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Global Unity

Worldwide players move from a more federated approach to technology to one that leverages assets across global operations.

Given the highly regulated nature of the insurance industry, companies that act globally in terms of their overall market footprint and financial operations tend to act locally when it comes to insurance operations and technology. However, many companies are now moving to maximize the opportunities that result from a more unified approach to technology.

Whereas in the past many of the large global insurance players allowed regional operations to make their own decisions and exercise local control over buying and managing vendor relationships, "they have been starting to take advantage of their global reach and size to drive to common standards that they deploy around the globe," claims Paul McDonnell, managing director and insurance segment leader, BearingPoint (McLean, VA). "Surprisingly, many of these companies who have had major operations in place for over a decade in North America, for example, never took advantage of economies of scale that could be gained and allowed multiple infrastructure organizations to exist."

The new paradigm, according to McDonnell, is to create a common networking infrastructure, common data center strategy and an approach where the infrastructure is managed by a single organization on a global basis. Within that common organizational structure, technology organizations are developing common approaches to applications maintenance and development. Mated to the "any-shore" outsourcing philosophy, companies are looking to offshore wherever in the world makes best business sense. "They're focused on developing capabilities where they can do projects where pieces of the team are scattered around the world, or are brought in from various places," according to McDonnell.

Global Guidance

Over the past two years, Paris-based AXA Group ($863 billion in assets under management) has been moving down the road to a more universal technology environment, says Bill Levine, executive vice president and CIO, AXA Financial (New York), AXA's US operation. To ensure arrival at that common, unified state, AXA formed a small, central technology review group that is responsible for architecture and sets guidelines, rather than hard imperatives. "The assumption is if you have something in place, that's fine, but if you're going to build, here's how you need to build it," Levine says.

The advantages to moving to greater global technology unity are manifold, Levine goes on to explain. While core insurance applications will inevitably run locally, many applications and functions need not. "You get tremendous leverage-you get scale from a processing and a procurement point of view, and if you do it right, your disaster recovery can come with it," Levine comments. Standard, more horizontal technologies can be applied to the development of Internet and intranet applications, as well as for areas such security, human resources, finance and training systems, he adds.

Sharing across AXA's worldwide technology community is facilitated through its Paris-based Global IS organization, which comprises the architecture group mentioned, a consulting and solutions group, and security and intranet responsibilities. Within the global group, last year AXA placed all its infrastructure under one unit-AXA Technology Services. As an example of how the community works, Levine cites AXA Financial's development of a customer information file (CIF). "Our friends in Belgium decided the CIF would be the best platform, and while they had their own tweaking to do, they came here for a couple of weeks, walked away, and ended up having their own system much quicker," he says.

But Levine stresses that sharing best practices at AXA goes much farther than just IT. "There's a tendency to get locked into thinking about code, but it's also concepts and techniques, such as how we do governance," he says. "We're very proud of how we do governance at AXA Financial and other AXA companies have looked at the way we do it and a couple are doing it that way."

A focus on unification of back-office technology is one way to approach the benefits of standardized systems. Another trend driving technology unity is the goal of presenting one face to the customer, according to Harris Gordon, a senior advisor at BearingPoint.

In general, the implementation of CRM solutions has suffered from the same localized approach global firms have taken toward technology-basically, leaving regional operations to explore their own options, Gordon argues. The result was "different things going on all over the place, and none of it coordinated," he says.

Even companies that have some kind of technology governance continue to allow decentralized CRM strategies to happen, according to Gordon. "The approach is 'We let each company or area do its own thing, and then we figure out which is strongest and we will probably put that across the world,'" he claims. "I've seen tons of money just blown away."

However, over the past two years, thinking about CRM has changed for the better, Gordon remarks, with companies following an approach that seeks standardization.

Cultural Sensitivity

"Corporations across the world are simply saying, on a global basis, 'If we're going to do this application, if it's going to be around a customer warehouse or campaign management tool, for instance, we need to drive a similar application through the entire organization,'" Gordon observes.

Pushing CRM technology consistency through an enterprise brings certain challenges, however. As opposed to, say, the implementation of a core financial application, successful CRM development depends on building functionality that is sensitive to local cultural norms, Gordon notes. But while doing that requires something more than "tweaking," from one cultural market domain to another, companies are still far better served by having a universal platform capable of supporting a global customer picture, he adds.

Any company that focuses on an elite set of international high-net-worth customers will want to be able to have the ability to have a global customer picture, according to Gordon. "When you've got every country doing its own thing, it's impossible to broaden the number of products per customer because you've got an incredible patchwork of applications," he argues. "That's a good reason to standardize on something."

Standardization on CRM applications is only one aspect of how ING Group ($467 billion in assets) is working to create a consistent customer experience. At the Amsterdam-based firm, IT focuses on a project with the intent of helping the business spread awareness of the ING brand, according to Raymond Karrenbauer, chief technology officer for ING US Financial Services, the company's Americas operation. In step with a worldwide advertising and marketing plan, IT is working to create a common look and feel for the technical channels that customers use to interact with ING. "You'll see local customization to service markets, but from a global perspective, the navigation, and the tracking, and the work behind it is aimed at being very consistent with the brand," he says.

Like other large global insurance companies, ING has acquired a number of companies in recent years whose technology, cultures and brands will require some time to assimilate into a universally consistent storefront. Driving technology support toward that goal is the company's Corporate Information Technology body, which reports directly to ING's board of directors, Karrenbauer relates. Within that group is a governing body called the IT Leadership Council, which contains five major advisory committees that deal with questions of standards, infrastructure, architecture, security and applications.

Balancing CRM Imperatives

The way the governance bodies are driving CRM functionality is influenced by a combination of the advantages of single platforms and the opportunities inherent to certain types of customers, Karrenbauer relates. "There are certain business units within ING that have more of a global customer base that they need to address," he says. "For example, asset management has some very high-profile global customers."

For such customers, ING maintains a repository rather than a customer file, Karrenbauer explains. "I think the way to describe it is there's a customer segmentation that happens in our database at a lower level," he says. For much of the insurance-based business, however there is neither opportunity nor value in globalizing the data, given the business's more local character. That data, accordingly, is segmented locally to the call centers and other channels that service those channels. Nevertheless, "no matter which way the customer information comes through, the transactions are aggregated in a common way, so we can look at the customer one way, from one view, one application," Karrenbauer notes. "Siebel Systems, San Mateo, CA is the application we use on a global basis, and on a more local basis we tend to work more with PeopleSoft Pleasanton, CA and SalesLogix Scottsdale, AZ."

Centralized Information

Whatever the localizing tendencies of large parts of ING's business, the company is as focused on a unified, internal global orientation-including all its implications for technology infrastructure decisions-as it is on brand uniformity. "We are actively, and on a global basis, working toward identifying what data has value being centralized, such as customer information, agreement information or product information, and we are rolling that out hand-in-hand with information quality management operational procedures," Karrenbauer relates.

Such initiatives are essential to a successful global-branding effort, especially as they relate to how IT can most effectively play a role, argues Karrenbauer. "At the end of the day, if you look at the core functions that exist within a financial services company, IT tends to be the organization most removed from dealing directly with the end customers," he says. "That being the case, we have a very important responsibility in delivering capability to those customers and looking and acting as 'one ING,' because we are central to making a lot of these things happen behind the scenes. [email protected]


Telecom Opportunity

Higher line speeds and lower line costs yield Prudential attractive global network options.

As Newark, NJ-based Prudential Financial's international insurance and investments division moved to a business model focusing on high-net-worth clients, Irene Dec, vice president of international operating management, found that increased telecommunications line speed and decreased costs meant a significant opportunity for efficiency.

Technology support for Prudential Financial's (Newark, NJ, $422 billion in assets) international investment operations is currently located in a data center in London that provides 7/24 application support and programming staff. Prudential's international investment operations consist of three branch offices in Asia and four in Europe.

As Dec reviewed her options, she asked a question that she recommends all business leaders ask: "Can I change my operating model as a result of the telecommunications improvement?" Dec found that she could.

Given that Prudential had made a strategic decision to build its global networks to allow quick plug-and-play capability, improved telecommunications channels opened up the possibility for a business process outsourcing approach to supporting investments operations. "Whereas before you had to work by more local, in-country solutions, you're now able to expand beyond that," Dec argues. "Where the data sits is really no longer a telecommunications issue."

Looking to go live by this fall, Prudential is currently finalizing contracts with business process outsourcers in New Jersey and the UK to take on back-office operations, including custodian, clearance and settlement. "The technology impact of that is that many of the applications sitting in our data center will be eliminated," Dec explains.

From London to Roseland

In deciding what to do about the data center, Dec paid a visit to Prudential's Corporate Technology Services (CTS) organization in Roseland, NJ. "I sat down to determine what the expense to our business would be if we were to take the remaining applications that require 7/24 data center support and to see if there was any leverage opportunity to reduce expense," she recounts. In fact, the move of data center operations from London to Roseland was calculated to result in expense reductions of almost 50 percent.

Dec's organization is also moving its support desk function to CTS, which already has a global help desk in place. "The reason that is an opportunity is the support folks can access the applications in a way that's invisible to them, as those applications are to a financial advisor, a client or our business administration folks," Dec says. "In terms of performance, it feels like it's around the corner when it may be on the other side of the world."

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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