Computerization of cooperatives

FAITH, HOPE AND CHARITY

Ka IkingSeñeres

Computerization does not necessarily mean automation. However, automation could mean modernization if it is done properly. Basically, computerization means using a computer to replace a manual task. Putting it another way, computerization is also the transition from analogue to digital; therefore computerization is also the same as digitalization. By definition, automation means the process of doing something without any manual intervention; therefore automation is also akin to turning something into an automatic process. Taken collectively, computerization and automation would cause the transition from old ways to new ways; and that is the reason why it is associated with modernization.

If computerization is not done properly, it would have the minimal effect of replacing a manual typewriter with a personal computer, and nothing more. To some extent, a spreadsheet program like Microsoft Excel could replace a paper worksheet, but that would also be like replacing a ballpoint pen with a word processor. The better alternative of course is accounting software like Microsoft Great Plains because it would automatically produce balance sheets after manually encoding the data fields. By comparison, Excel would computerize the accounting process, Great Plains would automate it. Assuming that this would cause a complete departure from paper based processes, then it could be said that it would already have the effect of modernization.

The cooperatives law is a good law, and there appears to be nothing wrong with it now. According to that law, the members and officers of cooperatives are supposed to hire professional managers to run their organizations. In actual practice however, this particular provision of the law is not being followed by the majority of the coops, because they would rather hire their own relatives and friends as managers. That is not the only problem, because there is another problem, and that is the lack of management software that could put their businesses in the right order.

The other mistake in the practice of many coops is that they allow their board members to also serve as the line managers, therefore laying the ground for conflicts of interest. This also happens the other way around; they allow their line managers to serve as board members. Aside from problems about conflicts of interest, this practice also weakens the systems of checks and balances that are important in any organization that has accountable funds. What complicates this further is the lack of good accounting systems.

In order for the coops to increase the accountability and efficiency of their systems, it would be best for them to computerize their operations, going all the way to automating and modernizing all of these systems. Office automation is just a starting point, because they should also move up to factory automation if they are making anything of value. Needless to say, they should also move up to electronic commerce. As the saying goes, if businesses do not go into e-commerce nowadays, it is as if they are not going into commerce at all.

Out of the 30,000 estimated numbers of coops in this country, only about 10,000 are said to be viable, meaning to say that these are relatively well managed. It appears that these viable coops have either professional managers or computerized systems or both as the reasons for their success. The bottom line here of course is good training, specifically management training and computer training. Fortunately, many organizations have offered to conduct these training programs, among which are the Asian Institute of Management (AIM), the French Chamber of Commerce (FCC) and Microsoft Philippines.

The offers of AIM and FCC came separately, the former involving foreign graduate students in the Philippines and the former involving French graduate students who will come here to fulfil their internship requirements. These two groups of students will not only conduct management training, they will also teach the coop members how to prepare financial reports and feasibility studies. These two types of documents would be useful in applying for loans from banks and other financial institutions. Of course, these documents could also be used in reporting to all the coop members, a factor that could also improve accountability.

In the final analysis, computer software applications are just management tools that could improve management practices. The basic requirement is still to have good professional managers who would know how to use these tools. This could be a chicken and the egg situation, because it is also possible that computer software could also enable some managers who are not too good, to become better. What is also important is for the data to become transparent to everyone, so that the managers will be always on their feet, careful always to report properly and regularly to the members and directors.

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