State Farm’s Oakley Tackles Legacy

Mark Oakley's technology roots could scarcely be deeper, having joined State Farm (total revenues of about $61 billion) over two decades ago as programmer analyst straight out of college. He learned a great deal about the business side as he took on greater IT responsibilities over the years, but he cites his last three years as vice president of operations for State Farm's Great Lakes Zone as indispensable preparation for taking on the carrier's top technology job. Oakley replaces former systems vice president Dick Shellito, who has moved on to lead senior level strategic initiatives at the Bloomington, Ill.-based carrier.

"Being out there in the front lines on a day-to-day basis, seeing the challenge of growing the organization in today's competitive marketplace was invaluable in understanding the value IT brings in delivering solutions," Oakley comments.

In the broadest terms, Oakley sees his challenge as one of maximizing the value of IT investment in the support of State Farm's success. "We need to shift more of our investment toward strategic initiatives that differentiate ourselves in the marketplace," he says. "We have a lot of legacy applications that we maintain, and it is difficult to sunset services and free up investments dollars to go to the strategic initiatives."

However, Oakley says his IT department is finding ways of doing that, such as by leveraging technology advancements such as virtualization; by finding better ways to work, through agile development and collaborative work environments, and by enabling a mobile and remote workforce. "These kinds of things enable us to be more productive and ultimately deliver better solutions," he remarks.

Among the most vital solutions delivery on the horizon for Oakley's organization is the replacement of State Farm's core legacy systems. The carrier is in the throes of exchanging an aging claims system built on COBOL with a more flexible platform. Oakley declined to name the vendors State Farm is working with but says the carrier is in the midst of installing a system to fit within a new architectural framework of J2EE, WebSphere, DB2 and Unix. "It's a huge challenge, given the number of claims we process per day," Oakley acknowledges.

Oakley's organization is currently focusing a great deal of attention on a potentially even more challenging undertaking - that of replacing State Farm's legacy policy administration system, and doing so on a "build" rather than a "buy" basis. "It's very difficult to find a product that can scale to our organization," Oakley says. "So we're probably looking at a rewrite, but following the same architecture that we have for claims - Java/WebSphere/J2EE."

Commenting on investment priorities over the longer term, Oakley says one focus will be providing a consistent customer experience. "That's a constant objective of ours," he says. "We do it very well today, but it's also an area we can improve on."

To support those efforts and all others, Oakley believes he must focus on building a creative and skilled IT team. Toward that objective he plans to build on State Farm's existing capabilities for idea generation and incubation. "I want to grow that discipline," he says. "I think we can do a great deal through some of the Web 2.0 tools and collaborative environments to continue to mature our capabilities.

More fundamentally, Oakley sees the need to continue focusing on the attraction and retention of IT talent. "That is a focus of mine, both in terms of getting the right level of technical capabilities into the organization and also developing future leaders," he says. "That's becoming even more important to do."

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