"Applying an Open Source model to a microfinance application is a very innovative approach to tackling the severe cost pressures in the microfinance sector. It helps MFIs (microfinance institutions) profitably extend their reach to poor communities," says Lee E. Tenny, managing consultant, IBM Global Business Services, Financial Services-Strategy & Change.

After it jotted down its goals, Grameen Koota identified a solution: Mifos, an Open Source management information system designed specifically for the microfinance industry. Mifos, developed at the Grameen Technology center in the US, with help from IBM, allowed individual MFIs to modify the software to their needs. It also provided the key functions required by a MFI including client management, loan and savings portfolio management, loan repayment tracking, fee and savings transactions, and reporting.

For Grameen Koota, the journey to implement Mifos has been an arduous one, partially because the institution also played an important role in developing the solution further.

The challenges were on two fronts: migration and training. Legacy data needed to be rediscovered or corrected before it could be migrated -- from 44 centers spread across 13 districts -- onto Mifos. In the meantime, training manuals and infrastructure had to be created.

"Transforming all the data into the new format was really challenging. We had about 120,000 deviations," remembers Krishna. For example, there were loans in the old system that showed up as a late payment, but Grameen Koota said there were not. So, loan repayment schedules had to be regenerated. "We needed to migrate all the data, but since the transaction history [of a loan] was not part of the earlier application, we had to run an intermediate script and get all the data in place, then put it into the format required for Mifos. Though nothing was lost it, took quite a bit of time to migrate," he says.

The migration needed to be done branch by branch. For a while, each branch used both their existing system and Mifos in parallel. Each week, data was re-migrated to Mifos on the day when no meetings were held. This was done to capture any changes made in the legacy system during the week, since Grameen Koota didn't have enough staff to enter changes on both systems. This introduced performance issues because with tiny payments every week the database kept expanding.

In retrospect, some people associated with the project think it would have been easier if the migration could have been done with a merger tool and a separate migration tool.

Training everyone on the new software would also take away much mindspace. Training was done inhouse, but in a staggered manner, across the centers. "We took training sessions at many places, clustering some branches and training one set of people at a time. Over the five months that it took to migrate, half were trained, and then they trained the other half," Krishna says.

The team quickly set up a help desk to aid with issues during dry runs. Its aim was to identify operational issues and rectify them. Documentation of all processes was also carried out in this phase. Since Mifos is an Open Source application, every step needed to be documented and updated on the Mifos site, so that other users could benefit from new customizations. To play safe, Krishna hasn't yet pulled the plug on the old system. "I have not removed our legacy software even now. So far, nothing has happened and I plan to go ahead with only Mifos now," he says.

What helped, everyone agrees, is that the ground was ripe for user acceptance and users and the IT team were enthusiastic.