DHFL Bolsters its DR with Managed Services

Summary:

In a bid to ensure business continuity DHFL outsourced their primary datacenter to IBM and propped up its security posture.

Highlights:

The IT team instead of chasing reactive fire fighting jobs has taken up new growth focused projectsThe project truly delivered its ROI when DHFL managed to overcome an actual disaster in November, 2010

The company: The housing sector is emerging as the most dynamic segment of the real estate industry in India. As per the latest RNCOS report titled Indian Housing Sector Analysis, the country’s housing demand is slated to grow at a CAGR of around 22 percent during 2011-2013.

A bulk of this demand is arising from the medium housing segment. The report highlights the inherent potential of medium housing segment, especially in Tier-1 and Tier 2 cities. Providing a future forecast on the industry, the report states that the medium housing market will grow at a CAGR of around 26 percent during 2011-2013. These are good tidings for the housing finance firms catering to the LMI (lower and middle income) group.

Riding on the back of strong demand in the home loan segment, housing finance companies (HFCs) in India are growing at a fast clip. A report released by ICRA in 2010 revealed that HFCs are performing better than banks in mortgage lending both in terms of growth and asset quality.

One of the beneficiaries of the steady growth in this segment is Dewan Housing Finance (DHFL). The private housing finance firm catering to the LMI group has been consistently growing at a CAGR of 35 percent, in terms of loan disbursements.

DHFL commenced operations in 1984 as the second housing finance company in the private sector in India. Since its inception, it has catered to the lower and middle income segment in the Tier 1 and Tier 2 cities. Today, it claims to be the third largest housing finance company and the second largest housing finance company in the private sector.

The Mumbai-headquartered company caters to loan seekers in the LMI segment through its extensive network of six zonal offices, 101 branches, 72 services centers, 24 camps,11 regional processing offices spread across the country.

We needed an IT infrastructure which could withstand the ravages of a disaster. Obviating business disruption was top priority. While this was a key imperative we did not want to build our own datacen

Business case: Satish Kotian, Head-IT, DHFL reaffirms the fact that HFCs are being handsomely rewarded because of the robust growth in housing loan demand. Kotian has been with the company since December 1992 and has witnessed the evolution of the housing sector from close quarters.

With its business growing at a brisk pace, DHFL was beginning to appreciate the need for a reliable, resilient and secure IT infrastructure that could support the growing needs of its expanding business operations.

Kotian recognized the need to craft a robust and comprehensive business continuity management strategy. “In the third quarter of FY 2009-2010, we appointed IBM to consult on the infrastructure security assessment. They came up with the various suggestions keeping in mind the financial sector requirements. When I analyzed the requirements suggested by IBM he found that it would be very difficult to implement all the requirements in-house,” says Satish Kotian, Head-IT, DHFL.

Traditional wisdom would have them host their primary datacenter on their own premises while outsourcing the DR site to a service provider. However, DHFL had to ensure that its primary datacenter was always up and running as it was becoming increasingly necessary for it to have a resilient and disaster proof IT infrastructure.

“We needed an IT infrastructure which could withstand the ravages of a disaster. Obviating business disruption was top priority.  While this was a key imperative we did not want to build our own datacenter because it would result in a huge investment. We did not want to incur the cost of hiring skilled personnel to maintain specialized datacenter and security teams,” says Kotian.

Taking cognizance of the prohibitive costs involved in setting up their own datacenter Kotian resolved to invest in managed services. “It would help us avoid the frequent operational fire fighting while ensuring proactive monitoring of the infrastructure,” he says.

Challenges: Having identified an alternative, Kotian began to scout for a partner who could understand the criticality of the strategic move and would partner with DHFL to provide an end to end solution while managing the risk of outsourcing the primary datacenter. After much deliberation he zeroed in on IBM as the technology partner.

“We chose IBM because they could help us adopt global best practices with their managed Resiliency and security services which included datacenter hosting, managed security and 24×7 monitoring through their Global Monitoring Center,” he says. On a personal front, Kotian had to ensure that his staff was not intimidated with the fact that the company was outsourcing a big chunk of its IT operations. DHFL signed the contract with IBM in March 2010. 

 

We needed an IT infrastructure which could withstand the ravages of a disaster. Obviating business disruption was top priority. While this was a key imperative we did not want to build our own datacen

First steps: With financial accuracy being critical to its core business, it is critically important for DHFL to ensure that it is reliably protected from spam and other online threats while protecting staff and customers, adhering to all relevant regulations, and maintaining messaging security with little or no management overhead. In order to achieve these high levels of security and compliance DHFL adopted Symantec’s cloud based solution Message Lab’s Email Safeguard.

“In conjunction with this we have deployed multiple firewalls along with intrusion prevention systems managed by IBM Managed Security Services to ensure the security of our infrastructure. This proved to be a wise investment for us as it addressed our needs effectively and efficiently.

We also converted this entire CAPEX intensive initiative into an OPEX model while taking care of our future growth through a technology refresh within the contract period by defining predictable outflows,’ he says. The project was executed within four months and on July 11 2010 the their hosted datacenter was up and running in Bangalore.

Benefits: Kotian’s foresight paid off handsomely. The organization benefited immensely from this strategic move. It provided the third-party operational ease, flexibility, scalability as well as cost effectiveness while allowing the firm to execute faster on the business demands. “We have also mitigated the risk of having the primary datacenter running from our premises by having it hosted in a world class datacenter with 24×7 monitoring by qualified personnel which helps stay ahead of threats. In addition to this, our IT team instead of chasing reactive fire fighting jobs has taken up new growth focused projects,” Kotian says.

But the project truly delivered its ROI when DHFL managed to overcome an actual disaster in November, 2010, when a fire broke out at its corporate office building which hosted its in-house datacenter. The facility was rendered non-operational for almost a month post the incident. However, their systems were not hampered even for a minute. “The wise decision of outsourcing our primary datacenter to IBM saw us through the disaster. This incident by itself has ratified our decision,” he says.