The Guardian Life Insurance Co. considers itself much more than an insurance company and has plans to become even more diversified. Needless to say, technology will play a major role in helping to facilitate the company's growth.
For instance, Dennis Callahan, senior vice president and chief information officer, along with Phil Felice, vice president and chief technology officer, have launched an enterprise-wide strategy to develop a component-based architecture. The architecture, says Callahan, will help reduce project development time and IT costs, while improving technology return on investment. The improved development efficiency will be important, as IT must provide the technology to match New York-based Guardian's "aggressive 10-year growth challenge," Callahan adds. In fact, IT's role is so important to the company growth strategy that Callahan reports directly to Guardian's CEO, Joseph Sargent.
"The component architecture is a central piece of our strategy," Callahan says. "We are increasing the efficiency of our technology and our development. Many technology investments will be reused across different business units." While the impact of the architecture may not be visible to users, "the impact is far from invisible. We have a significant reduction in time to market," and many services are already benefiting from the technology. One such example is an electronic billing component that is being expanded across the company.
Additionally, Callahan reports that the component-based architecture is showing significant ROI with Guardian's HIPAA compliance initiative. "We are far along in our HIPAA development, but we have already seen a 75 percent reduction in development costs," because of components.
Not only must Callahan provide technology for Guardian's aggressive growth plan, but he also must manage to deliver results in a shorter timeframe and with a greater focus on expenditures. "The economy, technology and competitive pressure are definitely driving the focus on ROI," he says. "We are no longer in legacy-build cycles. The technology that the business needs to be successful is needed now."
And, according to Robin Appelbaum, assistant vice president, IT business planning, communications and development, Callahan is well suited to thrive in a rigorous ROI environment. "Since Dennis came on board" in late 2000, after most recently serving as CIO for the Financial Services Group of AIG, "there has been a definite shift to ROI prioritization when it comes to IT investment," Appelbaum says. "If you want to be in the game, there has to be a competitive justification and a good ROI."
Appelbaum is situated at Guardian to see both sides of the business/IT development cycle. In her position, Appelbaum works closely with Callahan, CTO Felice, and the business units. She is responsible for combining e-business priorities across Guardian's business units. "We are a matrix organization for a matrix organization," she says. "We take the IT/business alignment analysis and spread it across the entire enterprise. We make sure all units are operating on the same page.
"We make sure that any project has a sound business case and the ROI is there," Appelbaum adds, so various executives, including the CTO, IT CFO, IT COO and CIO, can sign-off on projects.
One area in which Callahan (and Guardian) is seeing a good return is offshore IT maintenance and development. "We have a significant emphasis on offshore," Callahan says. "When I came to Guardian, about one-third of the development was done by consultants from different firms. Now we have a small pool of domestic consultants and we have a rapidly growing relationship with offshore companies in India," including Covansys (Bangalore) and Patni Computer Systems (Mumbai). "These companies are doing about a third of the software development."
Although developing technology halfway around the globe presents some challenges, such as "changing the mindset of a domestically focused IT operation," there are advantages besides cost savings. "The time difference is actually an advantage," Callahan says. "If a quick fix is needed, it can be designed here during the day and implemented overnight in India."
Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio