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Global Operator Embraces Both Centralized & Decentralized IT

Manulife Financial uses its century-old global scope to maximize its technology budget. The insurer reduces operation costs through shared data centers in different global regions and by outsourcing its infrastructure.

Operating globally is something that Toronto-based Manulife Financial ($147 billion CD in assets) has done since the telephone was in its infancy. More than a century later, the insurance carrier—which has operations in the US, Canada, Germany, China, the UK, Japan, Barbados, Bermuda and seven Pacific/Asian countries—has grown considerably and, fortunately, has a few more technological resources to work with.

"Since Manulife has been global for so long, running a global corporation is second nature to us," says John Mather, executive vice president and chief information officer, Manulife Financial. The firm's technology mission is to support business units with reliable, secure and responsive systems that reduce business unit operating costs, provide "first-quartile" service to customers and distributors, and monitor investment, financial, credit and other risks managed by the organizations's business units.

Global IT operations at the carrier of investment products, reinsurance, real estate and risk management services are both centralized and decentralized, according to Mather. "Manulife always looks to establish economies of scale across the enterprise wherever it is possible," he explains. The carrier has grouped its technical infrastructure into units that it shares across its regional divisions. For instance, a North American infrastructure and operations group is shared by the US and Canada. Also, in Hong Kong, a central data center and communications operation serves its seven Pacific/Asian territories, as well as its two-year-old Japanese operation.

Unique Systems Requirements

Developing unique systems for certain territories is often necessary for a number of reasons. For instance, the mainframe-based system used at Manulife's headquarters would have been too difficult and costly to implement and maintain when its Southeast Asian operation—composed of China, Vietnam, the Philippines and Indonesia—was starting up. Sharing of the system would have been impractical because of needed customizations for language, regulatory requirements and customer service needs. Also, remotely maintaining the Asian system from North America would have proven costly. A simple, scalable PC server-based system—which supports individual business, agency compensation, computer proposals, accounting, imaging and workflow, e-business, agency sales support, customer service manager and customer workbench—made the most sense for the operation.

IT groups within the individual business units focus on application support and new projects within their respective groups. Although decision-making independence "allows Manulife to be very nimble in its respective markets," says Mather, there are advantages to centralizing the process. Because of this, a mixed approach is taken by the carrier. A centralized global decision-making process, referred to as Information Systems Group Decisions, takes place among the 12 business units that the carrier comprises. The units share common financial and budget planning, as well as strategic and architectural views. Additionally, a common policy and administrative view that focuses on security and privacy is taken throughout the organization.

Although Mather is Manulife's only CIO, business unit vice presidents at the carrier are given CIO-type responsibility over their respective group's IT unit. Information systems vice presidents representing all of the territories and business units convene for monthly half-day meetings. Typical agendas, says Mather, include reviews of new project requests, monthly budget progress, staff transfer and promotion discussions. The agenda is followed by a general discussion roundtable. Mather also meets one-on-one, usually through videoconferencing, with these managers on a monthly basis. And there are regular project status and steering committee reviews of the larger global information systems group.

Setting Priorities

IT project prioritization takes place on both a regional and local country level. For instance, if more than one country in one area needs the same solution, the country-level priority drives up regional priority. But local country priority has to comply with regional priority when it comes to the country deployment timetables.

IT operations throughout Manulife are budgeted on a global basis and then allocated back to the organization's business units. Spending is tracked globally in three specific areas.

Infrastructures and operations—essentially the cost of servicing products on a day-to-day basis—are among those areas. Additionally, spending on application support, which is primarily software maintenance of existing applications, is tracked globally. The third group, which, according to Mather, gets the most attention, is new project investments. These projects need to be proven to either reduce costs, or improve Manulife's market or service position in their respective business unit or country. Any buying decision involving more than $1 million is reviewed by the office of the CIO. Technology spending of over $5 million must meet approval by Manulife's executive committee.

After going through its budgeting and approval process, Canadian operations recently automated many of the administrative functions. Repsource is the operation's secure advisor Web site, which includes more than 3,700 pages of product information, company and industry news. A public area was recently added to the site to help market products and services to other distributors. Enhancements have also been made to the company's Group Benefits customer technologies. Recently, the group has implemented a call center, a plan member Internet site and an electronic claims system.

Manulife's Asian operation has been working on a number of initiatives, as well. Recent implementations include a division-wide administration system for all individual insurance products, allowing each operation to develop new products more quickly and improve customer service. An agent portal was recently completed, enabling agents in Hong Kong and Taiwan to access company information. Also launched were a wireless application protocol (WAP) service for plan participants and a Web site for employers enabling Manulife's Mandatory Provident Fund customers to manage day-to-day administration of their accounts.

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