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10:54 PM
Greg Tranter, CIO, Allmerica Financial
Greg Tranter, CIO, Allmerica Financial
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Focus on Knowledge Transfer

Carriers can outsource to optimize their cost structure, but for maximum value they should also consider leveraging sourcing partnerships to refine internal IT capabilities.

Industry analysts' predictions of increased technology spending are good news, given the lean technology budgets of the past few years. Companies that now find themselves enjoying increased technology spending may want to look to their sourcing partners to provide not just scalability of resources, but also predictability of technology deliverables.

This is the approach that Allmerica Financial's (Worcester, Mass.; $26.5 billion in assets) IT division embraced over three years ago when faced with significant decreases in technology spending. At that time we engaged Keane (Boston) to be our sourcing partner.

Predictable Technology Delivery

While the primary focus of our relationship was to help us achieve a variable staffing model that would enable scalability at affordable rates, equally important was the knowledge transfer they could provide to our employees to help refine our internal software engineering practices. This knowledge transfer helped enhance the predictability of our technology deliverables from a time, cost and quality perspective.

Keane utilizes the Software Engineering Institute's Capability Maturity Model (CMM) framework of procedures for application development. A significant component of our engagement with them was their agreement to share their framework with us and help us tailor the procedures, tools and templates to fit our organization. This was not without its challenges. Because we did not create the framework ourselves, the buy-in by our own employees took a little longer than we had hoped. But when all was said and done, the tailoring approach enabled us to move our organization from operating at CMM Level 1 to being independently assessed as CMM Level 3 in less than two years.

Among the beneficial and practical outcomes of the arrangement with Keane is the transparency the process brings to our organization.

For instance:

-Whether Keane or Allmerica employees are doing the work, similar procedures are in place regarding requirements-gathering, project-estimating and statements of work.

-The use of consistent processes, tools and templates across projects enables a smooth transition as work or resources are reassigned.

-Predictability and greater accuracy are brought to the project-estimating process, since the project risks are identified and agreed to up front.

-The framework recommends a support infrastructure - which we have in place - for continually assessing compliance with software engineering practices and productivity management, as well as focusing on continuous improvement of the practices and tools. For example, we have established the Software Engineering Process Group, which is responsible for driving and managing the continuous process improvement efforts within our organization, as well as controlling the pace of change to the procedures. We also have a Software Quality Assurance group that audits the technology projects and assists the project teams in ensuring institutionalization of the practices and tools within the productivity management framework. And we have established a Project Management Office that monitors and identifies best practices for project management, working closely with project managers and facilitating monthly technology project reviews.

-Peer reviews are now a key part of our application development processes. These include walk-throughs of all technology deliverables, including customer specs and the code developed for a project, which helps identify defects early in the development life cycle, reducing the number of post-production errors.

The implementation of the CMM framework and the ultimate achievement of CMM Level 3 assessment is just the beginning. The challenge is ingraining the use of these practices and tools throughout the IT organization for every project. The fact that our IT staff - whether Keane or Allmerica employees - are using the same framework reinforces the institutionalization of CMM.

In these times of anticipated increased technology spending, organizations that are under pressure to increase capacity and get the most for their technology investments would be wise to look to their sourcing partner for relief on both fronts.

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