ZIFFPAGE TITLEApologies of Scale
Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
Apologies of Scale
Though the American Red Cross probably has more in common with a $4 billion public company than it does with its 1.4 million fellow nonprofits, it shares their struggle between investing in technology infrastructure and spending donors' money on the mission.
"We do have very a similar challenge," insists CIO Steven Cooper. "In fact, this is true of every place I've been, in the corporate sector, in the government and in a not-for-profit. Everybody is resource constrained. It's just a question of how much, before you have to draw a line and say, 'I'm out of resources.'"
This may sound odd coming from an organization that spends about $200 million on central IT, Cooper says, plus an estimated $50 million more that's spent across the organization's local chapter network. But as is now clear with hindsight, those resources weren't enough when Hurricane Katrina hit the Gulf Coast last year.
"We set up an emergency financial assistance call center for the first time in our history, and we apologize," Cooper says. The call center was "virtualized," in that calls coming into the 800-number were distributed to volunteers throughout the U.S., many working out of their homes. A database was also set up to track the calls and payments issued. "We now know it could not scale to handle 1.4 million families. It was brand new. We created it in 10 days. We're not going to do that again."
The scale of the Gulf Coast catastrophe was beyond anything the Red Cross had ever encountered, Cooper notes. The organization is now moving rapidly to multitier architectures and Web-enabling as much infrastructure as possible, he says, to make it scalable in real time. "When we run out of capacity, we've engineered our IT so we can bring additional Web, application and database servers online, both to expand capacity and performance," he says. But as a nonprofit, the American Red Cross can't afford to have reserve capacity sitting unused, so it is working with vendor donors to help give the relief agency "surge capacity," he adds.
The organization now has a peak capacity to process 100,000 casesfamilies in need of disaster assistanceper day, with a goal or reaching 1 million cases per day, Cooper adds. "We're going to do it in an economically viable way. And we absolutely are hoping that we never have to demonstrate that capability. But we need to be prepared, just in case."
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