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Identifying the Insurance & Technology Elite 8 Insurance CIOs

Successful insurance technology executives share common traits, including the ability to establish credibility with the business, build a solid technology architecture, assemble effective teams, and implement plans with an eye to both the short and long term.

Insurance & Technology Elite 8

Insurance companies come in many shapes and sizes. Accordingly, effective IT leaders may draw upon widely varying experiences, personalities and insights. Every senior technology executive brings his or her own qualities to the table. Yet, however unique each individual, those who work with the best in the business recognize common traits that distinguish the elite insurance technology executive.

Technical excellence is essential to the success of any IT organization, and many CIOs are distinguished by their technical acumen. However, elite insurance technology executives know that technology only matters in as much as it serves the goals of the business. Thus, the sine qua non of elite technology executives, insists Larry Danielson, a principal with New York-based Deloitte Consulting, is that they understand that they are businesspeople first, technology people second.

"They recognize that IT is a service function at an insurance company that must continually demonstrate its value to the organization," Danielson comments. "As managers they use the assets entrusted to them -- hardware, software and people -- to produce the greatest return on the company's investment."

Of course, in an era when technology can be a key differentiator for an insurance carrier, making the most of a technology organization's assets involves more than merely straddling the worlds of technology and business; it means understanding both, having the creativity to see how the former can help the latter and having the ability to put that insight into effective action.

The elite CIO's technology depth is essential for designing the right solution, for the right cost, ahead of the competition, according to Paul Blase, Diamond Management & Technology Consultants (Chicago). But technology skills are only the beginning. "Their finance and budget management skills are critical in driving down maintenance spending so that more can be invested in strategic and differentiating business change," Blase says. "And in their spare time," he quips, "they must lead and motivate a large, multicultural labor pool that is employed, outsourced, in-sourced, virtualized and dispersed around the globe."

Having his or her hand in so many aspects of the business requires support from senior management, notes Matthew Josefowicz, managing director of Celent's (Boston) global insurance group. Thus another characteristic of the elite insurance technology executive is the ability to choose the right company, he observes. "No matter how talented or skilled a CIO may be, he or she must have a seat at the top table and be able to participate in strategic discussions with the rest of the most senior executive level as early as possible," Josefowicz says.

Maximizing their influence within those discussions requires CIOs to communicate the value of technology initiatives to business executives across a wide variety of disciplines, Josefowicz adds. They must be able to show their business and financial counterparts how the capabilities that they deliver enable the enterprise to function effectively. For example, technical projects, such as architectural enhancements, must be translated into business value, such as providing increased flexibility and reducing the cost of process change.

Credibility at the highest levels of management may begin with demonstrating the grasp of business challenges and the way technology can address them, but it ends with delivering on promises. To that end, "IT must excel at project management, expectation setting, partner management, and budgeting and forecasting," Josefowicz states. "Over the years we've noticed most CIOs employing their own internal CFOs and larger staffs of business analysts and project managers to ensure that when they take their place at the top table, they are as credible on business management issues as they are on technical issues."

Change Drivers

Clearly, technology executives won't be able to establish credibility up the leadership chain without the trust and commitment of those who report to them. A CIO must be able not only to conceive and convey a practical vision for IT, but also must lead an organization to implement that vision, comments Rod Travers, SVP with Dallas-based consulting firm Robert E. Nolan. "Too often the role of a CIO is confused with managing technology," he says. "In fact, the most successful CIOs lead people and drive change rather than manage technology."

Top IT talent traditionally hasn't gravitated toward the insurance industry. So in order to attract and retain that talent, insurance CIOs must provide an opportunity for IT professionals to grow professionally and make a difference. While compensation is an important ingredient, elite CIOs understand that it is not the paramount factor, Travers insists. Rather, he counsels, "CIOs must instill a collaborative culture with opportunities for individuals to grow -- including outside of IT -- and to contribute meaningfully." Once such a culture has been instituted at an insurance carrier, Travers continues, "Before long your IT organization will be moving faster than those of your competitors, and you will be a magnet for talent."

Being able to build strong teams requires mastery of both internal and external resources, according to Paul McDonnell, global insurance segment leader, BearingPoint (McLean, Va.). For most major IT projects, success depends on a global sourcing strategy that strikes the right balance between homegrown and outside talent, he says. To tackle the challenges of a given initiative, existing staff may need additional training, new staff may need to be hired and offshore resources may play a critical role.

"Regardless of the mix, there need to be people on the project team who have done the type of work involved before," McDonnell asserts. "One of the biggest risks a CIO faces in organizing a project is to try to staff it with resources that haven't dealt with the issues that inevitably arise on large, complex projects."

Additionally, those projects must fit within a technology plan that focuses both on the current year and the long term, McDonnell notes. The question a leading insurance CIO asks is, "What do we want to get done in the next 12 months, and how does that relate to what we want to accomplish over the next three to five years?" he adds.

All planning, in turn, must be based on a solid architectural foundation, McDonnell continues. Newer technologies will play an important role, but the architectural foundation has multiple components, including business, application, data and infrastructure architectures. "All these components need to be incorporated into every project," McDonnell cautions.

Having properly engaged the business, crafted a plan and put the right team in place, the elite CIO will apply effective methodologies and processes for getting the work done, McDonnell says. However, he or she also will be aware of the challenges associated with new practices. "Emerging agile development methodologies can contribute to product success, but they may require more upfront investment in system prototyping and testing before full deployment," he notes.

Getting Results

What distinguishes the elite CIO in the end are results. "We have seen a number of CIOs demonstrate bold leadership in driving enterprisewide, multiyear IT transformation programs in order to align with changing business goals and enable IT to become more flexible, nimble, scalable and cost-effective," comments Michael Adler, global managing partner with Armonk, N.Y.-based IBM Global Business Services. "These initiatives typically deliver cost and productivity improvements. But in many cases the most important long-term and strategic benefits center around speed to market and new product introduction, customer service enhancements and a single view of the customer."

Adler describes a virtuous cycle in which elite CIOs use success to build further success, not only gaining the confidence of the business, but also reaching out to external stakeholders, such as agents, policyholders and vendors, to communicate benefits and obtain buy-in. Success also drives high morale and retention of staff by giving them opportunities to work on more-challenging projects, gain skills and progress in their careers, he notes.

At their most successful, elite insurance technology executives are instrumental in envisioning and shaping the strategic destiny of their companies. They use transformation programs to engage the business in rethinking business models and processes to identify opportunities to share components and services across the enterprise, as well as to craft processes uniquely suited to business, products or geographies, Adler says.

"Elite CIOs are also challenging their business and IT organizations to be innovative in terms of methods, products, IT and business processes," Adler relates. "More recently, a handful of elite CIOs are taking project-centric SOA initiatives to the enterprise level in order to facilitate new business models, drive reuse and support speed-to-market initiatives.


What Makes a Successful CIO?
The constant evolution of information and a changing competitive environment ensure that the profile of the effective insurance technology executive continues to change.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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