SETTING THE STAGE

While Integra's Loan and Mortgage Insurance product proved to be a huge success in the province of Quebec, the company faced major impediments in its quest to commercialize its leading product in the rest of Canada. One reason for this difficulty is that the Canadian banking sector is fragmented along two basic modes of organization. In the first mode, which comprises the majority of the large financial institutions, banks operate under a federal charter. This charter gives the participating institution the right to operate anywhere in Canada, whereas a provincial charter grants access only to the provincial territory. On the other hand, most of the small institutions, including the credit unions, operate under provincial jurisdictions. Historically, and for cultural and political reasons, those small financial institutions have tended to structure themselves into very divergent configurations within each province, and the banking infrastructure of each sector differs somewhat. Whereas in the province of Quebec, the credit unions tend to be tightly integrated into large federations and use standardized central banking systems, their counterpart in the other Canadian provinces make do with a bewildering array of banking systems operated at the local or regional levels. As for loan insurance, the CanCoop Life Group, which markets a portfolio of insurance and other non-financial services to Canadian financial co-operatives, Credit Unions and their members, cover most of the loan insurance needs of the Credit Unions. A consortium of companies, including the Credit Union Centrals from each region, a private Canadian insurance company, and one US insurance syndicate, own the CanCoop Group. Thus, because of the diversity of the market in the rest of Canada and the very tightly integrated nature of its own systems in the Quebec market, Integra lacked the means to link the banking systems of those institutions to its loan insurance systems. The company was thus effectively locked out from the loan insurance business in the Canadian market outside the Province of Quebec.

Meanwhile, Intex Consulting, which had developed a widely acknowledged expertise in the US banking industry as an integrator and system developer, had been looking for an efficient channel to penetrate the Canadian banking sector. Informal contacts between Integra's IT executives and Intex Consulting representatives at an IS/IT convention in Las Vegas in December 1995 opened the door for a possible cooperation between the two firms. Indeed, Michael Bricino, Integra's CIO and Carl Gagnon, a senior project manager, came back from that meeting convinced that Integra had the opportunity for a breakthrough on the Canadian market, provided it could join forces with a competent and resourceful IT partner. Upon their return to Integra, the two IT managers made a forceful presentation to the First Vice President for Product Development. In essence, their argument was that "We have a good product, we have the best product! Everybody in the Province of Quebec buys it, the Credit Unions will buy it and the consumers will buy it."^[3] They believed the loan insurance industry was clearly waiting for such a solution, and that the profitability of the project would far exceed any other project that the organization had ever undertaken.

The First Vice President for Product Development promptly assembled an advisory committee^[4] for the project. Apart from the first V.P. for Product Development, this committee was composed of the President, the First V.P. for Finance, the V.P. for Actuarial and Corporate Services, and the CIO.

The pressing issue, according to Bricino, was the development of an appropriate technology solution to interface Integra's loan insurance systems with its prospective clients' banking and loan systems. If the company could effectively develop a compatible solution, then the CUs would most certainly jump on the occasion and join Integra. In fact, as stated in a white paper circulated within the organization at that time, Integra envisioned itself in the role of a commercial software developer. "In the same manner as a producer of high volume commercial software, [with the BLISS project], Integra will become a supplier of a software package specializing in the management and the support of insurance products in Canada and even in all of North America." The ultimate goal was to provide for the insurance needs of the more than 1,200 Credit Unions and other cooperative institutions throughout Canada. Here was an opportunity to easily double Integra's market share in the loan insurance market.

For Donald Lapierre, Integra's president, this strategic opportunity proved to be irresistible and the committee enthusiastically bought into the project. For the members of the new committee, collaborating with Intex Consulting in the venture appeared to be the obvious thing to do, given the complementary nature of each firm's respective competencies, and their convergent business interests. On the one hand, Integra brought to the table a long and very successful experience in the loan insurance business. Furthermore, it had a winning product to commercialize. Conversely, Intex Consulting had a proven loan system to offer and brought along impeccable credentials as an information systems integrator.

^[3]This remark is very similar to the title of a paper written by, Markus and Keil (1994): "If We Build It, They Will come: Designing Information Systems That People Want to Use" which addresses key issues in IS development and system use.

^[4]As the project took form, this committee was later transformed into a more formal Steering Committee.