With tropical storm season coming around again, one IT shop in the hurricane zone is better prepared this year, with a backup data center up and running and a primary data center located farther inland from the Carolina coast. Hurricane Charley hit southern Florida Friday, bearing 145 mph winds, and could produce $15 billion in damage.
Blue Cross Blue Shield of North Carolina prepared for disaster in the midst of the recession, not because it had the funds available, but because disaster preparedness couldn't be delayed. In mid-2002, CIO John Sternbergh says became concerned with his department's ability to recover in the event of a disaster. And Mother Nature had given him plenty to think about. Several powerful hurricanes had hit North Carolina in the 1990s, including Fran in 1996, which caused $1.3 billion in damage, and Floyd in 1999, which caused $6 billion in damage with severe flooding. The Sept. 11, 2001, attack on the World Trade Center prompted Sternbergh to consider what would happen to Blue Cross Blue Shield and its 1.2 million insured if his company lost its computer systems.
Then in December 2002, his Chapel Hill headquarters lost its power for about a week in a snowstorm. Blue Cross Blue Shield at the time had a contract with SunGard Data Systems Inc. for hosted recovery systems, but it only provided for eight to 12 weeks of coverage. As Sternbergh reviewed his exposures, the contract looked "inadequate," he says. Financing a new plan for disaster recovery exceeded the company's budget.
Four senior IT staffers who had witnessed previous natural disasters explored various ways out of the insurer's dilemma. After three months, they recommended that a duplicate data center be established under Blue Cross' management in a separate location. Sternbergh went back to the governance board with a price tag for the plan of $13 million. The funds were approved, and Blue Cross bought a building 15 miles away from its Chapel Hill headquarters and installed equipment to duplicate the headquarters' data center.
The new data center was finished at the end of 2003, and Blue Cross, Blue Shield has been relying on it this year as its primary data center. The former headquarters center is now the backup site. Health insurance is more dependent than ever on information systems for rapid claims processing and customer satisfaction. A new application to allow potential customers to sign up for insurance online is running on the Blue Cross Web site. Even if disaster strikes, Sternbergh says, new applicants will always have someplace to go.
The Business of Going DigitalDigital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.