John Chu's advice to senior insurance technology executives is to "act and think like a general manager, not a technician." It's easy for Chu to follow his own advice, based on both his finance and consulting backgrounds, as well as the role he has assumed as senior vice president, e-business and technology, for The Hartford's P&C company.
Chu joined the carrier in 1999 to manage strategic business development for the company's personal lines unit, of which he later became CFO. In his current role, which he took on last fall, Chu has begun a multiyear transformation of the P&C company's technology organization, for which he says a general manager approach is essential to success. During his first year, Chu restructured IT as a shared-services organization consisting of four distinct units.
A CIO organization is composed of CIOs from each of the lines of business and reports to both Chu and the line-of-business heads. That group is regulated by a strategy, planning and architecture organization that has responsibility for governance, architecture and demand management. In turn, both of those groups are supported by a CFO organization, which manages finance, and an HR organization. The latter two "are the stewards of our assets," Chu explains. "I wanted to make HR and finance two critical levers for the organization in terms of driving change and transformation," he adds.
Chu says his mission is to build on a vision established four years ago by Joe Gauches, the now-retired EVP for e-business (and a 2003 Insurance & Technology Elite 8 honoree) and Dave Zwiener, the P&C company's president. "The reason that we were looking at a general manager role is that The Hartford is a 200-year-old institution known for good, steady product manufacturing discipline and a great underwriter," Chu explains. "We continue to think of underwriting as a core staple of our value proposition, but more and more, as we get into the next decade, IT, distribution and service become competitive advantages in determining winners and losers."
In order for The Hartford to make that transition, its IT organization has to make some fundamental changes, Chu says. That includes three goals: manage total cost of ownership; serve as a strategic partner to enhance existing operating models or create new ones; and develop a more consultative talent base.
Chu has also outlined three ideals to guide the company's transformation. The company must build, he says, to be distinctive, simple and innovative. "It's about creating a distinctive operating model surrounding a simple architecture, yet innovative in terms of its deployment," he says. "We will be distinctive in how we manage this as a business, because we're going to be looking at service-oriented architecture, and in terms of being thought of as a consultative partner. 'Simple' is a mindset focused on simplifying everything we do and simplifying our architecture. We're going to be innovative because we're going to look at new things and help be drivers of the organization as a whole, not just from a technology standpoint."
In Chu's vision, CIOs play a vital role in advising their business partners on what they should not do, as well as providing the technological expertise to realize strategic ambitions. "I want CIOs to have direct accountability to our business partners so that they can work with them in developing the businesses' IT strategy," Chu says.
By employing the operating models to achieve this equilibrium between business and technology, Chu intends to foster a degree of "healthy tension," he relates. Each of the business units will focus on its own agenda and push to have it realized. But, in order to build and maintain the best enterprise technology, it's necessary that IT set parameters.
"One of the traps that my peers get into is that they try to be the best friend of everybody in the business and they end up doing everything," Chu argues. "I'm not saying that I can't support all the agendas, but I'm trying to create an architecture with some degree of integrity. While we are by no means going to do this at the expense of the business, in managing IT we need to work with the business in a more collaborative way."
In addition to the restructuring of IT, another major achievement during Chu's first year as a senior technology executive was the laying of the groundwork for a fact-based analysis of the organization's assets. "My team has done a very, very thorough job of understanding where, who, how, when and why we spend money," Chu relates. "If there's one thing I've brought to the table from my finance background, it's having a very good fact base to work off to build out our transformational agenda."
Chu doubts that many organizations have achieved the granularity that he is driving in The Hartford's inventory effort, which is guided by a philosophy of transparency. Chu wants to ensure that business partners understand all the implications of their IT investments - such as knowing that purchasing a certain application will require the purchase of an additional server. Chu hopes to foster the ability to construct a holistic view of any given investment within the entire systems architecture and cost structure. "By having information the way that we're gathering it, we'll be able to create complete transparency into all that we do," he asserts. "As a former customer of technology, that's something I think all business partners would want from their technology organization."
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