​Objective

Co-ops can save money by sharing software and IT-related infrastructure. But which systems make for successful sharing projects? And what’s the best way to make shared projects run smoothly? 

Background 

Sharing the procurement and operations of IT and telecommunications systems among co-ops is an appealing way to gain economies of scale, and technology advances are making such sharing more feasible. There are numerous successful examples of co-ops sharing systems. In one case, 17 distribution co-ops share a single land mobile radio sy​stem with an estimated capital savings of well over $100,000 and annual operational savings of at least $50,000. In another case, two neighboring G&T co-ops share a single SCADA (Supervisory Control and Data Acquisition) system, saving them $160,000 annually. In still another case, 18 distribution co-ops entered into a joint SCADA system acquisition, with an estimated capital cost savings of about $700,000. 

But sharing the procurement and operations of IT and telecommunications systems can also result in problems. Several years ago, three large distribution co-ops unsuccessfully attempted to do a joint procurement of a number of major IT systems, resulting in a significant loss of time and money. Other groups of co-ops have had similar experiences. This report provides a resource for co-ops who are considering sharing IT and telecommunications systems and discusses how to reap the maximum benefits from such sharing while avoiding the potential pitfalls.

Approach 

Topics covered in this report include: (1) type of sharing, (2) what co-ops have tried it, (3) the economic benefits and risks, (4) smart questions, (5) traps to avoid, (6) technological considerations, (7) vendor market considerations, (8) policy and business relationship issues involved, and (9) mini case studies. The report highlights types of technology that have proven to be “best bets” and “worst bests” for sharing IT and telecommunication systems; technology likely to be candidates for sharing in the near future; and a checklist of steps co-ops should take when they consider sharing.

Audience 

Policy and decision makers within co-ops, CIOs, IT staff, management

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