Shift to Customer-Centricity

Since joining TIAA-CREF ($286.1 billion in combined assets) in 2003, CTO Sue Kozik has led the company's initiative to centralize its IT environment - an effort that has so far delivered $50 million in savings. Rather than running the IT organization as disjointed product-centric business units, Kozik is working to give TIAA-CREF a holistic approach to technology that will help the company serve the needs of its membership of education, research and healthcare professionals.

Sue Kozik, executive vice president and chief technology officer, TIAA-CREF

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I&T: The average life span of a TIAA-CREF customer is more than 20 years. What role has technology played in enabling such long-term customer relationships, and what technology initiatives are in the pipeline to further improve those relationships?

Kozik: An average customer life span of 20-plus years is a high-water mark, and I would love to say that technology was the reason, but it really wasn't. I attribute the longevity of our customer relationships to the design of our products - for example, we have the only portable pension product in the U.S. That being said, going forward there is a lot more discussion about technology initiatives that can enable long-term customer relationships by putting more tools in the hands of our customers. The business of insurance is very complicated, and while insurance companies don't try to make it complicated, we have well-intended help from Washington. Using Web-based tools, we try to take out some of the mystery and reduce the complexity for our customers. Our business is not 9-to-5. Customers may think about their insurance and retirement needs sitting around the kitchen table on a Saturday afternoon. Moving more of our tools to the Web gives our customers the anytime/anywhere access that they want.

I&T: TIAA-CREF is in the midst of a major restructuring of both its business environment and its technology infrastructure. How is that restructuring impacting IT efforts?

Kozik: TIAA-CREF as a company had been very product-centric. In IT, that manifested itself into separate applications, servers, firewalls, storage area networks, even call centers, for each product line. Our challenge is to dismantle that product-centric environment from an IT perspective. For example, since each product area had its own CRM [customer relationship management], we now have multiple sources of customer information. The good news is that we have customer information, but the bad news is that, from a technology perspective, that is inefficient. One of our major initiatives is to create a single customer database and an enterprise data warehouse. We've collapsed our call centers, and now our customers have a single point of contact, no matter what product - retirement, insurance, trust, savings plans - they are calling about. In the background, however, our call center reps are toggling between systems. That's what we are solving now - collapsing the tools in the background. It's heavy lifting behind the scenes to take the data we've stored and move it into a single customer relationship management environment.

I&T: Has centralizing IT resulted in any cost savings?

Kozik: Although we are doing this to create a better business model and not to save money, we are in fact saving a tremendous amount of money. The savings are really significant when you collapse like things, such as combining call centers. It's a good-news-all-around story.

I&T: Will legislative demands continue to impact your role?

Kozik: Yes, because I don't think the legislative demands will end. As CIO, I have to plan for and expect more legislation around improving corporate governance, and I need to anticipate the IT implications for that. I expect the pace to continue. I can't go and hide; I've got to be proactive.

I&T: How does TIAA-CREF ensure that security is not compromised while still meeting customers' needs for information?

Kozik: The quality, accuracy, reliability and availability of information really is our business, and while I think every company will tell you that security is a top priority, it really is a business imperative in financial services. We need to continually adapt to provide a non-intrusive, secure environment that doesn't get in our customers' way but at the same time makes them confident - and lets us sleep at night - knowing that we have secured their personal information. We regularly review, audit and test for security vulnerabilities using internal and external auditors as well as external consultants who come in and hack for us to make sure we haven't overlooked anything. We continue to look for new tools and techniques to ensure a secure environment. As we think about how to use technology to solve business problems, security is no longer an afterthought; it's really front-and-center in our decision-making process. If we make information available to our customers, how will we ensure it is secure?

I&T: How will wireless technologies impact your business?

Kozik: Wireless is a great emerging technology. From a personal perspective, I don't know where I would be without wireless devices. As an IT leader, I would like to push wireless laptops out to every one of our relationship managers and financial advisors. Although these folks are great at anticipating customer needs and downloading information before they meet with customers, I would like them to have a full suite of information available so they can perhaps teach customers to use our Web site or help customers explore new products as they meet with them. One of my challenges is making sure that our legacy systems are Web-enabled. Before implementing wireless, I need to make sure that security is in place, and that the wireless providers can provide full coverage. Once you decide to work wirelessly, you don't want to have to work both ways. It costs money and it's a lot of complexity for a field force.

I&T: How has the recent economic downturn impacted your business and the technology you deliver to your customers?

Kozik: The poor governance and negative ways that companies operate in a difficult economy and some of the games they play has raised the awareness of individuals of the responsibility they have in planning for their own retirement. Consumers' increased awareness of their own role in financial planning has facilitated our offering new tools on our Web site for our customers to do planning and modeling.

I&T: As TIAA-CREF's top technology officer, what's the most challenging aspect of your job?

Kozik: The most challenging aspect of my job is time, because the pace of the business and technology environment we work in has significantly increased during my 25-year career. In the early days of IT, we were worried that we weren't invited to the business table to make business decisions. The good news is that now we are at the table, but the responsibility to stay abreast of business and compliance issues is huge. It's a juggling act. How much time do I need to spend on emerging technologies and how much on staying abreast of new legislation? As CIOs, we should always be a little bit paranoid that we haven't done enough. If we're complacent, we're out of touch.