Gimme a T!

1. Teamwork

Team is a nicer word than committee in the corporate world. But whatever the group may be called, companies usually dont thrive too long without their fair share of them. For Republic Insurance, located in Dallas, teams are what keep the company going. Field Marketing Operational Teams were established for each segment of the company, and almost all initiatives are born with those teams, according to Glenn Headley, Republic CIO.

Every project we have will be endorsed by the team, supported by the team, and managed by the team, he says. Teams arent made up strictly from one segment of the company because projects cross over to other segments.

The companys Internet initiative is one that started outside the team, but was quickly brought in. We formed a sub-team composed of IT and marketing people to put the plan together, he says. A lot was driven by IT, but because of our culture, we had heavy participation from the marketing and underwriting departments.

Projects are assigned a technical project manager and a user project manager. Even if the project is a quick one, there are always two people assigned co-responsibility, says Headley. The business unit person is responsible to assure [IT] knows what they want and they get what they want. The technology guy is responsible to deliver what [business] wants.

Jamie Bisker, director of research for insurance practices at the consultancy TowerGroup, says keeping people involved in what is happening with the company avoids disconnections.

You dont want IT coming to a meeting and saying, Weve got this great technology here, what do you think? And then let business try to figure out how to use it, he says.

One problem with teams is initiatives can get bogged down. Ellwood says to avoid this a company needs teams with people who have the right skills and competencies to meet the goals of the projects. Starting out, you need people who can evaluate an idea from its conception to the implementation phase, she says. Otherwise its virtually impossible to accurately pro-ject the costs or benefits. If you overestimate the costs, the next phase of the project may not be funded. Without the right people in place, a project can end up competing with other initiatives for resources, and that leads to delays and missed opportunities, she asserts.

Despite this potential hurdle, for Republic, teams are what push projects through. The team process gets us away from the haggling over resources within the IT department, says Headley. It takes me off the hook because the decision as to what we do and when we do it is driven by the teams.

2. Communication

Headley believes one of the keys to success for any CIO is the culture he or she operates in. Success with a specific installation and the longevity of the CIO are directly related to the company culture, he says. You can have great CIOs who find themselves in bad company cultures, and they fail. You can have mediocre CIOs in a great company culture, and theyll succeed and become great CIOs because of the culture of the company.

Headley credits his CEO, Bruce Milligan, for improving communication within the company when Milligan took charge in 1995. Up to that point, Republic was not performing well and changes were needed. We felt communication was very poor in the company, and for any business initiative to be successful, you need to have good communication across departments and across disciplines, says Headley.

Since IT touches virtually every part of an organization, communication among departments is vital. If we begin making decisions on our own, they will have an adverse effect on those other departments, he adds. One of the key ingredients to the success of any IT initiative is the appropriate culture within a companya culture that fosters good, solid communication.

Howard Stevens, CEO of Penn Mutual Insurance, believes small carriers like Penn originate most initiatives on the business side, but the fact that everyone works so closely together means everyone is aware of everyone elses problems. The IT people might hear something and say, We can fix that kind of thing. We only have 65 people in our office, so when someone has a problem its pretty well known, he says.

Still, there are formal communication channels at Penn. We try to have open communications, he says. We get status reports at our weekly meetings. We dont like surprises.

3. Business Understanding IT

The business staff has to understand what the IT department is doing, Bisker says. You have to let the [business side] know that if there are problems, there is a reason behind it, he asserts. The IT department isnt there to prevent you from getting your e-mail. If something happens, users should know the system went down for a reason. Its important that you understand before you seek to be understood.

Ellwood believes business people are learning more about IT than the IT people are learning about insurance. It used to be the business side didnt want to know much about technology, she says. Technology has become so pervasive in peoples personal lives, she continues, that todays business people are increasingly reliant upon it to effectively perform their jobs.

Try taking it away and see what happens to results, Ellwood maintains. Todays business professionals understand the intricacies of software more than some technologists, she suggests. Maybe the business people dont understand the complexity of technology infrastructure design and development, or network administration and security, but they do see that technology is paramount and is a key enabler to their results.

4. IT Understanding Business

Top IT people have an obligation to understand the business side of the insurance industry, but is it important that such knowledge work its way down the ladder? Bisker says, Its certainly not critical to involve programmers in strategic decisions, but its important the programmers appreciate the business they are in.

He is aware of companies using the university concept to teach tech employees about the insurance business. For example, a company can offer classes in variable life or producer channels, he says. As a programmer, its important to know the business so you can make intelligent decisions as you code.

Stevens believes such cross-culture training has been helpful for his company, where the head of information services got a start in the companys underwriting department. He has a pretty good flavor for how things work here, he says. A lot of people from IT have underwriting or claims experience, but the people from underwriting and claims dont have IT experience.

5. Strategic Planning

The stature of the CIO has grown over the years. This loftier level allows for more strategic thinking about where a companys technology is and where it should be heading. The days when IT was viewed as overhead are over, says Ellwood. The IT organization needs to keep abreast of changes in technology to determine how to best leverage it to meet the needs of the business.

This is a key step in turning conceptual ideas for technology into reality. The thing Im excited about is we are recognizing technology is a key enabler of the business. But it isnt the business, she says. Sometimes technology people think their technology is the business. Its not.

Carriers need to share business plans with the IT department, Bisker believes, so the two sides can eventually meet at some point in the future. Its important IT knows where business is heading so they can get together on each others needs, he says. You dont want to architecture yourself away from something the business area needs to have.

A part of IT strategy means having good equipment. With a small IT staff, Stevens says having a reliable mainframe system allows the staff to work on projects rather than maintenance.

Ellwood doesnt believe maintenance is touched upon enough. She draws a comparison to car maintenance. Most people change the oil in their car every 3,000 miles, but what is being done to maintain systems? Technology, for the most part, is invisible, she says. Unless a CIO is really committed to a technology obsolescence plan and willing to keep the technologies current and ahead of the business needs, IT can become a roadblock and a hindrance to the business. But the CIO cant do this alone. He or she must have the support of the business to ensure adequate resources are set aside.

6. Watch the Exuberance

IT lives to do IT, says Bisker succinctly. That certainly falls under the job description, but he adds, sometimes it is necessary for the IT department to relax. When they are given an opportunity, sometimes they get over-exuberant.

The business side sees that exuberance and shakes its collective head. Some business leaders dont want to get IT involved in the early conception stage, because of that exuberance, says Ellwood. Sometimes systems people need to have answers to all the questions. What they sometimes try to do is build the requirements and the system before the idea has been conceptually thought out.

IT doesnt deserve all the blame, though. Many projects get flattened when a seemingly simple business solution becomes more and more complex. Things that kill CIOs are projects that get out of control due to scope creep, and there is no recognition the project date needs to slip with it, says Headley. The next thing you know is its the IT departments fault because the project is over budget and over time.

Headley believes the team approach allows Republic to recognize delays and know that adjustments have to be made to deadlines and budgets.

7. Establish a Liaison

The business side should rotate a staff member into the IT department on a regular basis, advises Bisker. Companies have established positions such as business systems analyst. These people typically operate as a liaison, but they often get bogged down in the day-to-day work, he says, adding the position should be less tactical and more strategic.

They become aware of the limitations of the infrastructure and can communicate those needs, he says. As an example, he points to a company that wanted to expand its operations but never communicated those plans to IT. Instead of putting up restrictions, excuses, or reasons things wont work, if IT knows about it in advance, they can come into meetings prepared instead of getting information theyve never heard before.

Insurance is such an information-intense business, you have to have information technology or you cant compete, Bisker says. The IT department needs to understand the competing realities that pressure business areasbeing profitable, maintaining regulatory compliance, and servicing the customer all at the same time while worrying about convergence and competition in the market.

Ellwood believes a liaison can improve performance of the company, if done correctly. You can take a really great idea and make it even better if you have someone who can conceptualize technology solutions to customers needs before anyone else, she says. Its important to understand this is a balancing act and timing is everything. On the one hand, IT wants to and should be involved in early discussions around conceptual ideas, but on the other hand, IT resources are often in great demand, and there may not be enough resources to assign to evaluate ideas that might not materialize into real projects.

8. Stay Hungry

Ellwood suggests that some IT departments would benefit from looking at outsource providers and consulting firms. These types of firms can provide excellent examples for internal IT organizations because they are out to win business, build relationships, and participate in successful projects, she says. They know their success is based on keeping their customers satisfied while continuing to increase the customers perception of value for the services provided. Perhaps most important is these firms understand that if you dont deliver, there are plenty of competitors who are standing in line to have the chance.

9. Whats the Score?

Scorecarding a project, getting feedback, and going over what worked and what didnt work are the first steps for the next project. Its easy to talk about the good news, but more can be learned from failure than success. Companies dont like to discuss those failures, but Headley acknowledges they happen.

Republic has had two failures in the last five years, he says, and both could be traced back to a breakdown of the team system between business and IT.

What is important is the company didnt chalk each failure up as a fluke but investigated the problem. We regrouped the teams to find out why it happened and what were the failures of the team, he says. We try to learn from our mistakes.

10. ROI (and ROV)

Nothing says success like turning a profit. ROI isnt the only measure, Ellwood says, but I cant think of a better one. Did it help you or did it hurt you? The key is to have discipline to realize the benefits and to force and monitor that things happen. Finding such discipline on the project management side is easy, but it is not always seen after the fact, she says. Having technology available isnt worthwhile unless the user side is thoroughly familiar with its capabilities.

Still, ROI is not the only measure of successso is showing value for a project. Sometimes the two work hand in hand, other times they dont. For example, Headley says, it is impossible to show an ROI on a disaster recovery plan, but obviously there is value in having one in place. Republic calls it Return on Value. In many cases, there are a lot of intangibles when you talk about automation initiatives, he says. We try to use both measurements.

Republics Internet project was able to show a positive ROI, but the company also was pleased its ROV was positive because it created good feelings within all departments of the company and with its customer base.

Game Plan for Successful IT/Business Team Collaboration

Project Initiation:

Be sure the idea is fully thought out and approved by senior management.

Beware of IT projects created for the sake of IT rather than business.

Create a dedicated team including representatives from all affected parties.

Execute funding requests and cost benefit analyses within a short period.

Set up timetable for project.

Project Execution:

Involve business in the projects developmental stages.

Establish a liaison for the project.

Communicate progress and problems to all members of the team.

Make sure the technology is reliable, or else time will be wasted on maintenance.

Create measurable IT goals or metrics and make IT responsible for meeting them.

Project Rollout:

Ensure users are trained and understand what the technology can do for their jobs.

Measure what works and what doesnt.

Assess the goals set earlier to see if they will be met or exceeded.

Project Completion:

Commit to technology obsolescence plan.

Establish ROI and ROV.

Perform a post-mortem on projects that failed.

Look for aspects of successful projects that can be duplicated for future projects.