OpenNet at the ‘Tipping Point’:
ATTENTION SHIFTING FROM BUILDING TO IMPLEMENTING
The what, the why, and the light at the end of the tunnel

OpenNet. Customers have heard the term for a little more than a year Sallie Mae employees have been hearing about it for much longer— beginning with Project Fusion which has grown into OpenNet. But how many of us really know much about it and why its important to Sallie Mae?

Three critical needs are behind the creation of OpenNet:

1. The need to respond to the demands of the marketplace that we be more “open’ in our processes and systems.

2. The need to bring multiple, needlessly redundant and older out-dated systems together into one flexible system with many features.

3. The need to meet our commitment to our customers to provide a superior Web-based product that combines, significantly improves upon, and eventually replaces both Laureate and NetWizard. The schools are demanding openness, which first became an issue in the late 1990s. Sallie Mae promised it to customers in 2001.

Open up

In the simplest terms, openness means allowing a school to connect with any lender or guarantor through a Sallie Mae system, rather than just Sallie Mae preferred lenders and guarantors. Jon Kroehler, vice president, Electronic Services and Product Support, describes OpenNet as “a great product schools can use to interface with all loan providers and one they can use to maximize their direct connection to Sallie Mae.’ Ultimately, the customer will have a single interface with Sallie Mae and smoother, simpler transactions.

The challenge is to allow the system to be open and at the same time build in value-added features that encourage schools to use preferred lenders and guarantors.

“The intent is to offer a superior product that schools will embrace, Kroehler said. “By having schools use our product set, we hope to get deeper penetration in terms of the share of business we have at those school campuses.”
Making this product “superior” means adding some features not available today. “None of the old platforms does everything our customers want. We have to spend a serious amount of time developing other capabilities so that the ultimate system will do everything the schools want it to do,” according to Kim Glass, vice president, Product Development.

“Customers should see OpenNet as the brand wrapped around all of the technology services offered by Sallie Mae that are related to the school’s loan business,” she said.

Because what customers see needs to appear simple and straightforward, behind the scenes much is being done to eliminate complexity. Glass explains that today we have multiple systems for Federal Family Education Loan Program (FFELP) processing, for private credit processing, for data transfer and for Web presentation.

“Our goal is to have one superior sub-system handling each of those tasks, allowing us to provide much better service to customers and to eliminate frustration, expense and complexity for our staff, she said.

More than 200 employees are working feverishly to make that happen. Of course, work on OpenNet must be done while simultaneously maintaining old systems that are still in use and, at the same time, keeping customers happy.

Making progress

What progress has been made on OpenNet so far? Today, most of the development work on OpenNet is nearing completion and deployment has begun.

Last summer saw the somewhat disappointing launch of the File Management System (FMS) component of OpenNet. According to Kroehler, EMS was not released as scheduled and was scaled back due to problems that surfaced very late in the project. The good news is that “since then, FMS has been brought up to where we want it to be, and it is a quality system that we are very proud of and that our customers love,” he said.

Building on the positive, the next stage of OpenNet deployment involved the roll out of Web loan delivery in January of this year According to Kroehler, “This roll-out was just as good as the FMS roll-out was bad. This year’s roll-out was high in quality, on time and represented a feature-rich system.” In fact, this year’s roll-out was a key factor in a significant win with Indiana University, which chose Sallie Mae as exclusive provider of federally guaranteed and private student loans on an interim basis.

The broader OpenNet product is now out of the pilot stage, and schools are being upgraded in groups every two weeks. How are the schools responding? “They love it,” reports Anne Hasseld, director, Loan Delivery Product implementation. Our trainers who work with the upgrading schools report they’re delighted.”

But, she added, “What we built does work now for some schools. For others it doesn’t, simply because they want additional bells and whistles that we haven’t built into the system yet.” These will be addressed, however. OpenNet is available to NetWizard schools now. In November, it will become available to Laureate schools. In both cases the transitions are not just a flip of the switch. We will work along side the schools to ensure a smooth transition.

“The customers want a new system to be different, yet at the same time, they want it to be easy to learn. So were trying very hard to accommodate them,” Hasseld said, adding that making it easy on the customer puts a lot of pressure on the team behind the scenes.

“This year were at the turning point where we’ve got a much of OpenNet built, and now we’re turning our attention to migrating schools to it,” she said. It’s been a long, involved process. To me the headline for 2003 is that we are at a tipping point where we are shifting our attention from the building of OpenNet to implementing it.”

Several additional software releases are required to make OpenNet robust enough to replace every element of Laureate and NetWizard. It is anticipated that by June of 2005, all Sallie Mae customers will be on OpenNet and the old systems will be retired At that point, it will have been four years, the equivalent of a college education, since Open Net was announced at NASFM in Nashville, Tenn. OpenNet “graduation” will be right on time.