Customer Insight

Having recently been promoted from CIO to senior vice president of customer operations for Madison, Wis.-based CUNA Mutual Group, Rick Roy attributes a large part of his success to his experiences working for Dennis Kuester, chairman and CEO of Milwaukee-based financial institution Marshall & Ilsley Co. ($54 billion in assets), when Roy was an executive at Marshall & Ilsley's Metavante tech subsidiary. "Dennis gave me an opportunity to run a merger integration effort, and it was a major turning point in my career," says Roy. "I walked away from that experience with a completely different set of skills and accomplishments," he adds.

"One of the key things I learned from Dennis is focus, and that on any given day there are a hundred things that are important and people will come at you from all angles," Roy continues, describing his leadership style as that of "an effective coach." "I teach people to continue to learn about themselves and to accomplish things that they may not either see or think they can do," he says.

During his two-year tenure as CUNA Mutual's ($2.64 billion in annual revenue) CIO beginning in 2003, Roy headed an IT staff of 700. He managed to reduce the carrier's infrastructure costs by $14 million by strategically managing relationships with vendors and shifting IT spending. Roy led the push to invest in new products, new development and new applications, such as enterprise resource planning and customer relationship management initiatives; a new claims engine to facilitate straight-through processing; and a marketing database. "As a result of changing the mix of investment, we were able to deliver a number of strategic projects to the business that resulted in over $38 million in savings to the company," says Roy.

CUNA Mutual, a multiline carrier, primarily serves credit unions and their members. Over the past year, a rapidly changing credit union marketplace has forced the carrier to refocus on how it serves customers and how to best use technology such as call centers to interact more with customers, according to Roy. "It is requiring us to rethink how we serve the marketplace and how we focus on different segments of our customer base," he says. "We are leveraging technology to see how customers interact with us and how we can deliver better products and service to our customers."

Because maintaining focus is key in such a rapidly changing marketplace, CUNA Mutual created the role of senior vice president of customer operations and appointed Roy to the position in 2005 to improve customer service through enhanced technology. Roy now is leading the drive to enhance customer service through the consolidation of customer service facilities and operations, which includes call centers, claims operations, product administration, billing and collections. By uniting various functions and offices and enhancing technology through legacy system consolidation, customer service representatives will be able to interact directly with customers and gain immediate access to complete customer information, Roy stresses.

"We are really embarking on a large transformation journey of our own operations functions, so the focus of transforming the service delivery and improving the end-customer experience and how they interact with the company is a more direct connection to the customer," says Roy. The carrier hopes that its current three-year project to streamline the product administration workflow and consolidate various legacy IT systems will allow it to process claims faster and reduce the cost of IT maintenance, he explains.

Orchestrating the Transformation

Throughout the eight months that the project has been under way, Roy says the main challenge he has faced is the "orchestration" of the transformation. "The main challenge is doing it in a way where we can improve the business and improve service delivery to our customers while at the same time maintaining the service levels we have already established," he elaborates. Accenture (Chicago) has been helping CUNA Mutual build a business blueprint to map out the stages of the transformation.

One of the first and most significant stages of the customer service effort is the construction of a 108,000-square-foot customer operations center in Fort Worth, Texas. Though construction of the facility will not be entirely finished until spring 2007, approximately 85 customer service representatives began working within the finished sections of the building in October 2006. Once the facility is complete, it will have the capacity to accommodate 750 seats, which will allow CUNA Mutual to bring all of its customer service representatives in the Dallas/Fort Worth area under one roof, giving customers easier access to experts, according to Roy. "It is a fairly substantial operation center for us," he says. "We are very excited about the opportunities there."

During this consolidation project, Roy also will be fostering a broader transformation within CUNA Mutual to improve sales and product organization based on customer feedback collected from customer-facing representatives and the Internet. "We have a bigger change underfoot in our company where we have literally looked across our organization to drive improvement in the operational experience and at the same time drive operational efficiency," says Roy.

The effort has led CUNA Mutual to reexamine its use of customer relationship management (CRM) technology. Because CRM was fragmented across the enterprise, it was difficult to use the customer data for business decisions or to improve service, according to Roy. To drive more operational efficiency, the carrier stepped back from investments in CRM technologies 18 months ago to refocus on the consolidation of legacy CRM systems and streamlining existing technologies.

Roy currently is examining with business leaders how to leverage CRM technology to maximize a return on investment. According to Roy, once the consolidations are complete, he expects CUNA Mutual to realize some return on previous CRM investments because the customer data will be aggregated and easier to manage. "You can spend an awful lot of money driving toward the holy grail of customer information, and if you are not really sure what it means or how you are going to use it, all you have done is spent a lot of money," he says.

And keeping costs in check is crucial, adds Roy, who works hand in hand with Tom Gosnell, CUNA Mutual's current CIO, on the IT budget. "The cost side of the equation tends to be much more infrastructure focused," Roy says. "But I try to balance that by looking at how we can optimize the business value that we can deliver to our internal customers within the application and development world."

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