After 15 years of service, the record-keeping system used by theretirement services division of American United Life had run itscourse. It had served the company well, but lacked the flexibilityto help the company maintain its strong position in the 401(k)market.

“We were getting a lot of pressure from our agents and ourcustomers to offer more products and to have some flexibility inour pricing,” said John Bilo, vice president of accounting controlfor the retirement services division at AUL. “We had to look toupgrade our system or go outside.”

One of the problems with the old system was the limited numberof funds it could offer. Research found that OmniPlus from SungardEBS could offer 800 funds. (This lack of flexibility goes back tothe original software. Rather than the original manufacturermaintaining the system, it became AUL's job-this probably kept thecompany from adding functionality to it, according to Bilo.)

Still, the company explored the possibility of makingimprovements, said Stephen Davis, vice president of systems for theretirement services division. “We found that it would take as muchor more work to bring the system to the level we needed, and therestill would have been a huge gap compared to what other [companies]offered. We performed a detailed analysis of doing it ourselves andfound it would have taken more time and more dollars to meet ourobjectives for the same thing we could have had built for us.”

Bilo said AUL went looking for software providers, but found alimited number of systems available for their needs. “We looked atothers, but there were not a lot of options out there,” he said.“Some were ruled out almost immediately because they couldn't scaleup to our needs. There was not a lot of competition out there.Sungard was by far the most robust system, so it was either do ityourself or go with Sungard.”

After selecting OmniPlus, AUL had to decide what businessrequirements to add to the process. “We could see where there weregaps and there had to be some programming done,” said Bilo, who isalso the project manager for the implementation of OmniPlus.

OmniPlus has multi-lingual and multi-currency capabilities,making it a good fit for both national and international companies.It offers comprehensive transaction processing, proprietary linksfor the execution of trades, deposit reconciliation, integratedimaging and workflow, commission calculations, annuity andinstallment payouts, comprehensive management reporting, andbrowser-based call center solutions.

The building process gave AUL an opportunity to look at some ofits business practices to see how effective they were. “We lookedat it both ways,” said Davis. “We could either change the way we doan aspect of our business, or have Sungard change the way thesystem operates.”

Bilo said one of these decisions came in the flow of money toAUL. In the past, the company held on to unallocated funds, but theOmniPlus system didn't work that way. “The system said if itcouldn't allocate money it would return the money right away,” saidBilo. AUL opted to change its own business rules to keep therecord-keeping cleaner.

Although AUL can't match dollar value with some of the largerinsurers, it is consistently among the leaders in adding new plans.The large number of accounts has made the changeover tricky. AULlooked at what segments of the record-keeping could be done onOmniPlus and on its old system and rolled those out first. Thefirst two segments were handling reserve funds and imagingworkflow. So far, those have worked well on OmniPlus, so others arebeing added to help make the final rollout for new businessseamless.

“The rollout has been extremely well run,” said Bilo. “Imagingand workflow don't always work as well as they have with thissystem. Everything has been on time and on budget and the userslove it. Even the actuaries are tickled pink, which is rare.”

A training plan has been set up with representatives from AULand Sungard. As the company slowly implements the OmniPlus system,Davis knows there is still a lot of work to be done. “There will besome medium and some major issues that will need to be addressed,but the bottom line is, so far so good.”

The Company: American United Life
Net income: $80.3 million
www.aul.com

The Product: OmniPlus from Sungard EBS
www.sungardebs.com