By Sam | November 23, 2015

Top 3 Reasons Why "In-House" Doesn’t Work For Most Credit Union Data Centers Today!

I get it, I really do. Having the technology/data center you are responsible for right across the hallway in your Credit Union can be comforting.  For thirteen years, I oversaw a large CU’s Information Technology infrastructure and saw it grow from a handful (5 maybe?) of servers upwards to around 80 or more! And that isn’t including the myriad of “appliances” needed to protect that infrastructure – dual firewalls, load balancers, routers, switches, IDS/IPS, etc. The floors of that data center gleamed and physical security was tight – after, it was “my” data center.  And while DIY (in-house) as a concept can work, the challenge is resourcing it to the level where it doesn’t interfere with achieving your Credit Union strategic goals. Let’s look at the top reasons in-house data centers don’t work for Credit Unions today.

1. Technology Plans Are Slowing Down Your Credit Union Strategic Plans – You probably just went through your proposed 2016 IT budget plans with your board and technology committees.  In some cases, you may have even aligned these with strategic initiatives such as member experience and staff efficiencies. And while these are a great start, we’re seeing Credit Union’s defer major strategic goals due to IT resourcing.  Hardware/Software upgrades, virtualization and security initiatives are not only using up all of your IT’s work hours but also your annual IT spend. I’ll lay it out very simply:
   • Your Credit Union has 11 major initiatives planned for 2016 – all of which require some level of support from your IT team.
   • You report back that 5 of your IT proposed projects will have to be finished prior to launching any of those initiatives – maybe due to capacity, security, you-name-it – you just can’t get started on corporate goals until the IT work is done.
   • Your CU leadership team approves your 5 projects and puts the 11 “on-hold” until the next year.
   • Unbeknownst to anyone – the next year will yield similar discussions and similar results because technologies are always changing and today’s CIO is hard pressed to even stay on top of key maintenance work let alone enhancements or R&D.
2. A General-ist Isn’t A High Ranking IT Employee – Think back to when your Credit Union first started – every employee wore many hats! Your head loan office may have also been making collection calls – or your teller may have provided financial counseling. But as you grew, so did your need for expertise in the various functions of your Credit Union. IT department staffing growth isn’t keeping pace with the exponentially growing areas of coverage they provide – telecom, networking, server and desktop administration, Core administration, e-services, IT Security, helpdesk, compliance, business intelligence … shall I go on? In-house Credit Union IT departments run a real risk of being a “little bit good” at a whole lot of things but not experts on many unless they are properly staffed.
3. Disaster Recovery Often Means Duplication – Remember my gleaming data center floors I mentioned earlier? Picture a fire, hurricane, earthquake – pick your disaster of choice and imagine the complexity of recovering that data center. Depending on your DR strategy you may be starting from a warm/cold startup and in rare cases where money is no object, you’ve fully replicated your infrastructure with automatic failover. So what’s the problem you’re thinking? Just take a look back at items 1 and 2. How much money went into creating that infrastructure? How many projects were delayed? Did you double staff to cover your hot site too? Or is that same IT team now managing TWO datacenters? Twice the threat? Twice the risk? Team spread a bit thin?

I’m sure there are many Credit Union’s who are successfully balancing the demands of in-house IT work with the challenging I mentioned above. If money is no object and IT project can be completed without impacting Credit Union strategic plans – go for it! But my guess is that the average Credit Union has faced one or more of the challenges we’ve discussed and really haven’t found a proper exit strategy to move to the next step. In our next blog, we’ll review how Credit Union managed services is stepping in to get Credit Unions of all sizes back on track to servicing their members!

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