It's solid. It's established. It's "the rock." And despite a 125-year history and $371 billion in assets that could have slowed it down, Prudential Insurance Co. of America has defied inertia and rapidly transformed itself into a 21st century operation determined to hold its own in the high-speed New Economy. Two recent strategic IT initiatives have contributed significantly to Prudential's transformation. They stand out not only for their scope, but also for the speed with which they've been implemented.Namely, the rollout of the $130 million LaunchPad laptop program, which was initiated three years ago to equip Prudential's entire field force of 12,000 with IBM ThinkPad notebook computers, has been recognized as a phenomenal achievement. "That's just mind-boggling-to roll out thousands of PCs on a very concerted basis," says John McFadden, chief technology officer of Loyola College in Timonium, Md.
McFadden also cites the founding of Prumerica Systems Ireland, Prudential's new technology subsidiary, as an example of the outstanding IT leadership of Prudential's CIO William Friel, whom the college's Lattanze Center for Executive Studies in Information Technology selected as its 2001 IT Executive of the Year. Prudential formed the technology subsidiary almost a year ago to develop loyal, in-house IT talent and reduce the company's reliance on outside contractors.
Both the LaunchPad program and Prumerica Systems Ireland are flourishing, Friel reports. For example, this summer, the field sales force is receiving upgraded laptops-IBM's A21 series, which are about four times faster than the previous model and are loaded with Windows 2000, Lotus Notes R5 and various customer management applications (see May 2000, "Laptops Help Agents Who Are On The Run").
And Prumerica is growing-as expected (see March 2001, "A Chip Off The Old Block"). "We had originally planned to have 150 developers on board by the end of this year, and we'll exceed that goal," Friel says. Not only has the company been able to recruit skilled developers, but also the developers have already demonstrated success with their projects. As a result, the development center staff in Ireland will increase to approximately 335 by the end of 2002, he says.
Although these two large IT initiatives have been most remarkable for the company, Prudential also has been making great strides in the less newsworthy- but no less important-e-business arena, an ongoing effort that Friel refers to as a "continuum."
E-COMMERCE CONTINUUM
"I call it a continuum because it will go on ad infinitum," he says. "It's part of our strategy to provide both financial advisors and individual agents, as well as customers, with access to securities, banking, retirement plans, insurance accounts, whatever. And the customer will choose the channel they wish to use at (any) moment in time."
Early this summer, Prudential advanced a couple more notches on the e- business continuum when it redeployed the Prudential Securities Web site as PruFN.com and launched PrudentialXpress-both which cater to the needs of affluent customers.
"We renamed the PrudentialSecurities.com Web site, and have been adding transactional and informational capabilities," Friel says, describing PruFN.com. The Web site focuses on equities, but it also connects visitors to all of Prudential's businesses, products and services.
Customers can take advantage of the advanced features on the site, such as access to S&P RatingsXPress, which enables online searches of debt securities rated by Standard & Poor's. PruFN users also have access to information related to their retirement services accounts, or property/casualty and life insurance accounts, Friel says. "It's all there for them."
PrudentialXPress is a Web-based business-to-business platform that was designed to respond to industry trends indicating that affluent customers increasingly are choosing independent advisors to help them with purchasing financial services products. To make it easier for independent broker-dealers and brokerage general agencies to sell life insurance products targeted at mass affluent, younger, clean-risk clients, PrudentialXPress enables them to submit a short, electronic application to begin the underwriting process.
"PrudentialXPress is important because it shows that everything we build out is going to be built out with the Internet in mind," Friel says. "It makes sense. We need to create that kind of ubiquitous access to clients as well as to sales agents and third-party brokers."
Prudential is very much focused on two objectives when it determines IT strategy: aligning technology with the business goals, and using technology to differentiate the company in the marketplace, says Friel, who oversees a staff of nearly 6,000.
"When we think about servicing a customer, they can come through the Internet, through an agent or financial advisor, or through the interactive voice system, and they'll get the same information in a timely way," Friel says. "Those are the kinds of things that will differentiate us in the marketplace."
MARKET DIFFERENTIATION
For instance, Prudential this year rolled out additional capabilities to retirement account customers who can now access information on their 401(k), 403(b) and 457 retirement plans via wireless Palm hand-helds and Internet- enabled cell phones.
"Right now, we're working on interactive voice recognition technology," Friel says. "Do you know what it's like to get caught in IVR hell? Wouldn't you just love to say, 'Get me my account,' and the system would recognize it?" Prudential is in the preliminary phases of developing this capability, he says, with one pilot completed in-house and another one planned to begin servicing customers by the end of this year.
Market differentiation is what Prudential needs now more than ever. In May, it changed its brand name to Prudential Financial to reflect its commitment to the broader financial services arena, and it also began sending information to 11 million policyholders about its plan to demutualize.
Is "the rock" ready for the inevitable IT challenges of operating in the highly competitive financial services industry-as a publicly held company?
If the last few years are any indication of its ability to adapt, Prudential may thrive.
"It was Bill's ability to transform his organization from an Old Economy company to a New Economy company that put him at the top of our list," says Loyola's McFadden. When some members of Loyola's IT executive award selection committee wanted to pick new high-tech dot-com executives, McFadden says he and others disagreed.
"It's okay to build something new," he says. "But sometimes it's harder to transform."
