BizAZ Magazine - Jul/Aug 2006

Get IT Right

by Jane Larson

(from article page 3)
A global competitor takes it out-of-house

Stephen Inocencio was staring at a very expensive move to the next level of IT. His employer, IPS-Sendero, started with seven employees developing software to help banks and credit unions with their planning, accounting and risk management. Rapid growth swelled the staff in Scottsdale to more than 100, along with 50 servers and an 11-person technical team.

But some of the technical personnel were doing more than one job, and clients were asking for more services and faster network connections. With seven international sites, the company also needed technical expertise around the clock, seven days a week. And being in the financial services industry meant the company's technology had to be completely reliable. "We needed to grow up and have a data center," Inocencio says. "But we don't have millions of dollars just sitting in liquid cash."

Inocencio, the manager of technical consulting and engineering, figured the build-out of a data center, telecommunications connections, backup generators, redundant UPS systems and staffing to run the data center would cost $2.7 million. Extra employees would add more to the cost. So he began looking at the managed services route, where some information technology would be outsourced to an outside firm. It would be a big step for a company that prided itself on developing and controlling its own technology.

It took more than a year for Inocencio to document his recommendations, come up with a request for proposals and sell the plan to senior management. IPS-Sendero signed a contract with Tempe-based Ensynch in March 2005 and began a phased-in implementation. After each phase was completed, he evaluated what could be done better or faster in the next phase.

Scott Johnson, executive vice president for strategy and partnerships at Ensynch, says IPS-Sendero was typical of many of its new clients. Its customer base and services were growing quickly, and it needed more space to provide for disaster recovery.

Ensynch took on responsibility for IPS-Sendero's core information technology and application infrastructure such as Microsoft Exchange e-mail, data storage, Web applications, network and other support functions. IPS-Sendero kept control of the customer-facing financial applications that are its specialty. It also mirrored Ensynch's monitoring system in its offices, which allows technicians to quickly spot any problems.

It also switched from T-1 lines, which had been maxing out during busy times of the month, to Qwest Communications' QMOE 100-megabit line to connect with Ensynch. Consolidating IPS-Sendero's various providers helped save money while giving it higher-speed lines, says Johnson. The QMOE savings also enabled the company to increase bandwidth to its Norcross, Ga., location

Migrating systems to Ensynch took 3 1/2 months and approximately $45,000, Inocencio says. He declines to disclose the monthly fee, but compared to his original projection, he says "it is an insignificant amount of money that is a predictable, recurring cost."

The move helped IPS-Sendero reduce the number of servers it needed at its offices, freeing up space for growth and cutting utility costs. And the improved telecommunications line not only increased system performance, it allowed the company to offer clients new business intelligence and technology consulting services.

It also was able to move one technician who knew the company's desktop products and internal applications into the sales department, where he can take care of client problems quickly without having to send them to the help desk. Three workers moved into applications development, two left the company, and Inocencio became manager of technical consulting and engineering, which was a new revenue stream for the company. Remaining technicians and Ensynch handle help-desk and networking questions. And with the faster system and fewer outages and performance issues, the number of help-desk tickets has dropped from 320 a month to 140 on average.

Inocencio advises other companies to not skimp on the planning when making major IT changes. His suggestions: Do a thorough cost/benefit analysis. Look at existing costs and contract terms, items that will be covered by new contracts, and the cost of poor service or falling revenue if you do nothing. Use a phased approach to mitigate risk. Spend time understanding your business' current status, where you want to go and how you want to get there.

Johnson echoed the importance of involving the business side in technology decisions. "Know thyself first," he says. "Know what you're good at and what's core to the business, and what can be done outside."

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