Aligned for Success

By Anthony O'Donnell

Just as lack of understanding between business and IT is one of the great predictors of failure in technology investment, one of the distinguishing features of companies that effectively invest in technology is tight alignment between the two camps. That insight is broadly appreciated in the industry today but like so many things, achieving business/IT alignment is easier said than done. It is far more likely to be achieved, however, when driven from the top, as exemplified by both the technology philosophy and the actual performance of Insurance & Technology's Tech-Savvy CEOs of 2007."Where I've seen failures is where when senior business executives want technology to support their business but don't adequately inform the CIO about where they are going as a company and what they are trying to do strategically," relates Rod Fox, CEO of Praetorian Financial Group.

Fox's approach is to insist on transparency about the strategy of the business and "immersion" of Praetorian CIO Michael Anselmo in the affairs of the business. "It's not a matter of, 'Mike, come up for an hour on Tuesdays and we'll talk,'" Fox explains. "Rather it's, 'Mike, you are a part of the group running this business so you need to see everything: You need to see all the numbers, you need to meet the producers, you need to be in the field and see what they're doing, and you need to know how they are interfacing with their end-customers."

Fireman's Fund CEO Joe Beneducci stresses personal interaction with technology executives at various levels in order to maximize what might be achieved through business/IT collaboration. "My tendency is to push the limits within our team toward what we can accomplish with different technology," he says. "At the same time I try to make sure they are in a comfortable environment where they can say, 'Joe, it's a great idea but, honestly, it's not going to fly, and here are the reasons..."

For Beneducci, business/IT alignment is not merely about business leaders understanding technology better, it's about mutual respect between business and IT executives. "The industry is littered with examples where one side, whether the business leaders or the technologists, haven't respected the other," he observes. "For every one of those, you can find a disaster of a project that has been left behind."

While different executives have their respective spheres of responsibility at Fireman's Fund as in any other company, Beneducci drives a strong sense of common purpose between business and technology. "At Fireman's Fund we do not consider either technology or business a separate team; there is one team and both groups are vital to ensuring that we can deliver the appropriate solution."

Life of the South CEO Ned Hamil similarly calls attention to the integration of IT within his company's strategic leadership. "Our IT is not compartmentalized, nor is it an entity unto itself," he remarks. Because the company started small and IT was essential to its growth both as a carrier and a third-party administrator, Hamil says, "all of our programming staff, our operators and subsequently our business unit leaders closely integrated into the whole business process."

Adds Hamil: "I can't overemphasize how important it is to drive quality IT interaction with business unit leaders, as opposed to someone selling a marketing idea and flopping it down in front of the IT folks and saying, 'I told them we could do this; we need it by Monday.'"

That interaction is at a premium in a company that sells its services to other carriers, Hamil suggests. Because his business and IT professionals work closely together, he explains, it allows the organization to "put a very cohesive face on our company when we go back to the client, so he doesn't see a dysfunctional or fractured response. He gets very cohesive response and a very professional introduction to our company."

Kent Clapp of Medical Mutual of Ohio emphasizes the importance of communication skills on the part of technology professionals to bring the benefits of technology to business users. "We spend a lot of time making sure our [IT department] and users of systems have great communication and work very well together," he notes. At the same time he stresses the need for all executives to be alert to the potential of technology to improve the business. "It's all management's responsibility to look for ways to improve the company," he says. "It's everybody's job-including mine - to make sure that we have top-notch business processes that give us a strategic advantage in the marketplace."

Business/IT partnership is not something that Thomas R. Watjen, president and CEO of Unum Group, only gives lip service to; the concept is part of the Chattanooga, Tenn.-based benefits providers' corporate DNA. "We are very, very firm believers that using technology smartly does create substantial competitive advantage for us," he says. "The way we've set up our process here works very well for us, where it starts with the business people in concert with the technology teams - thinking through what we're trying to do from a business point of view, and using the technology to support that business process."

While Watjen is a firm believer in these principles, he gives the credit for institutionalizing the alignment to CIO Bob Best, acknowledging, "That's something that has been drummed into my head by Bob Best and his team." The bottom line, Watjen says, is that "Any technology discussion starts with a business purpose. Bob has actively engaged his business partners around the company in a dialogue, which starts with what we are trying to achieve business-wise. Then we use technology as a piece of that enabler. So, under his leadership, it's always been done the way we've done business here."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio