Axcelis Cuts Jobs, Posts Loss

Kevin Murray, Executive Vice President, CIO, AXA Financial During his years as a CIO of New York-based AIG (first quarter 2005 net income of $3.68 billion), Kevin Murray learned many valuable lessons about the challenges of legacy systems integration. Now, as CIO of New York-based AXA Financial ($9.6 billion in annual revenue), he is putting that experience to use. Murray both is overseeing AXA's integration of MONY's technology following last year's acquisition, and attempting a reorientation of the firm's technology from a tactical approach to a more strategic footing, and from a development/maintenance model to a product-, service- and distribution-focused paradigm.

I&T: How has your prior experience prepared you for your current role, particularly since you came from the P&C industry?

Murray: When I arrived at AIG seven or eight years ago, they had a similar systems portfolio, so I guess I've done the same thing once successfully - though I hit a lot of bumps in the road and learned a lot from doing it the first time. The P&C commercial side at AIG obviously was quite different - fewer and bigger products, for a start. We went through brokers rather than agents and financial planners, and our customers were officers of Fortune 500 companies rather than end-customer consumers. Nevertheless, it was still about products and distribution. The P&C consumer business dealt with customers very similar to the kind that buy life and annuity products from AXA, so I hope I'll be able to parlay that into results here.

I&T: In addition to the typical CIO responsibilities, what is your job as it relates to the current strategic imperatives AXA faces?

Murray: My job is to take an organization that was on a more tactical track for the last several years and put it on a more strategic track - all while I keep the tactical in place to support the business. That's probably the most difficult part of what I have to do here. I don't think it will be difficult to set up the strategic system division and the systems themselves; the issue will be conversion of the old systems and placing our existing and new book of business on the strategic system. I'm trying to put a strategic stake in the ground and change the way we do things in terms of business process, systems development and an entirely new strategic architectural platform.

I&T: How is the technology integration of MONY's systems progressing?

Murray: The integration is going well and is now 80 percent complete. The integration of the broker-dealer networks of the two companies was completed in June. Still left to be done is execute a further review of the systems portfolio that the MONY organization added to the AXA Financial systems portfolio and meld it strategically.

As with any sound merger strategy, we have the cost-reduction considerations associated with the decommission of chosen legacy systems. Specifically at hand is the need to identify the strategic systems of choice that bring both a lower total cost of ownership through the deployment of thin-client technology, as well as the decoupling of product, service and distribution rules from legacy code into product, service and distribution rules engines. Those rules engines can be made directly accessible to my business partners, getting me out of being the "code broker," so to speak, as the business tries to get product to market.

I&T: What are some benefits associated with the MONY acquisition from a technology standpoint?

Murray: One thing it gave us was another location outside of New York City. MONY had a fairly mature IT group in Syracuse, upstate, and I'll be able to leverage that as an alternative development site. The additional talent that the MONY IT organization brought is another important benefit to the AXA Equitable organization - I'm finding a group of extremely talented IT professionals and a great deal of intellectual property. We're also enjoying a kind of "two-times-two" effect - MONY was selling the same life and annuity products, so it's certainly shaking up things from a creative perspective.

I&T: What specific initiatives do you have planned to support your shift from a tactical to a more strategic approach to technology?

Murray: My next big task is to sell the strategic systems of choice - both life and annuity, and including products, service and distribution functionality - to my business partner executives. In conjunction with that, I will begin to finalize the development of the business case for the technology that will support the product design of the future and enable AXA to enter new markets. We have begun initiatives associated with that, including the development of a prototype product rules engine and product configurator that will enable us to bundle products in a flexible and nimble manner.

I&T: What's your vision of "a flexible and nimble manner"?

Murray: Today it takes us about six months to get products to market; I believe our new strategic systems will do it in 45 days, with a holy grail ultimate goal of 30 days.

I&T: How will IT's mission change as you move away from the traditional maintenance/development paradigm to a product, service and distribution model?

Murray: First was a reorganization of the IT group into that model. That was one of the first moves that we made because it's hard enough to align with the business without the handicap of IT being configured in a different way. The mission of senior information officers running product, service and distribution is to not only enhance the relationship with their business partners, but also to leverage that improved relationship to better the business requirement documentation process with the goal of delivering systems with greater business impact. I really believe that a life and annuity company will have to be that nimble, efficient and quick with product, service and distribution, or it will cease to be competitive within the next three to five years.

I&T: What approach to technology architecture are you taking to support the mission refocus?

Murray: We will standardize on a technology platform that is J2EE-compliant and middleware that is simple and thin in its own right for ease of integration. We'll stick with the proven database managers in the market such as [Armonk, N.Y.-based IBM's] DB2 and Oracle. We'll choose one Web server strategy, based on technology we're in the process of choosing. A variety of benefits is inherent to establishing that kind of simple, straightforward standard architecture, such as service-oriented modules that can be reused across the organization. We will standardize all the housekeeping associated with J2EE-compliant code and mandate its reuse. We plan to create a kind of "Library of Congress" of services.

I&T: How will the mission paradigm-shift affect the character of the IT organization, for example, in terms of skill sets and in the specifics of IT/business interaction?

Murray: It will improve the business requirements process - it will be business driving technology, and not the reverse. In a related way, it will place more emphasis on everything other than coding - business case, governance justification, business requirements, technical specifications. I no longer care about programming because we do that well; we don't need to worry about programming. Our new approach will allow us to focus on the other things and treat programming as a commodity.

I&T: How focused is AXA's IT organization on cost control as opposed to growth?

Murray: Cost and growth are inseparably interrelated. AXA Group in Paris and AXA Financial have established a very aggressive strategy called Ambition 2012. Associated with that is greater revenue generation, but also an emphasis on controlling costs. One of my jobs is to prove that capital investment in technology will not only support growth, but also expense control. And I believe that objective is consistent with our IT strategic plans: The total cost of ownership associated with rules engines and thin-client presentation is less than legacy system mainframe code, or even thick-client applications. I'm estimating a 25 percent to 30 percent decrease in total cost of ownership on the new strategic platform. If I can't prove that that's going to pay for itself - through revenue growth and expense control over the next years - then I'm not doing my job.

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