Customer Focus? Now More Than Ever

THIS ISSUE'S EXPERTS

JOHN HODGE
Global CIO, XL Global Services
(Greenwich, CT); Elite 8 1999

JUDY CAMPBELL
CIO, New York Life (New York);Elite 8 1999

BILL FRIEL
Senior Vice President and CIO
Prudential Financial (Newark, NJ);Elite 8 1999

DAVID ANNIS
CIO, The Hartford
(Hartford);Elite 8 2000

GEORGE MCKINNON
Vice President and CIO
Nationwide Insurance (Columbus, OH); Elite 8 2000

Q: Is the current economic climate affecting your organization's plans for spending on customer relationship management (CRM) and other customer-focused technologies? How does spending in this area compare with spending in other technology areas?

A: John Hodge, XL Global Services: Understanding our clients is a critical part of our business. XL has continued to experience significant growth through acquisition and this, of course, puts pressure on our ability to consolidate client information. We are, therefore, putting an emphasis on data warehousing initiatives that can pull our client information together and CRM technology to allow us to better understand our clients' business. We are increasing our investments proportionately, and in actual dollars, in areas which will allow us to understand our clients better.

A: Judy Campbell, New York Life: The current economic climate affects spending across the enterprise. Spending on customer relationship management is necessary in order to operate more efficiently and improve customer service. By eliminating steps in the service process, we can enhance what we are able to do for customers in the end and reduce costs. We are looking at investments aimed at cost containment and cost reduction. Because there are opportunities for streamlining and improving processes, this is an area that we will be paying more attention to.

A: Bill Friel, Prudential Financial: The current economic downturn quite simply mandates that investments in CRM and other customer-facing technologies have a faster, larger and more certain return. This is no time to abandon the foundational investments of the past. Nor is it a time when we can afford to be highly speculative in assigning discretionary IT dollars to "experimental" projects.

A: Dave Annis, The Hartford: One of The Hartford's core objectives is to provide customers and distributors with extraordinary service. As such, we continue to invest in service-related technologies such as Web-based services, call center and customer relationship management—regardless of the economy. In fact, we view the weak economy as an opportunity for strong companies to grow. Continued investment in these key areas remains very important to us.

A: George McKinnon, Nationwide Insurance: No, the economy is not affecting our investments in customer-focused technologies. We expect spending on CRM to grow faster than spending in other parts of IT through 2002. Although this is a very challenging time for our industry, we believe a strong focus on the customer will allow Nationwide to provide even better service to our policyholders and agents. Customer relationship management at Nationwide is a broad-based initiative that affects service centers, agents, the Internet and many other parts of our business. Nationwide will continue to invest in CRM because we believe it makes good business sense to do so.

Q: What is the biggest challenge your company faces in terms of improving customer service and retention? What about the insurance industry as a whole?

A: Hodge: We need to ensure that, as we acquire companies, the relationship with our clients and brokers remains strong and that the transition into XL is as seamless as possible for them. Our underwriting and marketing staff do a tremendous job in this area. Our biggest challenge is to manage the multiple systems we inherit, with multiple coding systems, into an information architecture that effectively supports client service. The challenge is magnified as our business becomes increasingly global.

A: Campbell: To improve customer service and retention we need to streamline customer response so that it's quick and to the point. Because the cost of bringing customers in is so great, it makes sense to concentrate on service that will keep retention high. Part of that process is to identify those customers we most need to focus our energies on and then identify the steps that need to be taken to improve their personal customer service experience.

A: Friel: A slowing of performance in the stock market may in fact make life insurance policies and annuity contracts an even better investment. Enhancing our self-service channels, whether on the Internet or through telephone call centers, will remain an important and growing priority over the next planning horizon. These technology platforms need to be integrated with traditional platforms if we are to truly enhance the customer service experience.

A: Annis: In general, low frequency of customer interactions is a challenge for the insurance industry in building strong customer relationships. For that reason, it's even more critical that companies deliver whenever they have the chance to interact with customers. The Hartford's battle cry is: Know the customer, be courteous and responsive, provide great service. When you couple that with a great brand and financial stability, you can build lasting relationships.

A: McKinnon: The biggest challenge the insurance industry faces is meeting customer expectations for faster, better service in the face of rising loss costs and increasing price competition. Customers expect to be able to reach their insurance company at any time, by whatever means they choose: by phone, on-line or face-to-face. Customers expect complete, consistent, accurate answers to all of their questions, whether they are inquiring about the status of a claim or the cost of new insurance. Providing this service across all access points is a complex task. It requires a thorough, well-planned customer relationship management strategy and excellent integration between back-end databases and the agent's office.

Q: What are some of the key technologies in use at your organization that address these challenges? Are there any emerging technologies you think will play a role in helping improve customer service and retention in the future?

A: Hodge: At XL, we have a significant Siebel investment that is being extended within the group. We also utilize E.piphany in our e-business initiatives. These customer relationship management packages are supported by a variety of data warehousing tools. We also utilize groupware applications extensively to assist in the transfer of information between the account management teams. The mobile revolution is only just beginning and the demand for access to information anytime, anywhere, is going to increase. While the associated technologies will certainly assist the effective servicing of our clients, they do set some challenges for those that have to build the architecture and infrastructures.

A: Campbell: The main tools New York Life uses to address this are customer data warehousing and decision-support computing. These technologies can help us focus the company's efforts on customer retention. High-speed access on the Internet will play a role in improving customer service and retention, since with greater speeds customers will be more likely to handle their customer service needs on the Internet with greater ease and efficiency.

A: Friel: In order to incrementally improve our customer's ability to access self-service facilities, we have been actively engaged in rebuilding our Prudential Financial customer-facing Web site. PruFn.com, our new Web site, employs the latest in portal technology, message management, transaction processing, and content navigation to bring our customers the services they need through the Internet. In our call centers, experiments with such newly improved technologies as voice recognition and interpretation are aimed at improving both customer satisfaction and productivity. In addition, our customer information warehouse analysis capabilities provide the opportunity to tailor products and/or services based on customer behaviors.

A: Annis: The Hartford aggressively employs a variety of technologies to make us easier to do business with and provide great service to our customers. In the Web space, this includes portals, directory technology, XML, and business-to-business (B2B) links to distributors. We use sophisticated call-center tools, as well as VRUs, customer relationship management and imaging. Data warehouses help provide better customer information. The key is to bring all of these technologies together in an architecture where customers can get service when, where, and how they want it.

A: McKinnon: We employ a variety of technologies in creative ways to achieve specific business objectives. For example, we use geographic information systems to improve claims service, especially during catastrophes, when many policyholders can be affected and time is critical. We are also migrating our agent desktops to the intranet to streamline service, reduce costs and improve consistency. We also provide faster, more accurate access to core customer, policy and claim data through a single customer information file, a robust data warehouse, and middleware components that allow us to connect legacy systems to the front office in real time.

Peggy Bresnick Kendler has been a writer for 30 years. She has worked as an editor, publicist and school district technology coordinator. During the past decade, Bresnick Kendler has worked for UBM TechWeb on special financialservices technology-centered ... View Full Bio