Allmerica Reaches CMM Level 3

Making good on a promise to achieve the milestone within two years, Allmerica Financial's (Worcester, Mass., $26.5 billion in assets) technology arm, Allmerica Technology Services (ATS), has received CMM (capability maturity model) Level 3 certification, following an independent assessment based on the standards of the Software Engineering Institute's (SEI, Pittsburgh) Capability Maturity Model.

"Our strategy has been to buy software in the marketplace to be competitive and to build for strategic advantage - CMM enables us to have that strategy," says Greg Tranter, vice president and CIO, Allmerica Financial. "It also enables our employees to do that strategic development as opposed to hiring some external vendor, which also enables us to achieve our development goals a lot less expensively."

Allmerica Technology Services planned to achieve CMM Level 3 certification after being assessed at CMM Level 1 in 2001, according to Tranter. In 2002, the organization expanded its onshore outsourcing relationship with Boston-based Keane, Inc., to supplement IT staffing levels and help boost Allmerica's process acumen. "Part of our relationship with Keane was based on the understanding that they would bring their CMM capability to the table and teach us how to become a Level 3 shop," Tranter says.

Allmerica adapted what it learned from Keane through a customization process involving heavy input from ATS staff. "We wanted to ensure that we had buy-in from our own people - that it wasn't just an external process mandated on top of the organization," Tranter explains.

Cultural Challenges

The organization nevertheless faced cultural challenges in pursuing the certification. "When you're doing CMM, you're changing the way people work," Tranter comments. "You're telling people who have been successful in their careers that, 'Now, for the betterment of the company, you need to do work differently.'" To address resistance to change, ATS created a team whose primary responsibility was to coach colleagues on how to adapt to the new processes associated with certification. "I don't think we would have been successful without that," Tranter says.

One of the greatest challenges associated with achieving certification on schedule was staying on schedule with all other work, according to Tranter. "We didn't slow down projects to concentrate on certification," he says. "We continued with scheduled projects and delivery of software."

The biggest payoff for Allmerica in achieving CMM Level 3 is in competitive advantage, Tranter asserts. "We're now very predictable in our ability to deliver technology." But the accomplishment is also a tremendous morale booster. Employees participating in an IT shop enjoying the distinction of Level 3 certification can take pride in both their individual role and the sense of playing on a winning team, Tranter suggests, but the benefit to employees goes even further. "Being able to say, 'I was a project manager in a CMM Level 3 certified shop' has more power than simply saying, 'I was a project manager at ATS.'"

Calling ATS' achievement "noteworthy and commendable," Jamie Bisker, director, insurance practice, TowerGroup (Needham, Mass.), says that, "It represents someone saying, 'Do we want to be the same way we have always been?' and, 'Why are other companies doing better than us?' - including people they outsource with," Bisker says. "It shows that the industry is paying attention to what they can do to be better at serving their customers, whether [they're] policyholders or internal business customers."

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