When Physicians Mutual Insurance Company decided to begin acustomer-focused business transformation program and implement aservice-oriented architecture (SOA) in 2004, Dan Simpson, seniorvice president and CIO, knew such a major transformation requiredmore than just implementing new systems. It required changing howpeople work together to develop innovative solutions.

To that end, the health insurance company opened an off-siteoffice for the more than 40 business and IT employees selected towork on what is known internally as the Greenfield program–areference by the carrier to an old industrial term meaning to gooutside and start from scratch.

(For a look back at a Business Solutions article featuring Physicians Mutual and DanSimpson, click here.)

“It was hard for team members to do their day jobs and be ableto think creatively,” Simpson explains. “Getting them away from theoperational, day-to-day demands and allowing them to work togetherin a more focused environment was a critical success factor.”

Based in Omaha, Neb., Physicians Mutual provides a range ofindividual health and life insurance products as well as retirementproducts. The company employs about 1,000 people, including 185 inIT.

When Simpson joined Physicians Mutual in 2001, the company knewit needed to revise its business model to respond to changesoccurring in the marketplace and in the regulatory environment.Simpson helped the carrier launch the Greenfield program, amulti-year strategic business transformation initiative that callsfor re-engineering core business processes and replacing40-year-old legacy systems with an SOA-based platform that enablesflexibility.

“We came up with an approach to redefine our core businessprocesses around the customer and establish a new technologyinfrastructure,” Simpson says. “Our approach integrates fourthreads–people, process, technology, and data–into a cost-effectiveand flexible new framework.”

To date, Physicians Mutual's agency management and billing andcollection applications have been rewritten using J2EE and SOA. TheWeb-based billing system has helped the company dramaticallyincrease its electronic payments and lower operational costs.Customer service also has seen significant improvements in qualityand timeliness. All this helped the carrier win the CIO 100 Awardin 2007 from CIO magazine for “operational and strategic excellencein information technology.”

According to Simpson, the company is seeing numerous benefitsfrom work completed on the Greenfield program so far.

“Through reusable software services design, we've been able tocut our time to market by half in some cases from what it would'vebeen,” he says. “We've also had dramatic improvements in providingbetter information to the business. Our customer service reps nowcan easily view billing images and a single source of customerinformation. In some cases, it used to take two to three days torespond to a customer's request, whereas today we can respond in 20seconds or less.”

For the next 12 to 18 months, Simpson and his team plan toconvert legacy data and processes over to the newly installedGreenfield environment as well as implement the Greenfieldprogram's last major phase–a new policy administration system.

“The end result, when you look at the road map, is a cohesiveset of software services and applications and the retirement oflegacy processes and the mainframe,” says Simpson.

The Greenfield way of working has become so ingrained in thebusiness, according to Simpson, that he can see the Greenfield teammoving back into the company's Omaha headquarters without missing abeat.

“We're at the point now where 'the Greenfield way' has made itsway back into the home office,” he contends. “I don't mean just thetechnology; I also mean the methods, practices, and ways ofthinking. There's a point at which what we've done on Greenfieldbecomes the way Physicians Mutual does business. I think we'renearing that point.”

Simpson believes the Greenfield program's success is due tostrong senior management support, a well-established strategictransformation plan, and the highly collaborative manner in whichthe integrated business and IT teams work.

“We have a great team of hard-working business experts andtalented IT professionals,” he concludes. “Their synergy is verypowerful and great fun to watch.”

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