High-Tech Co-Op Delivers Cutting-Edge Computer Services for Rural Utilities

By Campbell, Dan | Rural Cooperatives, March-April 2006 | Go to article overview
Save to active project

High-Tech Co-Op Delivers Cutting-Edge Computer Services for Rural Utilities

Campbell, Dan, Rural Cooperatives

When a rural utility cooperative selects a computer information technology for crucial services such as customer billing and data protection, it may in effect be "betting the farm." The goal is to find a competitive edge, but a wrong choice can have a devastating impact. For most of the 40 years since its inception, National Information Solutions Cooperative (NISC) (and its predecessor co-ops) has been making the choice a pretty safe bet for members.

The idea behind NISC was originally conceived in the early 1960s by the Rural Electrification Administration (now the Utilities Program of USDA Rural Development). The goal was to help smaller, rural electric distribution coops better compete with larger utilities by developing jointly owned information technology support centers. Starting with three members in 1964, NISC has grown into an organization with 473 rural utility and telecom members that provide service to 7.2 million electric consumers and telecommunications subscribers. The co-op generates $85 million in annual sales, most of it from leasing computer software and support services to members.

NISC operates in an industry known for very thin margins, in which efficiency at all operational levels is crucial. As a mark of its reputation in this regard, NISC also provides services to a number of Fortune 500 companies, on a non-member basis. This helps generate a revenue stream that subsidizes the fees charged to members. The co-op provides billing and other services for customers such as AT&T, WalMart and GTE, also helping some of them analyze energy-consumption patterns to help with energy conservation efforts.

"There hasn't been one year in our 40 years that we have failed to add members and increase revenue," says Vern Dosch, the co-op's president and CEO. "This is a very volartile business. Technology, energy and telecommunications have all been in turmoil, particularly during the last 10 years. Yet, when you look at the history of this organization, you see very steady, stair-step growth. We are adding 10 to 12 new members per year and revenue goes up every year. Not one year in the past 40 has our revenue or membership declined."

NISC membership includes about 44 percent of its potential market of 800 rural electric cooperatives and 8 percent of the nation's 1,300 rural telecommunications co-ops and privately held companies (the latter are typically family-owned).

Expanded broadband facilitates merger

REds original plan had been to create six regional information technology cooperatives to serve the rural utility sector. Computers were just coming onto the landscape in the early 1960s, and rural electric and telephone businesses were still largely handling billing and accounting by hand. REA leaders met with statewide utility co-op associations, promoting the idea that these associations were in the perfect position to serve as business incubators to foster this type of cooperation among co-ops.

It made no sense, REA said, for each electric distribution co-op to buy a mainframe computer at a cost of more than $1million, hire their own programmers and develop their own software (which could not be licensed at that time). "Even in '64, they recognized that the technology business was all about economies of scale," Dosch says.

The North Dakota statewide co-op association took the lead with the concept, and, ultimately, two co-ops sprung out of the original data processing business venture: the North Central Data Cooperative (NCDC) in Mandan, N.D., and the Central Area Data Processing Cooperative (CADP) in St. Peters, Mo.

"Perhaps the greatest driver behind the success and growth of NCDC, CADP and NISC during the last four decades has been the steadfast relationships built with members," noted Joe Harris, chairman of the NISC board of directors. "The fact that all but two of the original 17 member systems are still with us today speaks volumes about our commitment to people, processes and technology.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

High-Tech Co-Op Delivers Cutting-Edge Computer Services for Rural Utilities


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?