Below is the 11th of 11 Novarica Research Council Impact Award nominee case studies, which INN is presenting in no particular order. The awards will be presented at the research and advisory firm’s August 13th event in New York and honor best practices in insurance industry IT initiatives and strategy.
Foresters, a fraternal life insurance and investments provider with more than a million members, recently completed a massive transformation project involving its infrastructure, new business systems and policy administration.
The initiative — run by the company’s project management office — was mainly designed to address challenges in speed-to-market related to its expensive and inefficient legacy environment, which was mainframe-based with hard-coded product and process logic.
As part of the effort, systems vendors and services providers participated in daily, weekly and monthly review sessions and project tracking. Senior company executives were kept informed of progress, and Foresters created a monthly steering committee to deal with any priority items that came from the joint project teams.
The initiative began with a review of existing processes and the creation of a vision of business process reengineering, in which business sponsors were heavily involved. These sponsors also took part in monthly governance review meetings.
In all, the project team included more than 100 internal IT staffers as well as about 300 contractors, distributed across six locations. The project, which took about two years to complete, involved multiple systems replacements and additions.
New infrastructure included an enterprise service bus and a data warehouse built on a Teradata platform and leveraging SAS tools. Applications included MajescoMastek’s New Business & Underwriting System and its Elixir North America Policy Administration System, as well as Microsoft Dynamics CRM.
The multi-vendor, multi-system nature of the project made over-year planning and integration of project plans a challenge. The team addressed this by focusing on communications, including regular meetings between all parties, and by ensuring that there was a clear line to decision makers through the project governance process.
As a result of the undertaking, the company reports that IT and operational costs have been reduced by more than $15 million per year. In addition, speed-to-market has been improved and service levels to producers and policyholders have been enhanced through the delivery of new capabilities.
The company credits its successful execution of the project to the extent of the upfront planning, including the implementation of the enterprise service bus and data warehouse prior to moving forward with the new applications. A focus on testing and a willingness to be flexible with requirements also were keys to success.
In his own words, Peter Sweers, SVP and CIO at Foresters, shares lessons learned from this project.
Take the barometer of your organization’s preparedness to embark on a journey like this — know where areas of support around change lie, and where areas of not as much support lie. Also, we had a very robust communication, employee communication training strategy, and a marketing, for lack of a better term, plan. As good as everything went, I still believe we underestimated the amount of impact it was going to have on long-tenured employees who had been doing the same thing in the same way for many years.
Be ready for project fatigue. Multi-year projects never unroll the way you had envisioned. You take a left turn, you take a right turn and ultimately you’re still looking at the value propositions.
Find the right leaders of the project who have that tenacity and staying power, so that the project leadership doesn’t change mid-stream. In a number of the project streams that took a little bit longer, especially, the policy administration engine and the new business piece, I had some project manager changes. Paying attention to retention bonuses, the person’s profile in terms of how long they stayed at an organization, how long the projects were that they’ve worked on, may have resulted in less turnover in the project space.
We fired up eight or nine concurrent project streams. There were many large programs all running concurrently, and that’s where you come up with the number of 300 contractors in six locations, and then four countries. It requires a lot of coordination. For example, launching the new business system in the absence of having the image enablement platform in place wouldn’t have driven any value for the organization. And then you have the infrastructure play of putting the whole Red Hat Linux stack for the back end, and the enterprise services bus to manage all of the transactions. All of it was required to culminate within weeks if not months of each other, that one got delivered and the other one was consumed. It was tested as an integrated service.
Articulate architectural standards beforehand. And anything we had to do or acquire from an industry perspective was shared and either the vendor met the standard or it didn’t get to play. Say you needed to have a SQL database backend or you needed, from an industry perspective, to be ACORD compliant —those were some table stakes. If the vendor met those architectural standards, then it got into the evaluation criteria and so on.
What would you do differently?
I would have hired a left hand. Aside from running IT, and I run also all the operations for the organization. I’m responsible for business continuity, disaster recover, underwriting claims, and the amount of time and attention that this [transformation] took, and, as well as personal energy of mine was phenomenal. I would have benefited from having a senior kind of lieutenant on a day-to-day basis.
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