Organisation: Reliant General Insurance Services Inc., San Diego Application: Virtual private network (VPN) Technologies: VPN client/server software from Axent Technologies Inc.; firewall from WatchGuard Technologies Inc.; T1 line Scope: 20 telecommuting employees Sponsor: Cary White, director of MIS Objective: To reduce monthly network access charges for telecommuters Payoff: Reduces access expenses by 75 percent; allows inexpensive addition of new telecommuters In fall 1997, Reliant General Insurance Services Inc. had a problem. The San Diego-based insurance wholesaler was growing, due in large part to a Jan. 1, 1997, California law mandating coverage for all drivers. As a result, Reliant's headquarters building was fast becoming too small to contain the entire staff.
So Reliant stepped up a strategy it had begun more than a year before: sending employees home with everything they needed to telecommute. The only problem was the access costs. With nine employees dialling into Reliant's private network of Hewlett-Packard HP 3000 and IBM AS/400 host systems via a toll-free number, monthly modem dial-up bills came in at between US $10,000 and US $12,000 on top of the company's regular phone bill.
"Our phone bill was what it was with only nine users," recalls Cary White, Reliant's director of MIS. "If we continued with the same solution, the cost would have gone up dramatically." Dial-up technology would be prohibitively expensive if Reliant wanted to add telecommuters.
With physical space in short supply, Reliant had to find a way to support more remote employees. As luck would have it, virtual private network (VPN) technology emerged at the same time as a viable alternative to modem banks and dial-up plans (see "The Bargain Hunter's Guide to Global Networking," CIO Section 1, April 1, 1998). The cost escalation Reliant was seeing with its telecommuters isn't a factor with VPNs. Using the Internet as the network backbone, VPNs require an upfront investment in client and management software, routers and firewall technology. But costs don't rise exponentially as the number of users increase. "It made a lot of sense for us to go with a VPN," White says. "We could get rid of the [toll-free] phone line, improve performance, increase capacity and reduce costs." In January 1998 Reliant established a permanent Internet connection for its corporate LAN, signed up with an Internet service provider (ISP) and installed a T1 line and cable modem Internet access in its telecommuters' homes. For VPN software, White chose PowerVPN from Axent Technologies Inc. of Rockville, Md., and installed it on a Windows NT server that sits behind a firewall from WatchGuard Technologies Inc. of Seattle. The standard IBM Pentium Pro desktops of telecommuters hold the client piece of the VPN.
Now when remote employees need to access policy management systems, e-mail and other job-related applications, they connect into the network through cable modems. Access to the corporate LAN is controlled by the VPN gateway, which prompts users to enter their personal identification numbers after their client systems have requested authentication.
Today 14 employees access Reliant's host systems via the VPN full-time, with another six using the VPN after-hours or on weekends. Even with more than twice as many users, Reliant's access bill is down about 75 percent to approximately US $3,000 per month.
While T1 line costs are high, White's convinced that going with a VPN was the right choice. Not only are response times faster for the remote employees, but Reliant currently has 25 client licenses from Axent Technologies, allowing the company to add telecommuters at a minimum cost. "The only additional costs we would incur would be for more licenses and Internet access charges," White says, adding that Reliant is barely tapping into its T1 capacity. With underwriters connected to the network typically for five days each week, Reliant's telecommuting infrastructure will accommodate more employees. White doesn't even want to think about what his phone bill would have come to with the old dial-in method. In addition, performance over the VPN into the company's policy management systems is a lot faster and more reliable than the previous dial-up system.
"With the VPN, the biggest benefit is the costs we don't have to pay for adding telecommuters," he says. And telecommuters get a benefit too. Reliant picks up the costs of cable modem access from their homes.
Written by Senior Editor Megan Santosus (firstname.lastname@example.org). Send Working Smart ideas to Features Editor Meg Mitchell at email@example.com.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.