Beating the Clock
Accelerated timetables also were applied to data center expansion efforts—build-outs timed to go live Thanksgiving Day were rescheduled to Labor Day to handle capacity that would be needed on Nov. 1. "We also had situations internationally where we could no longer stay within a Citigroup site because of security and privacy considerations," Sheinheit relates. "We were forced in some cases to combine data centers and rebuild call centers in different countries."
By close, MetLife had effected a domain separation, enabling the capability to operate, train and test among MetLife and Citigroup sites. In addition to creating MetLife network "islands" within the Citigroup enterprise that would be vital both to pre-close work and the final assimilation of the sites, according to Sheinheit, "We actually replaced the entire desktop and laptop infrastructure for Travelers."
Once July 1 arrived, MetLife had on-boarded 100 domestic annuity wholesalers and 63 life insurance wholesalers, enlarging its distribution system by about 40 percent—the single most important business objective of the merger, according to observers. Roughly 4,100 Travelers employees were operating within MetLife's e-mail and other corporate systems—and the New York insurer's treasurer's name was on their paychecks. MetLife also negotiated 635 "transition services" agreements, identifying business processes that Citigroup would continue to handle on a third-party basis at specified service levels.
Between close and the Nov. 1 deadline, MetLife's technology organization faced the definitive task of full integration—re-platforming Travelers' six life insurance and two annuity products. The goal "was basically that the majority of new products were sold on MetLife paper at integration," Sheinheit says. "We consolidated and actually moved a number of operations to Hartford," he elaborates. "At that time we also established the transition services."
The Travelers initiative currently is in what MetLife terms the "post-integration phase," which includes the transition services agreement separation—the end point of which is MetLife's bringing Citigroup's remaining third-party services in-house, most of which will be completed by 2007—as well as some vestigial policy administration systems consolidation and financial systems integration. "There were some systems that had to stay around to complete the end-of-year cycle," Sheinheit notes.
Toughest Challenges
The data conversion associated with re-platforming was among the toughest challenges the technology organization faced, according to Sheinheit. "It's something you always have [within an insurance merger], but sometimes, when it hits you, you ask yourself, 'Are we ever going to be able to do this?'" he says, adding that his team had to resort to creating automated tools for mapping and translation, and faced difficult evaluations. "It's not that you don't understand," Sheinheit comments. "But sometimes you're surprised by the complexity of it."
Sheinheit identifies the domain separation and establishment of universal e-mail around the globe as the other great technology challenges. "We had to go into every single country and every major office to do that," he says.
The ability to take on such challenges was supported by a superstructure of accountability, process and governance shared by the entire organization. In a departure from common business practice, CEO Benmosche determined that due diligence, and time and value commitments would be carried out by the same people responsible for delivering them. That involved creating 14 integration teams headed by senior vice presidents and comprising about 200 individuals. "The folks coming up with the plan, commitments and goals were the same people that then had to execute," Sheinheit notes. "There was no handoff."
The degree of accountability gained by the gambit carried an inherent risk, Sheinheit observes. "We had to convince people that we could control the secrecy of the deal while including so many people in the process," he says. At the same time, MetLife leadership also enforced a high degree of transparency by mandating that weekly status reports circulate throughout the entire organization—from top to bottom.
Phase-Gated Review
But perhaps the greatest success factor was the establishment of a task life-cycle methodology, which Barone says is vital to understanding the entire integration. Run by Janis Egelberg, vice president, IT enterprise technology, the Phase-Gated Review Process, as it was known, involved major project phases punctuated by review "gates," at which point a team of core participants would vote as to whether the project was ready to pass to the next phase.
One of the process' key features was that the participants encompassed various oversight standpoints, according to Barone. "Having audit there right next to IT, right next to PIMO, right next to businesses, you never had to have multiple governance activities," he comments.
Another key was enforcement of common terminology. "Everyone submitted the same types of information," says Egelberg, who presided over more than 1,300 reviews. "Having everyone speaking the same language made processes go much quicker."
That speed was essential for avoiding many of the pitfalls of mergers that often end up dissipating anticipated value, Sheinheit asserts. "With speed, you get the attention of everyone on the same thing at the same time," he insists. "It's amazing how much efficiency and quality is driven by the fact that you're not in stop-and-start mode," Sheinheit adds. "What gave me confidence throughout [the integration] was that we had the details defined and we had all eyes on it at the same time. That's what gave us the ability to do this within the time frame."
Another of MetLife's guiding principles for the initiative also fostered the need for speed: "surface issues quickly." But individual example played as much a role as methodology in ensuring fidelity to the ideal. Sheinheit relates that early in the integration process, Benmosche asked him about a problem that had arisen. "Where have you escalated it to?" the chairman asked. Sheinheit replied that his team was working on it.
"Don't sit on it," Benmosche admonished. A week later, while revisiting status questions, the unresolved problem resurfaced. This time, according to Sheinheit, "[Benmosche] said to me, 'Give me so-and-so's number; I'm calling them directly!' That's the level of escalation that we're talking about!"
MetLife/Travelers Life & Annuity Integration
Lessons Learned
Project planning: "We didn't realize the level of work we would have to put into training the company on project planning and what it was going to take to get the tools in place to manage work of this magnitude."
Locking down test capabilities: "In order to achieve the results we did, we had to build our test environments, and lock down test scripts and capabilities. We got better at this than ever before because we knew that once we got into the testing period we wouldn't have time to fool around."
Locking down requirements: "Part of keeping to the critical path was locking down requirements from the business users and really holding their feet to the fire in order to get those requirements defined."
No good deed goes unpunished: "By pulling this off, we've changed people's perspective of what's possible. Now, when we give people estimates, they say, 'How can it take so long? You did Travelers in no time!'"
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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