It is better to invest in quality today rather than spend a lot of money during a disaster
For a customer-focused insurance company like ours, the priority is to retain clients. It is also critical to leverage IT and treat it as a catalyst for growth to ensure quality, which is the most credible aspect of the business.
To attain quality, we have re-designed our data centre and reviewed the option of building it through an outsourced model. While cost is not a constraint to ensure quality, we spend five per cent of the total sales turnover on our IT budget, while TCO plays a critical role. As a strategy, SLAs are clearly defined and we constantly leverage knowledge of the outsourced data centre vendor to achieve scalability, flexibility and modernisation.
When it comes to meeting certain standards and driving efficiency, I would expect a data centre to have the following:
- Must have high availability, e.g. a TIA 942 tier 3 certified DC provides anuptime of 99.5 per cent
- UPS, DGs and ACs should be redundant
- Scalability with respect to power and space
- Be able to address aspects of physical security such as fire and flood protection, physical access, CCTV monitoring etc.
We have outsourced the DC at a low TCO to meet all the IT control requirements. We are ready to invest in quality today rather than spend a lot of money during a disaster.
The efficiency of a DC is derived from lower costs for power consumption. We replaced old servers with new servers like blade servers which consume less power. Infrastructure such as generators, UPS devices, ACs, chillers, BMS and fire prevention systems can also lead to greater efficiency. The heat generated from servers and the temperature of ACs should be balanced in a manner that leads to reduction in power consumption. A DC is a catalyst for growth and, if embedded with a good IT infrastructure available at all times to the employees, it surely leads to growth. This is a hygiene factor and we need to provide it to all employees at all times.
We have not carried out an ROI with respect to the data centre. However, cost-benefit analysis was carried out on a comparison between having an in-house-built DC and an outsourced one. The organisation saves around 30 to 40 per cent in costs over a five-year period under the outsourcing model. The outsourced model option provides a very high resilient, scalable and available infrastructure facility to meet organisations growing business needs.
The environmental controls of some of the leading hosting service providers satisfy very high data centre and security standards, like those of SunTone, TIA 942 and ISO 27001, and ensure less than two hours downtime per year. Hosting service providers have highly skilled manpower for not only our current requirements but also a totally managed service in future, if required.
This option is a time tested with many customers in the banking and financial segment already availed the advantages. Besides RoI, the benefit factor is that the IT team is free from the hassle of taking a constant data backup, data center up gradation, data deluge, network related challenges and so on, as it is taken care off in an efficient manner.
The objective is to improve effective turnaround time and pave the way to absorb new IT infrastructure and develop specific applications.
Since our core business is insurance and not IT, we expect to avail best services from the vendors who are specialized in building data centers. I expect the operational efficiency driven by IT to enhance customer experience and enable us to draw more customers to our business. At this point of time, the cost is not my concern given our spread across 50 countries as a group company, as IT is critical to us. The sole focus is to have sustenance and continuity of the systems which will enable business growth. The RoI factor to that effect would arrive from our infrastructure and customer data being secured in this model which is critical to our business.
John Boers is CFO & Chief Risk Officer, ING Vysya Life Insurance Co Ltd.