Barbara Piehler represents a new breed of corporate CIO, one that no longer requires extensive information technology experience. In the insurance industry, this trend has been reinforced recently through the appointment of several CIOs who have built their reputations on the business side of the industry.But, while many of these executives eventually blended IT with business competency prior to taking over as CIO, Piehler, who is senior vice president, information systems, and CIO for Milwaukee-based Northwestern Mutual Life Insurance Co., had only accumulated about a year of information systems' experience by the time she assumed the CIO position in October 2002.
Hired to succeed now-retired Walter Wojick, Piehler faced the prospect of mastering the dynamics of IT in what has been an on-the-job learning experience.
At Northwestern Mutual, thrusting executives into new areas of responsibility is not unusual.
An old-money, conservative corporation that recognizes value in promoting from within, Northwestern Mutual executives watched Piehler mature while overseeing multiple areas of the company. Taking the reigns of IT was viewed as a natural evolution.
"I've been with the company for 20 years, but it was only in the past two years that I've been involved on the IT side," Piehler says.
"I came into this position with a business perspective. We're a mutual company and the emphasis has always been on the (information technology) organization helping the business side provide solutions for our policyholders."
Undoubtedly, Piehler has developed a broad sense of scope and scale since joining Northwestern Mutual Life in 1983.
A growing producer network
After working for two local brewers in Milwaukee, Piehler began at Northwestern Mutual in the controller's department. Later, she became assistant to the president and was elected vice president of corporate services after that.
In 1994, Piehler, who holds an accounting degree from the University of Wisconsin, was named vice president, assistant to the president, and a year later was named vice president, policyowner services. In 2000, she was appointed vice president, Internet, and a year after that became vice president, information systems-in charge of application development and support.
During her stint with policyowner's services, Piehler recognized how vital it was to provide the company's network of independent sales representatives the necessary support to optimize handling client accounts.
Over the years, as Northwestern Mutual has added more broker-dealer affiliates to the fold, IT tools and technologies have taken on even greater importance.
This producer network has consistently grown. Northwestern Mutual now has 7,900 representatives in the U.S.-all regarded as commissioned contractors.
These producers comprise The Northwestern Mutual Financial Network (NMFN), the marketing name for the company's sales and distribution arm.
NMFN's mission is to "develop enduring relationships with clients by providing expert guidance for a lifetime of financial security," says Piehler. "Representatives work closely with clients to develop customized plans that help meet long-term financial goals."
Over the years, Northwestern Mutual has built a reputation selling products in planning stages-a pyramid approach that capitalizes on an individual's various life stages.
Identifying these stages is predicated on data integration and workflow tools that enable a producer to quickly capture trends and store policy data.
"It's an enterprise approach to selling products. As such, we must deliver systems support our field force-automation tools instead of paper to enhance client management," she says.
"As a life company we're able to take a longer view of customer needs and how we can better leverage relationships."
Legacy environment
Northwestern Mutual operates in a legacy system environment. But unlike other large insurers that manage multiple administration systems, Piehler has to maintain only two core systems.
The company's systems are separated into two groups: one to support investment product administration and the other for risk management products, primarily life and long-term care products.
To date, the company has 3 million life policyholders with 4.7 million policies for permanent and term coverage. Other lines of insurance include disability income and annuities.
"Rather than having to hard code everything, we have been able to identify middleware for data delivery purposes within a component-based approach," says Piehler.
The delivery of such tools is performed by Northwestern Mutual's 1,000-person internal IT department, the majority of which consist of analysts and programmers, but which also includes higher level support encompassing human resources, IT architecture and infrastructure and contracts/budgets.
At a time when many carriers are scaling back on internal IT hiring, Northwestern Mutual is hiring new people on a regular basis.
From an external standpoint, Piehler relies on 500 contracted IT people. Some of this support represents application development outsourcing but, by and large, the company does not and does not intend to, engage in outsourcing blocks of its IT assets, she says.
In less than two years on the job, Piehler is pushing most, if not all, the right buttons needed to transform Northwestern Mutual into a provider that can attract independent producers not only via its time-honored reputation, but to it's commitment to e-business excellence.
Actually, Piehler says that for years the company has leveraged technology for its producer network-it's just that its investments have always been selective and qualitative rather than carried out on a grand scale.
For instance, Northwestern Mutual for decades has recognized the role of automation in its business. It established its proprietary Links System several years ago, which links producers to company back-end data for client account management.
The evolution to Links comes in the form of extranets that enable producers to pull together essentials for client account management. Planning tools, including asset allocation software, help producers better assess clients needs.
However, despite it's early recognition of information technology to drive the operation, Northwestern Mutual has never been inclined to implement all the IT-driven bells and whistles that other companies might, simply because of its ongoing commitment to use traditional means to foster client-producer relationship building.
"The systems we have developed for producers are made to enhance personal interaction, and not act as a substitute for personal interaction. In fact, we have a policy of not selling anything directly from our Web site--we want the field network to be fully engaged in that process," Piehler concludes.
