasons why credit unions haven’t developed centralist co-operative supports is because of the existence of the ILCU as a body. It has a life of its own, a structure and system that is separate from and distant from credit unions. They may own ILCU, may vote on its direction and its permitted activities but it is an independent entity with it own purpose and ambitions. It’s why it always fails to deliver on big projects and will fail in this one too. It has no credibility with the credit unions that matter.

So far there’s no sign of the Financial Regulator who should have a legitimate oversight role in ensuring an important IT system is funded, developed, governed and managed by a competent recognised IT provider. Such is the importance of such systems that they pose significant systemic risks of their own right.

There’s many a slip between cup and lip and grandiose promises to deliver have fallen foul of ability to deliver. It seems that the latest plan is already running behind schedule and in danger of stalling.