"Doing projects differently, with short-term deliverables" and more iterative processes, is one of the biggest changesand challengesthat Mutual of Omaha's IT organization is experiencing in today's more pressured business environment, reports Holly Richmond, the insurer's vice president of IFS marketing. Richmond offered this insight as part of an opening day panel, "Business and IT Response to Strategic Issues," at this week's ACORD Conference 2002 in Orlando.
Many of the challenges GeneralCologne Re is facing on the technology side have to do with industry convergence, specifically the merger in the late '90s between General Reinsurance and Cologne Re, reported panelist Peter M. Nance, senior vice president of General Reinsurance Corp., GeneralCologne Re. "The challenge of evolving from multiple systems is a long, tough process," he says. "We're working hard to bring commonality to all the platforms."
According to panelist Richmond Waller, executive vice president, e-business, Zurich North America, his company is tackling "process and standardization, an area where business and IT can make huge strides. Technology can drive innovation, but you can't do that without standard deliverables and methods." Waller also wants to make sure Zurich is able to build on its accomplishments in this regard. "How much can you leverage from one project to the next because you have standard processes?" he asked. "We want to prevent duplication of efforts."
In terms of business/IT collaboration, Waller stressed that IT management has to "go beyond the standard, 'This is an efficiency,' play" when proposing technology investments, "and emphasize value. Make sure there's enough leverage across the organization," he advised the ACORD audience.
Addressing the hot topic of technology payback, none of the three panelists was willing to flat out declare their organizations were consistently reaping the ROI and business benefits from recent technology initiatives, especially in e-business (an admission that provoked laughter from the general session audience). However, Mutual of Omaha's Richmond pointed out that this reality was part of the business plan. "We said at the start" of the firm's efforts to start rolling out more Web-based applications "we wouldn't get ROI for two years. That's partly because a lot of the work has been building the infrastructure, and that takes time and money."
One way that Mutual of Omaha is trying to gain measurable benefits from its investment in areas such as the call center is to "negotiate in setting their budgets a commitment that they will get savings and efficiencies," Richmond reports.
When GeneralCologne Re developed its FacWorld facultative e-business application, reported Nance, "we measured ROI in a number of ways," including premium growth and hits volume.
At Zurich North America, "we're a few steps down the road from where we want to be" in terms of achieving ROI, Waller noted. "We have to build into the process the concept of measurement and metrics, and specifically quantify things like unit costs. We haven't been very disciplined about doing that and injecting it into the model from the beginning."
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