Systems Overhaul

Extensive understanding of users' needs helps this CIO steer hiscompany through a systems replacement project.

Sharon Baker

As a former director of operations at CSE Insurance Group, LeeBaumgartner is well aware of the needs of the carrier's users. Thatknowledge has come in handy as the industry veteran coordinates hiscompany's overhaul of its internal systems.

“The user community has been involved in our systems replacementproject at every level from the start, including defining businessrequirements, participating in vendor interviews, viewingdemonstrations, and selecting a product,” Baumgartner says. “We'vemade it a point of making this a company project rather than an ITproject.”

Based in San Francisco, CSE is a regional personal lines carrierserving Western states–primarily California, Arizona, Nevada, andUtah. The company was formed in 1949 to provide insurance forfirefighters, law enforcement personnel, and other government andcivil service employees. In the 1980s, it extended its products tothe general public. Baumgartner joined the company during thistransition to set up an operations department and provide back-endsupport. A graduate of Stanford University with a bachelor's degreein political science and psychology, Baumgartner had extensiveinsurance experience in operations and administration from previouspositions.

In nearly 20 years at CSE, Baumgartner's responsibilities haveexpanded beyond operations. In the late 1990s, he temporarilyheaded up the IT department during an executive transition.Baumgartner added IT to his vice president of administrationresponsibilities in 2003.

“I've had a lot of interaction on the user side with ITthroughout my career, and that's served both CSE and myself well,”Baumgartner contends. “You can't be in the insurance industry verylong without being significantly impacted by or involved intechnology.”

CSE currently employs 170 people, about 30 of whom work in IT.Net written premium was $110 million in 2008. One of the company'skey 2009 initiatives is to develop new markets/distribution andexpand into other locations. To support strategic growth, thecompany is in the process of replacing its COBOL-based legacy AS400system with a Web-based Java J2EE platform.

“It's a quantum leap as opposed to just adapting our existinglegacy system with front-end, Web-based integration,” Baumgartnerexplains. “We're replacing everything.”

The replacement project began in 2007 with a definition andselection process. In early 2008, CSE chose ISCS Inc.'s SurePowerInnovation product. The new system for personal lines will beimplemented in four phases. Baumgartner expects all agents inCalifornia will be using the new system by the end of the summer;the conversion for the rest of the states should be complete byyear's end.

“SurePower will provide the platform we need to evolve andhandle growth as well as improve speed to market, operationalefficiency, product development, and data mastery and addressongoing statutory and regulatory pressures,” Baumgartnerindicates.

A systems replacement project of this scale has not been withoutits challenges, however.

“Every part of the project you would expect would be a challengeis exactly that, whether it's training or product development orthe infrastructure itself,” Baumgartner admits. “It's entirely new,not just in computer languages but in data structure, as well. Theconversion of data probably has been the most complex piece of thiswhole project.

“You have to have an appetite for change, for learning, and forthe stimulus that comes along with new procedures and newtechnology,” he adds. “It's fun and it's exciting, but it's verychallenging.”

Prior to the systems replacement project, the IT team spentseveral years building and rolling out applications to improveworkflow processes and modernize the quoting systems for itsagents. These included a document management solution from Oracleand a cost estimator platform from ISO HomeValue.

During his nearly two decades at CSE, Baumgartner has seentremendous changes not only in the technology but also in how usersand executives view the role of IT within the company.

“There's been an evolution that's allowed IT to come to thetable and participate within management groups,” he says. “Fifteenor 20 years ago, the IT function seemed to be more of anapplication provider; users didn't know how to propose what theywanted. Today, users are more computer literate, and they know whatto ask for and what to expect from IT.”

Sharon Baker is a freelance business writer based in Charlotte,N.C.