Under the Scope

Mike O'Connor, CIO for small commercial insurance with The Hartford, believes there has been an evolution in the insurance industry in terms of how the business operates. "We're moving from an information technology environment to a business technology environment," he says. "Our business leaders are more prepared to make decisions on technology than they ever had been before."

As a result, O'Connor maintains, there is a need to look at the internal staffing model within IT to be sure the carrier has the right resources in place. "What we are trying to do is emphasize the first word of 'business analyst.' It shifts our focus from being more about the elicitation of requirement to being about the system enabling [the requirements]," he says.

For many decades, O'Connor contends, IT has been about the systems, and that is where the evolution needs to take place. "What we're trying to do with our whole BA population is to get the business analysts to understand the business needs and requirements and help the business understand what it needs and not necessarily what it wants," he says. "If we can do this effectively, we'll prepare ourselves to move forward. In the short run, I think we'll also improve our outcomes in terms of project deliverables."

ZURICH PLAN

A major event occurred within Zurich North America when the carrier decided to outsource IT development. "People realized we better figure out how [the outsourcers] do business because [Zurich personnel] are going to have to create requirements," says Rick Harold, vice president and director of business technology integration. "We were used to working with our IT department, but we realized [communication] needed to be much more formal [with the outsourcers]."

With the growing amount of projects Zurich has undertaken and the improvements in technology such as BPM, business rules, and SOA, the carrier also realized it needed a special kind of business analyst to reflect these skills. "That's when [Joe Lunn, head of Zurich North America IT project management office] and I linked up to put together a comprehensive program to get our BAs up to speed on the new technologies," says Harold.

The two recruited employees with general skills and competencies around analysis to start them in a beginning stage as business analysts and lead them to more technical skills. "We had to come up with a comprehensive program of components and modules that cover a wide range of gaps–whether those involve business knowledge or technical knowledge–and put them together in a program," says Harold.

Lunn reports one of his earlier roles with Zurich involved managing the carrier's outsourcing relationship. "The impact of sourcing on the understanding of requirements cannot be underestimated," he says. "The difference in culture and language and even the time difference have a huge impact."

Zurich had experimented with simulation tools, points out Lunn, but the carrier hadn't found a clear path yet. "We can't just rely on ourselves being trained, we have to look at our long-term sourcing partners and make sure we learn to put this together in a sophisticated way so it can be understood in an equally sophisticated way," he says.

A second consideration, adds Lunn, is the training and certification of the analysts has to be layered. "We have people with many different levels of experience," he says. "We're structuring our program based on the level of the person today rather than one size fits all."

WHO THEY ARE

Business analysts have been around the insurance industry for a long time, notes Karen Pauli, research director in TowerGroup's insurance practice, and therein lies the problem. "Historically, business analysts have been the individuals who did testing on new systems or wrote use cases–push backs," she says. "They've always been individuals who kind of understood technology and kind of understood business and could bridge that gap."

Today's business analysts need a different skill set, though, asserts Pauli. "I almost think we need to create a new name for [the job] because business analysts need to have sophisticated skill sets in the area of predictive analytics and working with that output. The whole genre needs to be reinvigorated with a much higher grade of worker."

The old-time business analysts used to be heavily on the technology side, explains Pauli. "The new business analysts need to have strong business knowledge, be able to deal with statistical information and data, and be really sophisticated in the data analysis arena so they can come up with good business initiatives or directions," she says.

BA CONTINUUM

The Hartford started work on what has grown into the Business Analyst Continuum back in 2005. According to Kathy DeJean, director of work force analysis and planning for IT at The Hartford, at that time some issues arose in the work force analysis that indicated the carrier needed to pay more attention to this job position. "We were having a difficult time hiring business analysts," she says. "At the same time, we were facing an extreme retirement cliff in our BA population. That continues through today and well into the future based on recent projections." Of those who fall under the BA label at The Hartford, DeJean estimates 30 to 40 percent will be retirement eligible over the next three years.

The Hartford also recognized that because of the way the company was structured and processed work, the BAs had been functioning in a generalist capacity. "If there wasn't a project manager or a tester available to work on a project, we often threw a BA at it," she says. The Hartford BAs were spending up to 25 percent of their time doing the work of other jobs.

In 2004 to 2005, the carrier conducted a series of analyses to establish roles that involve only business analyst work, to retain current staff, to make sure the staff had the skills needed to do the proper documentation and management that was needed, and to be prepared to address the retirement issue.

"It all started around how we changed work processes," says DeJean. The Hartford redefined the work BAs would perform, developing new standards for the tools they needed to use for their work. "We had conversations about training, we have a new competency model, and we started to recognize there would be changes throughout the employment life cycle of our BAs–recruiting, training and development, who would be promoted, and how we would recognize and reward them," she says.

As The Hartford laid this out, it latched onto the name Continuum. "The Continuum became the framework that helped us prioritize what needed to be done and make sure we were putting adequate focus on specific pieces in order to achieve the goal of improving the overall capability and effectiveness of this job family," says DeJean.

Although The Hartford today has about the same number of business analysts that it had three years ago, DeJean points out that in the intervening years the carrier suffered with high turnover. "We were able to address the attrition rate of the BAs, and we had a phenomenal year working with our staffing organization," she says. "We feel we've seen the BA problem turn the corner."

WHERE THEY COME FROM

Business analysts traditionally sat in the IT unit, Pauli points out, but she observes carriers that understand the complexities of the job now are putting the BAs in the business unit. "I've seen that in several companies with their claims departments, where the business analysts understand they need to have a daily synergy with the individual claims unit," she says.

There are IT people who are very educated in the business side, continues Pauli. These people work for insurance carriers that aligned the business units and IT at an early level. "I could see those individuals moving over [as business analysts]," she says. "The tighter aligned business and IT are, the more you will find IT people moving into the business side of things."

The highest demand for business analysts is with carriers that have sophisticated predictive analytics and predictive models, according to Pauli. "When you start talking about doing market development and product development, the business analysts in those areas are people who are visionaries," she says. "They can take information and look at the markets and suggest business strategies that are innovative. That's a pretty odd combination to be able to deal with data, have a business background, and be innovative."

Fitzgerald believes business analysts drawn from the business side initially were involved in operations. "They are service folks who have a good analytical mind and who are drawn to technology and like to solve problems," he says. "They become an expert in a system or a workflow or a particular type of program."

On the IT side, business analyst candidates are "programmers with personality," explains Fitzgerald. "They get exposed to the business and understand it. Obviously, they understand the logic in systems. They usually go from programming [to business analyst] rather than from an architectural route."

The path to a business analyst program is varied among insurers, according to Fitzgerald. "It depends on what project you get to work on, whom you get to work with, what you get exposed to, and what your interests are," he says. Some businesses have put in a defined job development process, but Fitzgerald doesn't believe you can point to any one way and say this is the way to go. "A lot of times it is on-the-job training with projects, and you learn from others or learn from your own mistakes," he says.

TRAINING TABLE

Business analysts traditionally have been thought of as subject matter experts, contends Fitzgerald, but he asserts the industry needs to get beyond that. "You can teach people structured analysis. You can teach them process diagramming. You can teach them, to some level, object-oriented programming or analytics," he says.

There is a lot of insurance expertise available to willing students, explains Fitzgerald. "They don't lack for people who understand insurance," he says.

Zurich also had to deal with the varied workload in its departments. "Our project load tends to vary from year to year," says Lunn.

A year ago, the carrier was working on claims-intensive development, but that didn't stay that way this year. "Over time, business analysts have been attached to one business unit or another, but we have recognized we have to have flexibility," says Lunn. "Those people who contributed to the claims success last year have enough transferable skills to move over."

This year, Lunn expects more than 60 percent of Zurich's project work to be on the underwriting side. "We can't afford to bring in new people or not have people working there when we have skilled people on the claims side," he says. "We're trying to make a common set of certification rules that bring all of them to a level they can transfer."

Analysts who work in certain business areas for a long time become comfortable in their own ways and standards, Harold points out, so the goal is to break down the silos and get some of those resources helping in other subject areas. "The whole idea of this enterprise program brings about change management," he says.

Zurich's subject matter experts (SMEs) sometimes lack the time to bring their business expertise to the novice business analysts, Harold remarks. "When [SMEs] are doing [training], they are not doing their own jobs. Therefore, another challenge is to try to get these BAs enough subject expertise in the areas they are working so we can limit the amount of time and resources in the business areas and get much better at representing the business areas they are building the requirements for," he says.

Zurich can use some partnerships so the analyst shifting in from the claims area can work day to day with someone who has more prolonged underwriting experience, adds Lunn. "Kind of a mentoring program," he says. "It can't happen instantly, but we can do things to make it happen."

FORMAL TRAINING

Fitzgerald points out Capital Community College in Hartford, Conn., and Boston University have developed degree programs for business analysts. In addition, the International Institute of Business Analysts has taken on the task of certifying people as business analysts, though not in specific industries. "Think about where the Project Management Institute was 15 years ago," says Fitzgerald. "That's what these folks are attempting to do."

Capital Community College is located in Hartford and is designing and implementing training through a Department of Labor grant that was meant to build skills for jobs where there are shortages, such as business analysts, according to Peggy Schroeder, director of human capital development for IT at The Hartford. "The idea of the grant for the financial services sectors is to come up with common training programs to be a pipeline to some of the key roles identified, such as BAs," she says.

Current BAs at The Hartford and those the carrier is looking to move into BA positions are eligible for the program. "We participated in helping to design the program to show what our needs were," says Schroeder. "And now CCC is delivering the program."

SMALLER SOLUTIONS

Pauli has spoken with vendors on the need for business analysts and feels this is an area where insurance product vendors can step in and help. "The vendors that provide service to the small-to-midsize carriers have a real opportunity area to bring on board people who have deep business understanding, can be educated in the tool sets of the products the vendor offers, and then partner on the service level with the small-to-midsize carriers," she says. Smaller carriers won't be able to groom the sophisticated-level people who need to be in that slot and retain their services. "[Carriers] naturally partner with vendors to move ahead in the marketplace, so having those kinds of services are important," says Pauli. "It could be a real competitive edge for a vendor to bring business analysts to the party and help the small-to-midsize carriers."

For carriers, it's a matter of where do they use their assets, suggests Pauli. "Do you spend a lot of time trying to groom a BA if you are a small carrier, or do you partner with someone you already have a relationship with and treat that as a right-source type of service?" she asks. "I can clearly envision in the small commercial lines area where you have new entrants to policy administration for small commercial lines and have underwriting tool sets. I can see that being a great opportunity area for those vendors to offer the analyst types there."

Fitzgerald contends the next evolution of the business analyst will bring a well-defined business analyst community that understands how to do business analysis. "If you can do that, you can build that skill for insurance or anything," he says. "If you have that [business analysis] skill and work in a certain area for a length of time, you are going to be more effective. But we have to get away from the idea we have to grow [business analysts] ourselves or they can't do the job effectively if they don't understand our systems. I don't think that is the optimal model."

More work has to be done on the sharing of knowledge within the BA ranks, recommends O'Connor. "Our industry is evolving, our company has to evolve, and the role of the BA has to evolve," he says. "If you develop an expertise in one process, you tend to want to stay in that one process. That's not a sustainable model for us. We have to move people from system to system and application to application to drive the attributes we want–a flexible business analyst who understands the business drivers as opposed to just the IT implications." TD