Sharing IT Resources and Risk
Two IT cooperatives, both founded in the 1960s, continue to share systems, cost and risk while offering the latest technologies for their members, from software as a service to open source.
Sun, July 26, 2009
Computerworld — Nearly a half century ago, everyone grasped the advantages of using mainframe computers for business. Yet few organizations in the early 1960s could afford those machines, which could cost millions of dollars. Some enterprises got creative, latching onto shared services, such as the now-defunct Tymshare, to access slices of applications and processing power.
Other imaginative groups created IT cooperatives to share pricey systems. A few of those IT co-ops continue to thrive today, offering the latest technologies for their members, from software as a service to open source. At the same time, they share the risk among all members, who are users and owners rolled into one.
That combined user/owner role makes running an IT co-op somewhat unique. Lake St. Louis, Mo.-based National Information Solutions Cooperative Inc. (NISC) has delivered IT services to rural utility and telecom cooperatives since 1963. CEO Vern Dosch says while most companies seek to increase shareholder value, IT co-ops "focus on products and services, because for our members, that's the ROI."
Issues Big and Small
Naturally, co-op members don't have identical business needs, so their perceptions of value will differ. Washington School Information Processing Cooperative (WSIPC) in Everett, Wash., has served 280 of the 295 school districts in the state since it was founded in 1967. Director Sue Furth says data collected by the co-op might mean one thing to district superintendents analyzing curricula and another to state legislators planning budgets.
Job function differences aren't the only tension built into the IT co-op model. There are also vast discrepancies in size within a co-op's membership. WSIPC, for example, has to deliver relevant IT services to districts as large as 30,000 students and as small as 75. NISC supplies software and services to more than 510 members, including a Georgia utility with about 150,000 meters and one in Montana with about 900.
Doug Rembolt, vice president of shared services at NISC, says there are three ways his organization smooths out the natural friction among the co-op's varied constituents. First is through committees comprising members elected by their peers. Monthly committee meetings are held to discuss common issues, such as the billing software NISC members depend on to deliver their 8 million invoices per month.
Next are routine joint application development sessions, where members hammer out the specifics of software design -- from detailed user interface issues to the connectivity problems related to deploying smart utility meters. Finally, there's the annual NISC conference where all issues are aired.
