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Growing Pains

As insurers enjoy business growth, they must keep a close eye on infrastructure expansion to ensure data security and associated regulatory compliance.

As insurers grow their businesses, it often is necessary to expand their physical and electro-mechanical resources. In April, for example, The Hartford Financial Services Group (Hartford; $22.7 billion in revenues) unveiled its new 96,733-square-foot operations center for individual life insurance, and Geico (Chevy Chase, Md.; $13.7 billion in assets) announced the opening of its New Jersey-based claims center. But under today's heightened regulatory scrutiny, managing data and infrastructure - and associated hardware, facilities and power supplies - during expansion is an increasingly critical and complex priority.

Recent legislation such as Sarbanes-Oxley has made it imperative that companies secure data to avoid any possibility of compromising it or even risking downtime that could jeopardize access to information in a timely fashion, according to Michael Fluegeman, vice president at Syska Hennessy Group, a consulting, engineering, technology and construction company based in New York. "You can't operate without a rock-solid infrastructure," he says.

Nearly 600 employees will be stationed at The Hartford's new facility in Maple Grove, Minn., which has been in the works for about two years, according to Michael Keeler, senior vice president and director of individual life operations at The Hartford. The individual life business at The Hartford has almost doubled in size in the past decade, he relates. "We decided to construct our own building to accommodate growth so that we could assure an operationally designed workspace, or something other than a high rise that forced us to spread out over many floors," explains Keeler. The new building features three floors and is situated on a lot that can accommodate another 33 percent expansion, he adds.

"Planning was partnered with local municipalities and the city of Maple Grove to develop the options we were looking for - mainly redundancy," says Keeler. "From a business continuity perspective, we wanted to have redundancy available to us both in telecommunications and in power supply to avoid any complications that could cause a disruption," Keeler continues.

To ensure business continuity, The Hartford negotiated an agreement with the local power company in Maple Grove to install a generator in the building that will provide power during peak time and serve as a backup power supply in case of disaster, power outages or any other possible mishaps. The insurer also decided to stay with its current private branch exchange (PBX) provider, though Keeler declines to name the vendor.

Uninterrupted Communication

To guarantee that an insurance company's decision-making executives understand the nuances of technical and electrical mechanical infrastructure moves and upgrades, Imad Birouty, senior product manager at Teradata, a Dayton, Ohio-based technology vendor that provides enterprise data warehousing and analytical solutions, asserts that IT, senior management and facilities departments need to stay in close communication. "A facility manager may need to make it clear to senior-level management that electrical flow to a building tends to go up and down, and there could be blips or short periods of outages as well as surges in the flow of electrical currents, all of which could be dangerous to servers and computer systems," explains Birouty, who recommends that all companies look at uninterruptible power supplies (UPSs) so that power support is never an issue.

According to a new report, "The Data Center of the Future: What Is Shaping IT?" from Concord, Mass.-based consultancy InterUnity Group, based on a survey of 161 data center professionals, 27 percent of respondents were concerned about the lack of communication between IT and facilities departments and 26 percent cited poor communication with senior management as an issue. "You cannot possibly over-communicate," says The Hartford's Keeler. "The way the company is structured, we are able to put together a multifaceted team consisting of an IT department within our individual life division along with shared support that handles our network mainframe operations, which are consolidated with the entire company," he continues.

Similarly, at Valley Forge, Pa.-based Vanguard Group ($800 billion in assets), a mutual fund firm and provider of company-sponsored retirement plan services, communication is key to optimized data operations. "We have full-day sessions with IT" about data center issues, relates Bob Yale, principal of technology operations at Vanguard.

That communication has helped the financial services company to double its data capacity without raising costs, chiefly through automation and server consolidation, according to John Samanns, principal of technology operations, architecture and planning at Vanguard. "We've been able to grow our multifunction business without increasing costs for our data center," he explains. "We have redundancy of the data center at no cost to shareholders."

"Regardless of whether you are moving people, hardware or both, there is a lot involved for IT, leaving room for about a million things to go wrong," cautions The Hartford's Keeler. As 19 percent of the respondents to InterUnity's survey plan a major upgrade of their companies' electrical and mechanical infrastructures within the next year, and an additional 20 percent plan an upgrade within the next four to five years, it is imperative that their IT departments develop a well-organized plan for the physical future of their companies. "You need to plan well in advance to do the job right" and ensure business continuity, Keeler says.

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