The Real Tech Boom Is Just Around the Corner

Nothing symbolizes 1999s idea of IT innovation more than the foosball table. Mix in an old pair of shorts, a 10 a.m. to 10 p.m. work schedule, and $2 stock options, and youve pretty much summed up the work style we once thought would help us create the next leading-edge innovations.

Fast forward to 2003. Tech budgets are tight. Profitability pressures are bearing down on every business. What is ITs big new idea? Governance.

Its an initiative a lot of people equate with bureaucracy and busy work. Some would say the term itself practically wears a tie, double-knots its shoelaces, and doesnt make a move without first consulting a corporate handbook.

Im going to argue just the opposite.

Governance is hot.

Governance is moving IT departments into a position of corporate leadership thats better and more powerful than anything we envisioned in the dot-com years. In insurance, technology is emerging as a prime driver to reduce expense and improve customer service. But IT will only get a starring role if it can demonstrate how its solutions directly impact the bottom line.

How does IT do that? Governance.

The key to success is implementing a governance process that accelerates great projects and elevates talented people, instead of dragging them down into a quagmire of bureaucracy. Its easier said than done, especially in the insurance realm, where detail work is an obsession. My overriding piece of advice to anyone whos struggling with governance is this: Move fast. Dont strive for that perfect, omnibus solution. Rather, develop your framework, launch it, interact with it, and roll out version 2.0 as soon as you see what works and what doesnt.

Safeco, a company raised on precise underwriting, has traditionally tweaked and analyzed initiatives for months or even years until presumed perfection was achievedonly to find the tech landscape too different to implement the original solution. Today, we focus on tech professionals forte: Build quickly, look for quality, and commit to going back and altering programs based on successes and failures.

Our IT governance effort at Safeco is just over a year old, so were nowhere near done and even further away from completing the perfect case study. But by living this process day by day, weve identified some simple truths that make a big difference. Some of them are so uncomplicated that big-name consulting groups would be embarrassed to share them. But you know what? They work, and they dont cost $1 million.

Let technology have a seat at the senior level. IT needs a deep knowledge of the companys top business challengesboth currently and into the future. Business leaders need to have an equal understanding of how technology shapes so many business solutions. For instance, when senior leaders at Safeco talk about the need for quick, reliable service for agents and policyholders, they know the primary solution will likely be technology based. This is because CIO Yom Senegor is a peer and leader of Safecos corporate strategic planning.

With a top-down focus on corporate strategy, our IT group has kept its hands in technology but its mind on the insurance business, and this has led to some powerful quick hits. Safeco NOW, a Web-based new-business-entry model, turned the multiday life insurance application process into a 15-minute bindable experience. Data cubes designed for our personal lines operation allow product managers to monitor real-time, state-by-state sales activity and alter their pricing accordingly.

Tackle the governance challenge one piece at a time. The other day I heard my governance guru, program manager for IT governance Mike Schaefer, say to a co-worker: Believe me, I want to solve the worlds problems, but right now Im only focusing on this years initiatives. Governance is about prioritizing all the companys technology programs, but if you begin with too broad a view, you will generate only more confusion among co-workers and clients.

Your first move should be to align IT governance with the appropriate business units. Then prioritize the work within those units.

Have senior business leaders identify key tech projects and what type of results they expect to see. IT business analysts should generate creative ideas at the same time, largely based on what technology is available. Governance forums then bring the two groups together and sort out which initiatives will deliver the most significant, or fastest, returns. With a small change like this occurring throughout IT, your co-workers will quickly understand their personal roles in the governance process.

The alternative approachlong-term planning and strategizing by small leadership teamsoften leads to analysis paralysis. Play to your groups confidences and the companys strengthsand move quickly.

Turn IT leaders into business leaders. For a project to get off the ground, Safeco IT business analysts now must deliver a business case on why this technology initiative will help the company make more money. Innovators developing the next SQL or .Net solution must be proficient in topics such as net earned premium or return on equity. Governance screams for professional development.

Todays IT environment requires good communicators. In our recruitment of new employees and professional development of current colleagues, we push for technology generalists who can bridge the gap between IT and business efforts.

Our world has been turned upside down. In the old daysand maybe it still happens in some placesour agenda was driven by executive order. Our e-commerce tool for selling auto and life insurance in 2000 was mandated by marketing and never really took off. Now we are more grounded, chasing solutions that are no less inventive but aligned with corporate goals and strategies.

For instance, in 2002, we creatively reworked our existing legacy systems to support Safecos new auto product, which increased the lines new business by 71 percent over 2001. Sure, it wasnt an ideal technology build, but the resourceful approach was a primary driver in our companys financial turnaround.

Implement Look Back models. Dont enter into the governance process without the commitment from key participants to look back regularly. And look back from several different levels. Consider big measurement efforts like annual surveys of business leaders as well as small efforts like project closure forms that ask participants how they would make the process run smoother.

Continually collect recommendations, but dont continually share them with your IT teams. Youll drive people nuts with all the changes. We try to maintain order with quarterly releases of process improvement lists.
All of this leads to the holy grail of governance: benefit realizationthat fancy term for what your IT investment actually delivered to the company. By communicating the benefits in clear business terms, we help our partners re-envision IT as a consistent way to deliver valuenot a cost center.

Governance has been called a lot of things. After a year of hard work, heres how I look at it: Were promoting the experimentation and excitement that was at the heart of the dot-com revolution. Were simultaneously securing a safety net that allows IT dreams to come alive and deliver long-term results and profits. Now thats what I call IT innovation at its best.

Tammy Bare is director of Safecos Enterprise Program Office, the companys IT governance group.

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Defining Governance

Governance is about explicitly assigning the decision-making over all major technology projects to a committee of senior business executives. True governance also includes examination of cost-benefit analysis during project initiation, regular status checks, and a final benefits realization study that determines if the IT investment actually achieved its intended results.

With a strong governance operation in place, tech teams can make sure theyre putting their energies and their allotted tech dollars against projects that deliver the most value to key business units.

Is governance about stopping bad IT projects and accelerating the good? Its more complex than that. Most companies have a surplus of good ideas and need help prioritizing the truly greatthe projects that can help generate millions of dollars in new premium or reduce the expense ratio by a point or two.

Safeco began its governance process about one year ago. Today, the Enterprise Program Office (EPO) facilitates the process. During monthly forums, IT and business teams seek project approval from senior executives who evaluate business cases, cost-benefit analyses, and other selection criteria.

The EPO also sets and monitors checkpoints within existing projects, reporting findings back to the business units. Such IT customer service allows business units to alter or even end projects before they unnecessarily expend resources.

IT portfolio reports are shared with business-unit leaders monthly. The reports currently track project progress against two key criteriatime and budget. Very soon, though, those reports also will match up projects with strategic alignment and risk-scoring reports.

Governance, at Safeco, is a balance of three elements: IT project management, client counseling, and increased client service through timely updates. The result is an IT department that delivers measurable bottom-line value for every technology dollar spent.