November 23, 2011
Credit Union Management magazine’s Web-only “Tech Time” column runs the fourth Wednesday of each month.
If Great Aunt Martha said you had your “head in the clouds” when you were a kid, that meant you had a hard time concentrating on matters at hand.
But cloud computing, in contrast, is very down to earth, and can provide an efficient and worthwhile solution for credit unions. Our credit union, $68 million First New England Federal Credit Union, is one example of where it has worked well.
Formally defined, cloud computing is the delivery of computing as a service rather than a product, whereby shared resources, software and information are provided to computers and other devices as a utility (like the electricity grid) over a network (typically the Internet). Cloud computing delivers computing as a service; SaaS delivers software as a service.
We came into the cloud because our strategy to offer technology-oriented solutions to members started off well enough, but became a complex problem over time. Due to the complexities involved in maintaining integration of the many systems we had put in place, we found we needed a substantial amount of internal staff support for the various systems in addition to our third-party network administrator.
As New England FCU evolved, separate servers were added for email, the marketing customer information file system, our credit union service organization, the employee intranet, and rewards checking. With only 27 staff members, limited facility space, and aging servers, we needed a way to effectively maintain all these servers and provide optimal functionality.
When our email/Internet server crashed, in 2009 we talked through options with our vendor. The cloud computing, or “virtual” option, was one we preferred as part of a longer-term strategy to migrate away from servers that required new upgrades and maintenance agreements. Moving to the cloud meant purchasing one virtualization server. Many of our various servers would migrate to run on this server over time, saving us the costs of separate custom installations of servers, upgrades and maintenance.
For example, our SQL server that supports our MCIF system from Raddon Financial Services, (a CUES Supplier member), our server for our portal from Passageways and our email server have all migrated to run on our one virtual server.
The initial set-up required significant up-front installation and programming costs. But after careful analysis, we found the costs were comparable to what we would have spent had we kept all our individual servers.
The benefits of cloud computing within our organization are a simplified staff role—we just have a liaison for our third-party vendor, ADNET Technologies Inc., Farmington, Conn.; less down time; and access to expert technicians. Since our physical server room is small to house our many servers, cloud computing gives us more space, fewer separate contracts, and better disaster recovery options. Recent snowstorm power outages in Connecticut have illustrated the disaster recovery benefits: fewer servers to recover and automated real time back up off site with no tapes.
We have since moved our Symitar core system from in house to our provider’s service bureau offering as well. This is different technology from our cloud setup, however, it’s similar in the idea of lowering our in house maintenance requirements.
In the future, we will also migrate our mortgage CUSO’s server, plus audio, imaging and mobile, to the cloud to further ease internal staffing requirements, while still providing our members with top-notch electronic services.
Michael Palladino, CCE, is president/CEO of $68 million First New England Federal Credit Union, E. Hartford, Conn.
