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Employee-funded programs have altered the way specialty benefits carriers are doing business today. As the market has shifted the financial burden of paying for products to individual employees, the platform used by insurance carriers has needed to be shifted, too, according to Doug Fick, second vice president and CIO of the specialty benefits division of The Principal Financial Group. "The introduction of the voluntary market to the work space certainly has been a business driver for us to go to a new technology," he says.

The market space is becoming consumer driven–whether that's healthcare or, in The Principal's case, specialty benefits, with products including The Principal's life, disability, dental, and vision offerings, explains Fick. "On the 401k side, it used to be [employees] had a pension, but now they have decisions to make. It's not only how much do they want to divert out of their paycheck into their 401k, but how do they want to invest [funds], and what's their asset allocation going to be? As providers of those services, we have to be willing to deliver ease of use for [participants] to interact with us."

Along with determining platform changes were needed, The Principal also looked at ways to improve speed to market by using the adaptive capabilities of packaged applications as opposed to home-grown, continues Fick.

In tackling its projects, The Principal typically likes to tap industry work groups the company participates in as well as consultant and research groups, Fick comments. "We will start with an RFI that goes on a fishing expedition to see who is in the market space," he says. "From there, we'll go with a formal RFP process that is much more requirements driven with a shorter list of eligible candidates. From there, we try to get down to a short list we can look at from a due-diligence aspect."

The Principal turned to SunGard because the vendor offered a proven platform that has been in existence for a while, notes Fick, adding the carrier liked SunGard because the platform was in The Principal's competitive space. "Admin systems with insurance companies traditionally are home-grown," he says. "One of the things we looked at in the marketplace is whether we have competitors using third-party admin systems. We found we had a few of our competitors using [SunGard], as well. It was stable technology."

Fick believes there always will be hiccups when a new vendor system is introduced to the company. The difficulty lies in how the carrier integrates the system with the environment, such as the carrier's proposal system, claims system, and general ledger.

Business users quickly accepted the new system, reports Fick. "The recognition the new system could do things our old system wouldn't be able to do was readily apparent," he says. What he found interesting on the technical side was with a legacy-type shop, IT had to transition its skill sets from straight application development to system integration. "I've been extremely pleased with how well my team has been able to rise to the challenge and adapt its skill sets into that mode," he says.

The key to integration is moving the data around, Fick asserts, and making sure there is more of a loosely coupled environment with existing systems as opposed to a tight coupling that would cause speed-to-market issues down the line. "The design of the integration points has worked exactly as we expected it to," he says. "It was complicated because we have so many integration points."

The carrier believes the features now available with the SunGard system will provide long-term value on the business side. "An interesting question to ask is, Will the end business user actually recognize something different?" says Fick. "We hope to keep that transparent, but we know from our administrative staff, it sees capabilities to do things automatically that previously would have had to be done manually."

Fick points out this implementation is special for several reasons–first, because IT and business clearly align. "We had a very clear and articulated business strategy, and this application lined up correctly with that," he says. "Second, I think our due-diligence process showed we picked the right vendor. SunGard has been an extremely competent vendor to work with and has been able to deliver on the requirements we set forth. Third would be the collaborative nature of putting together the right project team to execute this and drive the project to be a success."