Taking a Byte Out of Tech Costs

Credit Union Journal
March 19, 2009 | COMMENTS

Credit unions may want to think twice about cutting technology staff and outsourcing IT to save money—Synergy One Federal Credit Union found that it actually saved $600,000 last year by bringing network support back in to the fold, according to Bud Hobeck, CIO at the $185-million credit union.

"It became clear that, with today's economy, we are able to save money by bringing IT expertise back in-house" to manage a new storage area network (SAN) and Voice-over Internet Protocol (VoIP) phone system, said Hobeck.

Synergy One had cut three IT jobs last year, scaling back from the group of seven it had at its peak in 2007, he said. Then, the credit union outsourced SAN, VoIP and Microsoft Active Directory deployments and support to make up for part of the slack, he continued. Besides, the deployments were hairy, and the credit union decided it needed expert help.

"The outsourcing company was very knowledgeable, but it was very expensive," Hobeck said. "We even looked at changing companies. But if you're a 24/7 shop, you have to pay extra for that kind of no-holds-barred, round-the-clock contract."

After the network and phone systems were up and running, Synergy One discovered it could more affordably support the new platforms in-house, making the decision in December to drop the outsourcer and hire a new IT employee, he said.

That brings the IT staff to a total of five people—still two short of its peak. As a result, Synergy One still struggles with balancing its ability to move forward on critical projects and the need to offer day-to-day tech support to members and employees, Hobeck said.

To cope, Hobeck does what many an IT manager is doing these days: he meets with his staff and steering committee, and then with the CEO, to move certain "nice-to-have" projects to the back burner and prioritize the remainder, he offered.

Upgrades to Microsoft Windows 2008, Exchange Server and Office 2007 and SQL Server 2005, as well as a sales dashboard, are all on hold—“nothing major," said Hobeck.

But in a year where many credit unions are spending their money on the virtual branch in order to help grow the credit union, "we had to put a moratorium on our non-compliance related website projects," he said. "Marketing didn't like that, but it's something we had to do to get our critical projects done."

Critical projects for the first quarter are underway, including core system and bandwidth upgrades, website compliance with a new version of online banking, and a new disaster recovery planning system, said Hobeck.

Technology itself has lent a hand in lean times, Hobeck added. "Last year we implemented an automated overnight close-out process. That allowed us to reallocate the person who was doing the processing."

Hobeck said that is ironic that credit unions that say they can't afford to pay top dollar for in-house technology experts often seem willing to pay top dollar for outsourcing. "Mid-sized credit unions are trying to get a handle on how to attract highly qualified people and get them to stay," he suggested.

This article appeared at www.cujournal.com and is reprinted with permission.