The British Columbia Automobile Association (BCAA) has awarded a two-year, $3.1 million contract to Vancouver’s Sierra Systems Group Inc. that will see eight key business applications
consolidated down to two, bringing cost savings and new business opportunities for the organization.
With 22 storefront locations across B.C., as well as an emergency response call centre and insurance call centre; BCAA’s three primary technology applications are insurance, membership and their loyalty program.
Ken Ontko, the BCAA’s vice-president of information systems and CIO, said their major transactional applications were siloed, with nine silos in those three areas. With redundant staff supporting multiple insurance applications, Ontko said they decided there had to be better ways to deliver those services.
“In addition, because of the Year 2000 we had picked-up several packages that were of different technologies, so again in my backend I had to support different technologies,” said Ontko. “If I could consolidate all of the applications I would only have to support one technology at a much lower cost for licensing and operating software.”
The BCAA went to a two-stage RFP process, first bringing in an independent firm to evaluate what it would take to consolidate their systems to give them a reasonable baseline for the RFP process. Ontko said they wanted companies with a local presence and experience with this kind of work, and out of eight vendors Sierra won the two-year contract.
There will be regular interim deliverables over the next two years, but Ontko said he expects the full consolidation will take up the bulk of the time. Their membership system along has 750,000 lines of code, and he said there are another eight silos on top of that.
“We’re not going to replicate them and port them over, we’re redesigning and redeveloping the business processes and moving the business effect of them over, and that frankly takes time,” said Ontko.
Ontko said they expect to begin realizing savings and improvements in a number of areas. Adoption and productivity rates will improve with internal users not having to copy and paste data between applications. Externally they’ll be able to Web-enable more web services for their customers. And while before their diverse technologies made it difficult to plug external partners into their system that will change.
“We’re aggressively looking for business partners to help manage our customer relationships better,” said Ontko.
But Ontko said the biggest changes will come from cost avoidance. For example, a $1.4-million Oracle database upgrade will be unnecessary, and with a Java environment, licensing fees will be lower.
“If you add up the total savings, and totally on cost avoidance without any productivity gains, my return on investment is about 27 per cent and my payback period is two months after I finish the last bit of work,” said Ontko. “There’s a very compelling business argument for this.”
Ian Reid, Sierra’s president and CEO, said the contract with the BCAA is a fairly common project for Sierra, helping a company with nine applications of various legacy technologies to be consolidated.
“They’ve had issues with silos, and the technology is older then they’d like,” said Reid. “Essentially they’re getting new open source technology, getting the applications rewritten into today’s standards.”
When the consolidation is completed, Reid said the updated system will allow the BCAA to more easily implement new services and adapt to changing business requirements.
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