Five Rules

While Sandee Shivers has been senior vice president and CIO of AEGIS Insurance Services, Inc., for the last year, she says in her previous position it took her two-and-a-half to three years to get her IT department aligned to her ideals. For me, she notes, the IT department is always evolving. She advises insurers to focus on five specific areas in building an IT team:
The number-one thing always is the business need from the point of view of where [the business unit] is going, Shivers says.
The second thing, which often is missed, is architectural vision, she continues. You can have a good understanding of the business need, but you can be distracted by many of the vendors out there, especially now, because insurance is a big target for technology. If you dont have a real vision of your direction from a technology point of view, you get sidetracked, and you wind up with a mismatch of applications that dont support your business.
Third, you have to have metrics that measure and help change behavior, she adds. Metrics to support the business side where they need it and, for me, in terms of how I run my business.
Staffing is the fourth area. One of the first tasks Shivers worked on with AEGIS was defining the roles of the in-house IT staff and the outsourced work the carrier used.
Finally, she concludes, the way an organization is structured has a lot to do with how you are able to support the business.

Side by Side

While not all members of the MONY IT staff sit alongside their business partners, there is a great deal of interaction within the company, according to Rogers. In the aforementioned life unit, he explains, although they are members of the IT department and report to me, they sit right in the business area, he says. They work side by side with those folks and learn a lot about the business just from the daily interaction that occurs. They are very much viewed as part of the business team.
Such interaction is not limited to the life company, however. MONY routinely asks leaders from different lines of business to speak to the IT staff about their businesses, the issues they face, and how IT can help them achieve greater success, according to Rogers.

The interaction between the two sides has led to a reversal of an earlier trend in which IT would raid business units to attract members for its own team. Today, Rogers says, most of the shifts come from IT people moving into the business unit. Weve probably moved 10 to 20 people in the last three years into the business unit, he notes.

The people moving out of IT view some new business tasks as more intriguing, Rogers believes. Some people feel they have more of an impact when they are working in the business areathey are influencing the business more, explains Rogers. If youve been in IT for 10 or 15 years, its kind of exciting to look at an opportunity to learn something new. He adds he also has welcomed back into IT former team members who moved over into the business side for a while and wanted back into IT.

Looking Outside

The outsourcing question is a challenging one for insurers in todays economic environment, OConnell maintains. When you look at outsourcing, you are faced with competing forces, he says. One trend is there is more outsourcing going on in the industry, particularly offshore. On the other hand, most companies are in a situation where they are not resource constrained. If anything, they have more people in IT than they probably have work for.

Most carriers use outsourcing to augment staff during busy periods or for cost savings, but Shivers says she has specific projects in mind when she goes outside for help. Im looking for them to do repeatable, straightforward activities, such as upgrading an application to a new release, applying patches, or if we want to make some enhancements or coding changes. I also have some systems I want to sunset, so I would use vendors for that, too, she says.

While Rogers reports he periodically studies the outsourcing option, three times in the last four years he assessed it and came away believing it was best to keep operations in-house. That doesnt mean he wont quit looking. In todays world, were all trying to deliver our services at the lowest cost possible, he says. The savings always end up being two-and-a-half to three years out. For the numbers were talking about, we made calls that we were going to stay onshore.

Outsourcing can save money and optimize efficiency in certain cases, OConnell believes, particularly in areas of the business deemed nonstrategic. Take something like legacy application maintenance, small enhancements, or systems that may be supporting closed blocks of business, he says. Why shouldnt you outsource those areas?

OConnell also encourages carriers to look at the staff and determine what skills are available in-house for certain projects. You have to look at things that are strategic and nonstrategic, but you also have to look at the skills dimension, he says. Leverage outsourcing where your skill gaps are.

Demonstrating Skills

Shivers looks for specific skills in members of her team. The skills I want are problem solving, good judgment, the ability to write and explain complicated thingsnot necessarily in technical jargonand the ability to listen and give feedback to others, in addition to the traditional in-depth technical skills, she says.

Since joining AEGIS, she has been working on transitioning some members of the staff and some of the jobs done for IT by outsourcers. We had employees doing some of the things Id like the vendors to do, she explains. We werent using all the skills the [in-house staff] could bring to the table. She discovered her employees had good problem-solving skills. So I needed to move them into roles where we could take advantage of those skills, she says.

Shivers defines problem solving as the ability to offer up new ideas, even if the answer seems obvious. When I say problem solving, Im really saying theyve learned enough about our business that they can offer alternatives, she says. Well have clients who have a need and already may have thought through how they want it to [be solved]. I like to have people who will come together in a group and offer a variety of possibilities.
MONY is big on the softer skills for its IT employees, asserts Rogers. When we interview people, were looking for those who are accountable, have demonstrated leadership in some part of their life, have a propensity for taking reasonable risks, are strong communicators, and have a positive attitude, he says.
Solving problems is important, as well. We like people who can jump in, solve problems, and be creative, says Rogers. In addition to putting them through an aptitude test for the technical end, we put them through a pretty comprehensive meta-model that gets at the core of who they are and how theyve handled difficult or challenging situations in the past.
Shivers values an understanding of insurance for her employees but admits thats not her first concern. If I was making decisions on people with equal skills and one person had a stronger insurance background, Id go for the insurance background, she says. I want people to think in terms of the business focus. Different businesses have different focuses and goals. In our case, were really focused on customer service to our internal business units as well as to our external policyholders. Id rather have someone with a strong customer-service orientation and a moderate level of insurance experience rather than a highly experienced insurance person with a weaker customer-service background.

New Recruits

MONY has relationships with six universities in the upstate New York area and has established a successful internship program. Students coming out of college in the past usually held management information systems (MIS) degrees, but in recent years, most recruits have had either engineering degrees or computer science degrees. In the last few years, Rogers says, the young people coming out [with MIS degrees] didnt seem to have the technical depth or inclination.
Were looking for people who are balanced, he continues. People who can handle the technical, the business, and the soft skills. You also have to be willing to do some amount of programming for some period of time. You have to pay your dues. He adds MONY even has an IT employee with a music degree.

In the House

There are at least four IT jobs, Rogers believes, that should remain in-house: business analyst, systems analyst, security governance, and project managers. You really need to have those core competencies in-house, he says. When you get into development projects, its a little more challenging, certainly where youre doing package integration, iterative development, or Web development.

Determining those core competencies comes with experience and from doing projects both in-house and with outsourcers. In our new world, the lines of business really call the shots, says Rogers. If we cant prove our value proposition, the lines of business will go outside. They have that choice. We are not a captive market to them. We have to prove our value every day. If they have someone in their group supporting them, learning their business, proving their value, they are less likely to want to go outside.

The only decisions Rogers says he gets to make about outsourcing work come when the project is considered purely technical. Things like Y2K and COBOL conversion fell under that heading.

Helping Others

Shivers says the customer-service area of her companys IT work proves the value of the IT department. It calls for good listening skills and the ability to document what the IT member has heard in a way other people understand. This attitude is spread throughout the company, as evidenced by Shivers own position among the senior executives at AEGIS. The IT people are tightly integrated here, she says. A simple example is my role. Im one of the senior executives, and I sit with the other senior executives when decisions are made. I sit at the table, which isnt true for all CIOs in insurance. Its an attitude the company has. We are all in the same business and working for the same goals.

Shivers circles back to her five focus areas and notes if those points are in line and staff members clearly understand them, they become better and more cohesive, as they are able to understand their own performance. Staff members feel good about what they are doing, they see what they have to do, and they know how to prove it without a lot of personal feedback from me or my managers, she says. The bottom line? My managers now can be more strategic.