When Vermont State Employees CU needed more server space, it went out on the virtual edge, literally.
"In comparison to our credit union peers, we're a very early adopter of virtualization technology in a production environment," explained Steve Koenemann, information officer at the $360-million Vermont State Employees Credit Union (VSECU) here.
He's not worried, however: virtual servers are a proven part of VSECU's "strategic technology plan."
"The virtual servers position the credit union in a processing, development and testing environment that has infinite growth," Koenemann said.
Virtualization takes the operating systems and applications of multiple physical servers and, thriftily, runs them off one machine.
Virtual servers can save space and money-nearly $100,000 in hardware costs alone at VSECU, said Koenemann.
But the servers are also a payoff for the CU's business strategies.
For example, VSECU uses the virtual servers to test and train employees on new applications and software updates across the organization; hence, the credit union can be "more aggressive in making changes to products and systems," Koenemann said.
VSECU's strategic technology plan is not something every credit union has, but it's something every credit union should have, according to Terence Roche, principal at Scottsdale, Ariz.-based Cornerstone Advisors, a technology consulting firm for credit unions and banks.
"A strategic technology plan is a roadmap of investments that will create some pay-off or efficiency," Roche said. "The plan outlines who's responsible for making sure that technology investments align well with business goals."
"The plan is as much a philosophy as it is a document," Koenemann added. "This quarter we'll have a formal document to present to our board of directors, but up until this point the plan has been an agreement between the CEO and me about what technologies we'll focus on in relation to the business side."
A strategic technology plan may seem like an elaborate version of what many call common sense, but Koenemann is surprised at how many companies don't seem to get it.
"Smaller credit unions sometimes have a techie who isn't very business-savvy and is using a technology because it's cool, and not because it has a strategic purpose," he asserted.
Technology plans can be used to help credit unions compete, Koenemann continued.
"The way credit unions implement technology in the eyes of the members can be a strategic advantage," he said. "We are information management companies as much as we are financial services companies."
"Security, regulatory and compliance" is the top-priority category in VSECU's plan, said Koenemann. Other categories, in order of importance, are: redundancy and reliability; system features and functionality; and technology and infrastructure.
VSECU's virtual server project, at heart, falls under the technology and infrastructure category; however, the consolidated network ultimately will pay off in every other category, he said.
For example, virtualization will be a key component of VSECU business continuity plan, bypassing expensive, third-party disaster recovery services.
The first step in promoting strategic technology is to "get the entire credit union thinking about how technology helps the members and the organization," he said. "And you've got to have buy-in from the CEO."
The strategic technology plan also builds-in opportunities for the credit union to step back and assess "how well we've done and what changes we have to make going forward," Koenemann said.
CUJ Resources
For info on this story:
* Vermont State ECU www.vsecu.com
* Cornerstone Advisors, www.crnrstone.com
