Over the past few years, many financial services providers have struggled to automate their operations across the enterprise. For most, the task of extracting data that resides in antiquated legacy systems and seamlessly linking these systems across various business units has proved to be nothing short of rocket science.
But don't broach this colloquial expression around Richmond Waller, the executive vice president of e-business for Schaumburg, Ill.-based Zurich North America. Trained as an aerospace engineer, Waller knows a thing or two about rocket science, and insists that insurance automation challenges don't hold a candle to some of the projects he's seen.
Years ago, Waller leveraged information technology to develop enterprise architecture standards for Falls Church, Va.-based General Dynamics Corp. One of Waller's more compelling assignments at General Dynamics, a supplier of sophisticated defense systems to the United States and its allies, was to develop enterprise standards within the company's new-aircraft R&D initiative.
To put matters in perspective, when you've been entrusted with a responsibility where a miscalculation could compromise your nation's security, dealing with enterprisewide data integration initiatives for insurance is far more simple.
Indeed, as Waller builds a foundation for his newly created position at Zurich-and with all due respect to the industry's struggles to automate operations-he approaches his assignment not with trepidation, but with excitement.
Fun and Opportunity
"When I was exploring accepting the e-business position at Zurich, I approached it as a fun opportunity," says Waller, who worked as an e-business consultant with Cap Gemini Ernst & Young prior to joining Zurich in November.
"I would not say the insurance industry is living in the dark ages, but there are a lot of (e-business) opportunities. It's uncharted territory. What my objective will be is to establish innovation building blocks at Zurich.
"One year from now, we'll have made some splashes in areas such as Web site evolution and enhancing our electronic transactional capabilities. In two years, I believe (Zurich's e-business capabilities) will be radically different."
Zurich Financial Services Group may not rival the U.S. government in terms of overall scope and scale, but as global financial services providers go, its size and structure is impressive. Zurich Financial does business in more than 60 countries, with annual net written premium totaling $56 billion in 2001.
The company is structured into five business divisions, four geographic business divisions and one global business division. Zurich North America Corporate, one of the four geographic divisions, accumulated more than $10 billion in premiums in 2001 and has 11,650 employees.
Zurich North America Corporate, whose focus is on the property/casualty segment of the business, is the division that Waller has been assigned to oversee.
Regarded as an e-business strategist, Waller's role at Zurich will be invaluable as the company continues to integrate the Internet and other emerging technologies into its operating platforms. At a large financial services provider such as Zurich, one mandate that's been established is to eliminate labor-intensive and costly paper processes.
Each of Zurich's 12 business units operates as a separate profit center, so the key is "to create a standard framework and implement it so that IT can function along with the business organization," says Waller. "Look at how business-to-business collaboration has become a noted standard in industries such as energy and high-tech. These industries established a standard to communicate. This standard is only now emerging in the insurance industry," he says.
With a diverse background that encompasses competencies in engineering, consulting, IT and e-business, Waller built his experience at General Dynamics and later at global management consulting and IT services firm Ernst & Young, which has since merged with Cap Gemini.
He departed General Dynamics for Ernst & Young because the defense industry was somewhat rigid in providing growth opportunities. "I worked with people who had been in the same job for 35 years," he says. "I remained in the defense industry doing consulting work, and then moved to Ernst & Young in an broader IT role."
Tools for external clients
In 10 years with Ernst & Young, Waller first developed tools and methodology products for external clients. One of these products was Navigator, which emphasized product management and business process re-engineering for large corporations. They, in turn, licensed the solution. "I was the chief architect for establishing the toolsets for Navigator. Navigator was based on client/server tools. The applications on the server supported a large repository of methods," he explains.
Before long, E&Y decided to phase out developing business methodology tools for external use. "We focused on building the same tools for our own internal use," he says. The tools could be used fairly pervasively across the organization by 60,000 E&Y consultants for project planning, engagement management, time and expense capture, just to name a few applications. "Much of the work I performed at this time provided the principles and foundation for subsequent enterprise architecture efforts," Waller says.
In 1997, Waller relocated to Ernst &Young's Seattle office to launch the Advanced Development Center, which was built to support an alliance that had been formed with Redmond, Wash.-based Microsoft Corp. "I spent two years establishing the center and working with a concept foreign to Ernst &Young, which had always been vendor-agnostic, but now had to be 100% dedicated to Microsoft technologies. Our goal was to develop deep expertise and competencies around the Microsoft platform."
When Cap Gemini acquired the managing consulting practice of Ernst & Young in the late 1990s, Waller was named chief technology officer of the Microsoft practice. "The position emphasized developing e-business standard solutions for Cap Gemini Ernst &Young globally to enable our field organization to use it fairly effectively. At the time, we had begun to develop Web portals to support this effort."
In 2001, Waller began to realize that the direction Cap Gemini was heading was not aligned with his ideals, and made a decision to exit the consulting business. As he explored new opportunities, so was Zurich North America, which had been scouting for a candidate to assume a newly created position: executive vice president for e-business. The search proved to be a protracted one. Then, Waller entered the picture.
Frank Patalano, CEO of Zurich North America Services, was impressed by Waller's competencies in a wide range of e-business functions.
Patalano says he visualizes Waller in his new post serving as a thought leader and e-business strategist as the company moves to transform its business models by integrating the Internet and other emerging technologies into its operating platform.
"This newly created position will be a critical component of our overall effort to leverage technology," Patalano says.
As Waller contemplates his new responsibilities, he is eager to bring his diverse e-commerce competencies to the Zurich North America enterprise. A year from now, he hopes to establish a network of new e-distributors and alternative partnerships, which will be created through ongoing technology innovation.
But you have to walk before you run. Over the past six months, Waller has gotten off to an auspicious start by taking care of the basics: establishing a strong working relationship with Zurich's IT unit.
"It's gone extremely well because we're all on the same page," Waller says. "We're trying to build a partnership between e-business, IT and process engineering. We're in full agreement that to make this partnership work, IT can't establish an enterprise architecture alone."
With IT and process engineering long established, Waller describes Zurich's e-business piece as the one that must now forge a permanent identity. Currently, he describes Zurich e-business as "a loosely coupled group of individuals who are called upon to provide direction and establish innovation for business processes."
Presently, only one individual reports directly to Waller, but as the e-business unit matures, he expects to have more oversight.
When he does, Waller plans to espouse his long-held management style to manage by example and set resources off in the right direction, and providing a buffer once in a while.
"Managing in a 'hands-off' manner enables you to get your (people) more interested in what they're doing-because when you're a hands-off manager, your people are allowed to make mistakes, learn and grow," he says.
As he eyes some of the existing industry automation initiatives that have been launched, Waller plans to have an active role leveraging ACORD standards for Zurich P&C product lines, specifically identifying solutions to enhance distributor/producer relationships, agent/broker relationships and leveraging automation via the Web-whether for interface or business-to-business level communication."
In classifying the missteps that have befuddled insurance carriers in their quest for automation integration efficiency, Waller sees the dilemma as more a case of not classifying data appropriately and adding value to data. "I don't think rebuilding legacy systems is the answer. A data warehousing initiative certainly can help," he notes.
Taking a page from his experiences with Cap Gemini E&Y, Waller is a firm believer in constructing portals designed with customized interfaces.
"All the various domains-customers, employees and third parties-are equipped with different roles. We need to foster tighter relationships with various producer levels," he says. "Designing flashy Web sites is not the solution; the value you can add is. If you can provide a standard framework and realize it goes back to the data, and leverage it appropriately to the different domains, you're well down the road to success. It's not rocket science."
An Inside Job
Waller is confident that the internal competencies of Zurich's shared services platform will be pivotal in making significant strides in a great number of e-business areas.
There's been an inordinate level of activity in the insurance industry regarding ambitious-if not unprecedented-outsourcing arrangements where insurers are farming out their entire IT help desk services to a third party. Waller doesn't believe Zurich needs to go in that direction.
"We do outsource various pieces of our business. If you can justify it financially to do a grand scale outsourcing, it might be explored," he says. "We've taken steps with Shared Services where we've partitioned the operations and maintenance piece away from the applications space and the development of new applications.
"We still believe we can do it cheaper (internally). We provide a charge-back model to the business units, and they hold us accountable. They will be the first ones to say if someone can do it better." With the triumvirate of IT, e-business and process engineering lighting the way, Waller believes Zurich can make critical quality assurance steps in several areas. Two areas are claims management and new product development.
"There are two approaches with claims management," he says. "We have developed metrics that can enable quick claim settlement. Some of the metrics revolve around customer experience and driving home that we need to make sure there's only one person a customer talks to and doesn't get routed around.
"We're hoping to measure and improve our processes by putting into place features and functions to measure this based on customer experience. Claims efficiency was once measured by the unit cost of settling a claim. Now, the approach emphasizes the customer's vantage point and how they measure us. We can make radical improvements."
In the development of new products, Waller will be busy trying to re-engineer some premises that are product-independent and establish a foundation or platform for some of those underwriting fundamentals.
"Data collection and quickly capturing and categorizing data is a key premise," he says. "If we can provide the platform to enable our underwriting experts to establish rules for a terrorist risk insurance-providing the right platform and generating the data capturing capabilities-then we're leveraging the expertise that's behind the curtain."
Handling adversity is one of the virtues that will serve Waller well as he settles into his new position. He discovered this during his days as a consultant, because "when a corporation brings in a consultant, there's often a fear of threatening someone's existence," he notes.
"Several years ago, Ernst &Young was involved in a large project with Dell Computer. I had to work with a Dell architect, but we didn't see eye to eye initially. However, by generating quality work and quality deliverables, we overcame that adversity and in the end that architect and I became close allies in helping achieve goals for Dell enterprisewide."
Handling adversity isn't the only virtue that Waller can bring to the table at Zurich. Working for Microsoft can imbue some innovative influence as well.
"One of the advantages of spending five years with Microsoft is that I had a chance to see what it was like to stay ahead of the industry I was working in and enable clients to leapfrog their competitors with technology," Waller explains.
"This is one of my objectives at Zurich-to keep Zurich many months ahead of competitors with respect to applying technology to either opportunistic activities with customers as well as internal processes, and squeezing every last inch of efficiency by applying technology to business processes."
Richmond N. Waller
Masters of Science, engineering, Southern Methodist University; Bachelors of Science, aerospace engineering, University of Florida, Gainesville.
2001 to Present:
Executive vice president of e-business, Zurich North America, Schaumburg, Ill.
1996 to 2001
Chief technology officer, Cap Gemini Ernst & Young,
1992 to 1996
Lead technical architect on the Account Life Cycle program, Ernst & Young LLP, Center for Business Transformation,
Las Colinas, Texas.
Senior consultant for the aerospace and defense practice at Technology Solutions Co., Roanoke, Texas.
1986 to 1988
Engineering senior, General Dynamics Corp., Ft. Worth, Texas.
1984 to 1986
Teachers assistant and machine shop assistant for the Engineering Sciences department, University of Florida, Gainesville; task manager and analysis engineer for the Space Shuttle program.
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