In an era of financial services consolidation, Prudential's Barbara Koster is laying the foundation for an enterprise-wide view of customer information.Barbara Koster faced a formidable challenge soon after she became CIO for Prudential Individual Financial Services in 1997. Kostner was put in charge of a program to bring field sales automation to the company's 12,000 agents and field managers.

Throughout Prudential's 123-year history, agents had used traditional face-to-face sales processes and had shown resistance to the company's previous attempts to automate their sales and communication efforts. Three years and $103 million later, the LaunchPad program has put laptops in the hands of Prudential's geographically dispersed sales force and has revolutionized the way these agents conduct business (see "Laptops Help Agents Who Are On The Run," May).

"The challenge was to create one systems group that supported the diverse marketplace of our agents," Koster says. "We had to solidify the technology infrastructure that supported the field so that agents could better service their customers and communicate more efficiently with the home office."

Koster joined Prudential in November 1995 as a vice president of customer policy administration and management information systems. Two years later, she was promoted to CIO for Prudential Individual Financial Services and corporate vice president for Newark, N.J.-based The Prudential Insurance Company of America. With 1999 annual revenues of $26.6 billion, Prudential is one of the largest financial services providers in North America, with a product portfolio that includes life insurance, banking, securities, investment services and health care policies.

Management strengths

Prudential executives who know Koster say the success of LaunchPad demonstrates her management strengths and technology vision. Koster oversees a staff of 800 and an annual IT budget of $485 million. Her boss, William Friel, senior vice president and corporate CIO, says he had no doubt Koster could successfully meet the challenge of the mammoth LaunchPad project, the largest technological initiative the corporation has ever undertaken.

Koster's technology know-how and excellent communication skills also have served her well throughout her career, says long-time business associate Bob Forman, managing director of Stanford Consulting Group in Bay Shore, N.Y.

"She understands technology very well and also has the ability to communicate her ideas and concepts to get the resources and support she needs to successfully complete projects," Forman says.

Supporting business goals

Prudential's decision to give laptop computers to field representatives required not only a complex technology installation, but a major shift in the company's business culture. Koster believes the LaunchPad program demonstrates how technology is supporting Prudential's strategic goal of unifying its five independent business units to operate with the standardization and efficiency of one company.

Adding to the complexity of the project was the fact that Prudential's insurance business is divided into three groups that focus on distinct customer segments. Prudential Insurance serves the mass market, Prudential Preferred has a product mix for affluent customers and Prudential Select targets extremely wealthy consumers.

"We had to bring together three different technology groups that were working with different markets and even different agent configurations such as union employee, independent agent and broker-dealer," Koster explains.

Establishing a common infrastructure helped unite the various insurance businesses and was a cost-effective alternative to developing separate systems to support the three business units. And, by supplying agents with state-of-the-art sales and information tools, the company addressed its business goals of improving customer service and need fulfillment, she adds.

For the LaunchPad program, Prudential equipped its 12,000 agents and field representatives with IBM ThinkPad laptop computers. Software was customized to meet agents' needs, including a client database that enables agents to organize prospects and customers and search capabilities to find gaps in individual clients' coverage.

The personal analysis software enables agents to gather information about customer needs and make recommendations about which Prudential products can fulfill those needs. Once needs are established, agents can then use presentation software to illustrate Prudential products and provide asset allocation advice. The analytical tools that are provided on their laptops enable agents to explain complex products and services to their clients, such as estate planning, college funding and retirement planning.

Reducing paperwork

"Besides sales and analysis tools, we also saw a tremendous need to use communication software to better link the geographically dispersed field agents with the home office and help eliminate unnecessary paperwork," Koster explains.

To that end, Prudential installed Lotus Notes software on the notepad to enable agents to link up with the home office and customer service centers, where agents are able to obtain up-to-date client information from a central database. Templates also were created that enable compliance officers to automatically review e-mail for adherence to regulations on financial client communications, which helps eliminate excessive paperwork for agents.

With LaunchPad, agents also can access current forms, letters and marketing materials using Lotus Notes. In addition, underwriter manuals and courseware are available as online reference material.

Prudential's field offices were also upgraded as part of the LaunchPad project. The company installed new wide-area networks, and local-area networks were installed to connect computers within agencies to the home office, providing improved access to information and eliminating further paperwork.

Recognizing that the benefits of technology cannot be achieved if people are unfamiliar or uncomfortable with it, Koster says she is committed to providing ongoing training to help agents learn how to use new software and upgrades quickly and easily.

Information sharing

Although LaunchPad has enabled field representatives to access customer information remotely, Prudential had to first unify customer data that was being stored on many disparate systems.

Prudential's enterprise customer information warehouse has pulled together three terabytes of data that previously resided on multiple mainframe systems, which could not be accessed across business units. As a result, customer data is available to any unit, and customers now receive a monthly statement with information and performance updates on all their Prudential holdings, investments and products.

"We now can give the customer the ability to look at Prudential as one, while giving ourselves the ability to really understand the full portfolio of the customer," Koster says. "By compiling this data in one source, our different business units can access our wealth of information about our customers."

Improved customer service also includes a renewed commitment to advanced call centers that enable call center representatives to access the data warehouse quickly to view and retrieve customer data. Prudential also has upgraded its call center tracking and monitoring software to evaluate how customers' inquiries have been handled, and determine proper call center staffing levels.

Online account access

The Prudential Online Account Access program, which was launched in March, enables agents and customers to go online and access the same across-the-board information about their accounts and portfolios. Through a self-service model, customers also have the ability to conduct transactions such as mutual fund exchanges.

In 2001, Koster says the company wants to expand those capabilities to include fund reallocation and payment transactions as well (see "Answering The Call," October).

"The move to the Internet is a major focus of ours with many projects relating to it," Koster says. "We're working to get all our products deliverable through the Internet, as well as to better utilize its customer information capabilities for our agents and service reps at our call centers."

Fostering teamwork

The mark of success for any CIO is helping senior executives understand the role that technology plays in helping an organization achieve its strategic business goals. That understanding is achieved through collaborative efforts such as the product development process that includes IT and business leadership.

"The most important factor is that we all come to the table at the start of any new idea," she explains. "We work together to generate the idea and then flesh it out so that we all understand the different roles we must fulfill from a business and technolgy perspective."

Koster cites a new term insurance product recently created by the company as a good example of that collaboration. The product required a new policy administration platform that was flexible enough to change rates and pricing as the market changed. By being part of the process from the beginning, Koster's department was able to choose a new policy administration platform, design the product features and load the new system in a timely manner, which allowed the product to hit the market in just under eight months.

"That's a phenomenal timeframe for a new product to reach the marketplace and can only result from a large coordinated effort across the board," she says.

Koster encourages across-the-board teamwork with her own management staff through semi-monthly staff meetings and monthly "town hall" meetings that are attended by all the employees in her group. "We talk about what new IT projects are on the horizon, what new business products or services may be introduced, and how IT's involvement in those projects, products and services will help meet long-range strategic goals," she explains.

To further emphasize communication and teamwork throughout the organization, Prudential has a television network that broadcasts presentations on monitors in strategic locations, such as the cafeteria. Employees can watch and learn about what each business unit is doing and hear quarterly reports about corporate strategic plans and goals.

"This form of communication allows the technology team to see the connection between their work and how it impacts the other business units and the organization as a whole," Koster says.

Building for the future

As with most organizations that rely on skilled IT workers, Koster says staffing issues, such as retooling current employees, are a major concern for the future.

"Retooling is critical for us because we have many terrific, long-time employees who really know this business," she says. "However, it's difficult to find the time to retrain the employee, test his knowledge and allow him to use it right away in between project scheduling and completion."

To help retain qualified employees, Prudential is committed to providing challenging assignments, a teamwork environment, recognition and reward programs, and periodic market reference reviews to stay competitive in salaries and benefits.

Another future IT challenge for Prudential and the insurance industry as a whole, Koster says, is catching up with the banks and brokerage firms that have implemented Internet technology enabling customers to access their entire financial portfolios, conduct trades, open accounts and perform other transactions online.

The Prudential Insurance Co. is well-positioned to compete with these full-service financial services firms because the company does have business units that offer securities, banking, mutual funds, insurance and property and casualty products and services, Koster says. The challenge will be to integrate the business units-and their underlying technology platforms-into a seamless organization. n

Tina Tapas is a freelance writer based in Prospect Heights, Ill.

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