0ld McDonald's farm was never like this

Rough Notes, Oct 1999 by Anderson, Steve

Server farm concept enables small and mid-sized agencies to use application hosting and spend less time managing technology

Ask any farmer about the impact of technology on agriculture and you're certain to get glowing comments about how much more efficient and productive agriculture has become because of technology. For insurance agencies, however, more technology hasn't always yielded similar results. But a partnership between computer consulting firm Fuher & Associates, Inc., and Applied Systems, a provider of automation software, systems and services to the independent property/casualty market, is capitalizing on the idea that in certain instances, less means more. The concept is known as a server farm.

In order to understand where insurance technology is going, it helps to understand how it's evolved. Here's a quick history lesson. In the early stages of agency automation, during the 1970s and early 80s, batch systems were about the only game in town. In the "good old days," agencies would type invoices on standard multi-part forms that included customer codes along with policy and commission information. At month-end, one part of each of the invoices processed was "batched" with other accounting information, such as accounts payable and accounts receivable records, and mailed off to Safecom or ARC to be processed. Within a week to 10 days, the agency would receive a package back in the mail with monthly customer statements, P&L statements and other documents and reports.

The next stage of automation enabled agencies to shorten the access time to month-end information. Agencies began buying computers and bringing them inhouse. A large number of vendors sold software systems specifically designed to help agencies run their offices. The advantages to having direct control over the back office processes are obvious, and it would be hard to argue with the efficiencies that most agencies have gained with in-house computer systems.

In the process of gaining these efficiencies, though, there was a downside. Many agencies had to add staff to manage their in-house automated systems. And, in addition to all the other aspects of the agency that need to be managed, the automated system became one more. Add to that the accelerated pace at which technology changes and agencies are hard-pressed to keep up.

The emerging stage of agency automation may offer relief from the unrelenting pace of technological change. Using Internet technology, agencies now can rent time on an agency management system that is running on a computer that is located in another part of the country. The full functionality of the system is available without all of the demands of having to purchase and manage the equipment in-house. Essentially, this is an updated approach to the "batch" system many agencies started with and one which may help agents get back to doing what they really should be doing: selling insurance.

Fuher & Associates' (FAI) Application Service Provider Network (ASPN-pronounced "aspen") is one of the first examples of this new type of service, referred to as a "server farm." FAI has a number of network servers set up in its office, just as your agency has its own server on-site if you currently operate a network. The difference is that FAI personnel manage the network and take care of any problems that arise for each individual agency subscribing to the ASPN network service. FAI is working with Applied Systems to provide the Applied Advantage software program to agents using only an Internet connection.

Among the benefits that agencies realize from using the ASPN network are a significant reduction in the start-up expense for hardware and software as well as having Fuher & Associates provide the agency the expertise necessary to manage the computer system.

The system itself is relatively simple. The individual user in the agency connects to the Internet service via dial-up, ISDN, DSL, cable modem or frame relay. Each individual workstation in the agency is running a small piece of software that has the appropriate IP address and security information to connect to the ASPN system located in Fuher's office in California. The agency employee simply clicks on the ASPN icon and when the connection is established, the employee sees a screen that is similar to a Windows 95/98/NT desktop. This screen is actually running from the ASPN computers. Each user has a unique profile that allows the individual to customize his/her desktop so that it looks the same each time he/she connects.

Once the user is connected he/she simply clicks on the Applied icon and starts the Advantage product just as if it were located on the agency's office network. While connected to the ASPN servers the agency user still has access to the agency's local printers, CD drive and other resources. For the user, ASPN screens look just like another Windows session on the PC.

At FAI's California location, the "server farm" computers are set up so that each agency on the system has its own section of hard disk space for data and software program files. The access to that portion of the disk is available only to that individual agency. FAI does not commingle agency data and uses NT-level security to prevent one agency from accessing another agency's data. The Internet connections at the FAI office consist of a group of high bandwidth lines (all at least T-1) with direct connections to the Internet backbone. FAI is already planning for an even higher bandwidth connection in anticipation of continued growth.