Allmerica’s IT Gets the Business
Multisourcing Strategy
ATS now husbands its internal talent toward new development initiatives while outsourcing baseline maintenance work to third-party resources. Chief among these has been Keane, Inc. (Boston), which was also instrumental in Allmerica's adoption of CMM, according to Tranter, owing to an outsourcing relationship with Keane's Halifax, Nova Scotia, facility which operated at CMM Level 3. While providing ATS with a variable-cost approach to maintenance expenses and the ability to ramp up and down according to demand, Allmerica's multi-sourcing strategy has helped reduce labor costs by almost half. A technology organization that had a complement of 900 employees when Tranter took over now stands at about 440 internal employees and 220 external FTEs, with an annual budget of $115 million.
Achieving such improvements in the way the technology organization was run was very much in line with Tran
ter's business expertise. But he wasn't exactly a stranger to technology matters to begin with. Thoughout his career in the P&C industry, Tranter has been involved in project management and has been closer to technology than many business executives. For example, after Aetna's P&C operations were sold to Travelers in 1996, Tranter-who came from the former-was charged with integrating the products, technology and operations of both companies' personal lines.
When charged with re-thinking Allmerica's IT organization, Tranter and his team relied on consultants such as Gartner and META Group (both of Stamford, Conn.) and Forrester (Cambridge, Mass.) for the latest thinking on technology, as well as to provide technical orientation until he was able to identify appropriate resources within the ATS talent pool.
Power of Communication
Once Tranter's team had sumbitted the model to transform IT and received the mandate to put it into action, Tranter faced a serious managerial challenge to overcome skepticism. In the first place, "there had been a lot of change in the technology organization over the previous few years, so technology management thought, 'Oh, here's another program of the year.'" Secondly, there was resistance to what Tranter planned to execute, and perhaps more importantly, Tranter needed to establish credibility as a business executive coming in to run technology. The solution was communication.
"I spent a tremendous amount of time in the first six months working to educate people in the organization on what we were trying to do," Tranter recounts.
But critical to buy-in was that the process be two-way. For example, Tranter worked with the technology staff on developing what were to be 12 "ATS values," which he says define how the organization is expected to perform."In the case of each of those values we engaged the organization in defining them so that it wasn't just the top pushing this stuff down," he explains. "We tried as much as possible to engage the people in defining the future," he says. "Even though we really had defined the model of where we were headed, a lot of the detailed execution points were driven by people in the organization."
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ELITE 8 FACTS
Greg Tranter
VP & CIO, Allmerica Financial.
SIZE OF IT STAFF: 440 internal, 220 external.
IT BUDGET: $115 million.
BACKGROUND: Educated as an accountant, Tranter spent 13 years at Aetna beginning in the early 1980s. In 1996 he moved to Travelers as a consequence of its acquisition of Aetna's P&C operations. He joined Allmerica in 1998 and officially became CIO in July 2000.
DREAM JOB: Tranter says he would like to be an insurance company CEO someday, but if money weren't an issue, he'd like to be a museum curator.
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
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