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Management Strategies

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Manulife EVP and CIO Joe Cooper Takes Federated Approach to IT

Manulife EVP and CIO Joe Cooper balances local and global concerns within a collaborative, federated technology organizational approach.

Toronto-based Manulife has what Joe Cooper, EVP, global services, and CIO, calls a very diverse footprint. According to Cooper, the company's success continues to owe much to regional autonomy across its global operations. But, Cooper adds, when he joined Manulife in 2007 after 27 years with IBM, he saw the opportunity to capture efficiency gains and drive service improvements through the establishment of a federated technology organizational model.

"From working with Manulife during my years with IBM Global Services [running the firm's insurance outsourcing business], I could see the value proposition of a localized model, but the way the company had run technology was extremely independent," Cooper says. "I was asked to come in and take more of a global view and put a global strategy in place."

As a result of Cooper's transformation efforts, Manulife (more than $400 billion in assets) has enjoyed more than $100 million in savings, a significant portion of which has been reinvested in new development, he reports. Among the initiatives Cooper has driven is the restructuring of infrastructure outsourcing, including a seven-year, $600 million deal with IBM (Armonk, N.Y.) that closed this July. In addition, in April Manulife concluded a $300 million deal with CSC (Falls Church, Va.) to transition all of the insurer's computing facilities into six data centers. The carrier also has replaced its entire global network with a VOIP platform, has consolidated onto a single email system and is currently rolling out a global HR system for all 25,000 of the company's employees in 21 countries.

The Manulife enterprise is divided into country-based operations, including its traditional Canadian businesses, its American operations added through the merger with John Hancock in 2004 and various other businesses globally. "We've been in a lot of places for more than 100 years," Cooper notes. "We're in 10 countries and territories in Asia, with big operations located in Hong Kong, Japan and Indonesia, as well as a dramatically growing business in China."

Matching the Company's DNA

Manulife's traditionally decentralized approach to business operations helped define the company's DNA, Cooper says. So his task was to modernize the technology infrastructure in a way that conserved the unique capability of the businesses to penetrate their respective markets, but to do it in the most efficient manner.

That was change enough, suggests Cooper. The company was so decentralized that the amount spent on telecommunications was unknown. "AT&T's analysis was that it looked like our global network had been built by three companies that never talked to each other," Cooper comments. "I can tell you that if you don't know how much you're spending, you can save money."

Manulife's technology leadership was similarly isolated, by Cooper's account. "When I came in, I pulled all the CIOs together in the first couple of months I was here and said, 'OK, what do you guys do when you get together and talk?'" he recalls. "The answer was, 'This is the first time we've gotten together to talk about strategy.'"

In his recasting of the technology organization, Cooper says, he had to emphasize to both technology and business officers that leaving behind a decentralized model did not imply the embrace of a centralized approach -- which in some respects might be easier to do. In a centrally controlled environment, he continues, decisions are easy to make precisely because they render localized opinions moot. By contrast, the federated model engages all parties in the development of strategy.

"When I first came in and started talking about a collaborative business model and joint development of global strategy, there were people saying, 'This sounds like a secret password for centralized control of what we're doing.' I said, 'I'm not here to drive strategy out of the North Tower at 200 Bloor Street [Manulife's headquarters building in Toronto]; this is going to be something we're all going to develop holistically across the business."

A 'High Burn'

Cooper calls the federated model a "high burn" approach because of the intensive involvement required in balancing the local and global aspects of management. "The federated model ... takes a lot of energy and it also takes some mature adults to sit around the table," he says. "Anybody who has the 'It's my sandbox' attitude can't last long in a federated governance model."

Some territorial issues were inevitable, Cooper admits. "There was some resistance to some decisions early on, before we could actually lay out some clear strategies and secure agreement across all the divisions," he recalls. "They may have to expend a bit more energy and time and might have been told, 'We have all agreed on going this way.'"

But as time went on, the businesses realized that the global strategy didn't constrain their uniqueness or autonomy in spending money, developing products and channels, and servicing clients, Cooper says. "I said from the beginning that my intention was never to stop a business objective from being executed because of a governance approach," he explains. "Our strategy is to enable business processes. Toward that end we have laid a foundation of infrastructure that is secure, robust, and as variable and utilitarian a model as we can get to. We want to have highly flexible, state-of-the-art applications and information running over that infrastructure."

Cooper describes Manulife's technology strategy as having strong foundations: infrastructure services, application services and business processing. "The way that we view the global strategy is that all of those services exist in order to enable our business processes to meet our objectives," he says.

Within Manulife's federated technology concept, application resources reside in the business units, rather than in any central function or even at a divisional level, Cooper adds. "Having those resources in the businesses themselves provides a pretty unique resource model," he asserts. "In many business units one executive sits over the operations resources and the applications resources, so there's good integration between the business requirements in that space and how initiatives get executed."

Cooper boasts that Manulife runs an "incredibly lean" infrastructure and corporate technology area, which he suggests presents an opportunity to begin investing in the renovation of core technology platforms and the evolution of business intelligence and data analytics, as well as other forward-looking technologies. "You have to make a heavy investment into collaboration, and to support that you have to have seamless flow and connectivity," he insists. "With those things going well for you over the coming few years, you'll be able to provide better customer service and make faster, better-qualified decisions."

Cooper notes that the success of the federated model already has inspired imitation. In 2010 Manulife's technology organization kicked off an operational-excellence initiative aimed at driving efficiencies in call centers. Now, "We're doing almost the exact thing in operations," Cooper says. "It's the same federated approach, facilitation, collaboration, and the same hesitation from the business, because when you get into operations, you're getting a bit closer to their home."

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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