Aiming to be a much different organization, The Hartford has completed 20 months of a four-year IT transformation plan. According to John Chu, senior vice president of e-business and technology, property/casualty, the carrier will better manufacture IT, leverage a more streamlined architecture, and employ the best people. From Chus perspective, one measure of success is if other companies come shopping for that talent: Im not advertising for people to come, but that gives some satisfaction weve been able to cultivate a way of doing business thats the best in the industry.

This view was one of many Chu shared with me at the ACORD LOMA forum in May. The transformation he spoke of has a broad agenda, targeting how best to manufacture IT. The carrier has a plan that involves, as Chu termed them, demand management and governance, a global delivery model, an application rationalization strategy, a technology infrastructure strategy, and an alternative sourcing strategy.

But back to the people and managing themnot an easy task. The transformation is changing the way people work, Chu said. The company created a competency model and also has incorporated a change management plan. However, the key to successful transformation is the communication, Chu asserted. At the heart of [the transformation] is making sure our people know exactly what were trying to do.

I tend to be a softie and feel for the employees who arent able to adapt in such scenarios. Still, I recognize historically the ongoing evolution of business makes some products, processes, and, yes, people obsolete while creating new opportunities for others. The industrial revolution changed how work got done as did the advent of computers. Today, were dealing with such politically dicey practices as outsourcing (for more, see Culture Shock, p. 14). Again, I feel for IT people who cant find jobs because those functions are sent near- or offshore. But the big-picture business model continues to evolve unimpeded, and going abroad appears part of the next iteration, at least as long as governments allow it. Going abroad or staying domesticeach has significant consequences. It comes down to essentially picking your poison, so to speak, and many companies, including carriers, are picking overseas.

As noted, The Hartford has what Chu called an alternative sourcing strategy, which the company is using to aggregate its spending, going from more than 400 vendors to a handful to build capacity and access otherwise unattainable R&D. Its not a cost play as much as its a capacity and access play, maintained Chu. The motivation, he said, is not to cut jobs to save money. Affected employees will be redeployed when possible, he added.

Meanwhile, The Hartford has reached new heights. With net income that topped $2.1 billion in 2004, it placed number 88 on the Fortune 100 list. Itll be interesting to watch whether the transformation helps the company to grow further. If the transformation works as planned, Chu may find hell get his wishcompetitors coming to raid the best IT shop in the business.

Sharon S. Schwartzman
Editor-in-Chief