I&T Executive Summit News: Elite CIOs Weigh-in on Industry Issues.

In the spirit of the now notorious Harvard Business Review article, a distinguished panel of CIOs was asked "Does IT matter?" at Insurance & Technology's Executive Summit 2003, held in Tucson, Ariz., November 9-12. The answer of Gary Scholten, senior vice president and CIO of Principal Financial Group was "It's all about alignment. Where there's good alignment, the business doesn't see IT as just a commodity—they see it as another arrow in their business quiver."

Scholten sat on the panel of Insurance & Technology Elite 8 2003 technology executives in the company of Linda Fraley, vice president and CIO, Lincoln National Life Insurance Co.(Philadelphia), and Bill Levine, executive vice president and CIO, AXA Financial (New York). Insurance & Technology's editorial director Kathy Burger queried the panel on the issues facing their companies and today's senior insurance technology executive in general.

Having taken the reins as CIO of Principal Financial (Des Moines) only a year ago, Scholten recalled being surprised by the amount of resources needed to meet regulatory challenges. From a strictly internal point of view, Principal's IT chief had focused on growing revenue, with particular emphasis on cross-selling opportunities. "Our IT has been strong within business units, but not across them," Scholten related. "So we've taken cross-unit approach [within] a distribution focus."

AXA's Bill Levine spoke of the carrier's continued emphasis on reducing costs while maintaining an impressive schedule of product delivery. "But the big thing for IT was re-engineering," Levine added, saying the organization was re-engineering services delivery, separating maintenance and development tasks, as well as more clearly defining career tracks. "We've redefined jobs and job families and made clear to people how to go from job to job and level to level," Levine says.

Fraley said her job has changed from the past, when "We used to spend much more time re-architecting and setting standards. Today I spend more time hiring people to do that, making sure we have the right people at the table and the right technology partners." Fraley finds herself spending "a great deal of time on the business side of the house, understanding strategic direction."

IT, Fraley argued, is one of the few areas that can make a cost impact quickly. "I look at technology to see how I can staff to reduce costs quickly without a lot of pain," she explained. "So I can tell the CFO 'We can take out X million as soon as we need to.'"

Process management is an important way to control costs on an ongoing basis, implied Levine. "Bringing projects in on-time and on-budget is a function of good project management and definition," he remarked. At AXA Financial, Levine related, "we have internal project managers who run projects and have established a good track record." AXA uses the Six Sigma discipline in a variety of areas, including IT, which has a "black belt" rating. "We've laid out the project development life cycle and we're trying to use Six Sigma to get project development running throughout the whole organization," he said.

Levine also lamented what he sees as the unwelcome burden of excessive vendor contact. "It's the 'spam' syndrome," he remarked. "I try to delegate meetings to senior vice presidents, but it's a daunting job. There's got to be a way to capture the opportunity."

Properly vetting vendors is one of the biggest challenges Fraley admits having to face. "Many calls are from vendors just beyond the start-up phase. Does [the vendor offering] fit in with our standards? What is the vendor's financial viability?" she commented. "These are not questions I can deal with in one phone call." Of the "spam" factor, Fraley added that "No one wants to deal with 200 e-mails, but I worry that I'm going to miss a bright idea."

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