In recent years, executives have bemoaned the difficulties of recruiting and retaining talented technology personnel. But that has not been a problem at Warren, NJ-based Chubb & Son, reports managing director/senior vice president, information technology, Charles G. McCaig. "We have never had a shortage of A-Team players," he notes. "One thing that strikes the people who come here is the level of talent."
Furthermore, McCaig emphatically gives the credit for his numerous achievements at Chubb ($25 billion in assets) to his organization of more than 1,500 information technology professionals, worldwide. "The ones who deserve the credit are the people," he declares. "The people I get to work with in IT are very dedicated and competentthey're really into it. They have a passion about what they do. We can really make a big difference. When you see what we've done over the past 10 years, and what we're currently capable of, and add them all together, you recognize that this is an impressive group!" McCaig boasts.
Part of McCaig's appreciation for his team's talents undoubtedly comes from his long roots in insurance IT. Prior to joining Chubb in 1991, he spent 25 years at Mutual Benefit Life, having "grown up there as an IT professional." He became the senior information technology executive at Mutual Benefit 1981, and eventually took on responsibility for non-IT functions in areas such as human resources and corporate administration.
McCaig subsequently joined Chubb as senior technology executive in 1991, following the failure earlier that year of Mutual Benefit Life.
However, while McCaig has held essentially the same responsibilities since he joined Chubb, the environment in which he operates has changed dramatically. Until 1999, IT was a classically centralized organization. But two years ago the company shifted to a decentralized strategic business unit structure.
"I have direct management responsibility for the corporate IT function, which includes infrastructure, IT architecture, data administration, project office, staffing, training, quality assurance, e-business support, business intelligence, IT planning/budget, corporate financial and corporate administrative systems," McCaig explains. Additionally, he notes, "I have functional, 'dotted-line' responsibilities for IT areas that now report directly into the business units. These typically are areas that are doing application development for a given business unit." The structure is similar for operations outside the US.
The decentralized approach has been "enormously successful," according to McCaig. "It has done more for addressing IT and business alignment than anything in the past. What it has really done from the IT side is made it clear who their client or customer is. That has given them a lot of focus. Also, the business people have taken a real sense of ownership of the IT function that they never had before. They have become very meaningfully engaged in setting strategy and priorities and working side by side with their IT folks in developing systems."
With the benefits have come some new challenges, McCaig concedes. "It was never easy, but it is more difficult now to address common standards and common initiatives across the enterprise," he says. In fact, much of McCaig's job has evolved into being the point person on resolving these kinds of issues, he acknowledges: "I am the person who needs to bring the enterprise focus.
"The people in each of the IT areas are very capable people and can do a fine job," he continues. "The value-add I bring is keeping an eye out for where one area is doing something that can impact, positively or negatively, other areas, so we have the opportunity to leverage and do things that are beneficial to the enterprise. That's a real requirement of this position, trying to do those things that collectively we all can benefit from, and watching out for those things that could hurt someone else."
Big Projects Underway
McCaig's "enterprise oversight" perspective has been essential to Chubb's successful involvement in a number of major IT initiatives in the past year. The key projectswhich McCaig and his team refer to as "The Big Five"include a new claims system (co-developed with Chicago-based Accenture); a new "soup-to-nuts" system for Chubb Specialty Insurance; a new commercial auto system; a global financial system, incorporating the implementation of PeopleSoft (Pleasanton, CA) Financials; and an e-business Customer Service Portal for personal lines customers, agents and brokers. These initiatives are being rolled out in phases that started over the summer and are expected to be completed early in 2002.
"These are all fairly major systems," notes McCaig with typical understatement. "They interact with one anotherthey're integrated, and they share things like infrastructure and common resources. So, part of the challenge is managing what we call convergence, making sure all these systems can come together smoothly. These are very intense efforts, but when the systems are in place, they'll pay some real dividends."
The emphasis on integration will be the norm for IT going forward, McCaig suggests. "The hallmark of the Information Age is integration of information, pulling things together, so you have holistic views of customers, costs and workflow across the organization." He uses the term "ecosystems," adapted from biology, to describe this approachwhich has been accelerated by the Internet's ability to link internal and external information, users, customers and partners. "Everything has to fit together, so it adds value, and all the other systems gain value," he explains.
This task is what McCaig thinks really defines the CIO's job today. "The level of complexity in terms of IT today, combined with the number of things you can do with it, gives you so many choices of what you can do," he says. "There aren't too many small projects anymore because you've got to integrate each one with everything else. One nice thing about a silo"referring to the industry's history of building numerous non-integrated applications"is that you did not care about the other silos! Life was easier then," he says with a chuckle.
"Now, there are so many choices, and they're more complex," McCaig continues. "We're spending more time trying to focus on the few critical things we must doand do wellto advance our business strategy. Behind that, we have to tie together many systems capabilities. We're trying to take an enterprise look and understand the full implications of the level of integration needed to compete globally and collaboratively."
Successfully navigating these challenges requires a different kind of managerial thought process, rather than strictly technical expertise, McCaig suggests. "There's a lot more gray than there is 'yes' or 'no'," he says. "And in thinking through the gray, you have to understand the possibilities of different scenarios. If you commit to one, what are the implications behind that? It's more asking the right questions in the first place than coming up with the answers."
Another ongoing challenge, McCaig acknowledges, is time management. "It's hard to fit everything in," he reflects.
Charles G. McCaig
Managing Director, Senior VP, Information Technology Chubb & Son
Size Of IT Staff: 1,500, including non-US based IT staff.
Interests/Hobbies: McCaig enjoys travel, especially to the American West, and reading about technology, history (recently read In the Heart of the Sea, by Nathaniel Philbrick, the true story on which Moby Dick was based), and language.
Key Quote: "Decentralization has done more for addressing IT and business alignment than anything in the past."
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio