The CIO (U.S.) Enterprise Value Awards earlier this year were awarded to entrants based on the CIO judges’ examination of value from five perspectives: the impacts on finance, strategy, customers, operations and society.
Financial impact is the big one. It relates directly to ROI through lower costs caused by streamlined operations and increased profits. Strategic value comes into play when a company is able to enter new markets, transform the competitive landscape within its market and boost its market share.
Systems with significant customer impact provide the customer with more choices for products and services at a lower cost, and more rewarding transactions. Through increased operational effectiveness and increasing margins, the winning organizations were able to demonstrate operational impact and value.
While all industry winners exhibited exemplary enterprise value, their particular strengths emerged in several categories, including change management, integration and leveraging of customer data.
The New York City-based Guardian Life Insurance Company of America was among the entrants viewed as masters of change management.
Executives at Guardian Life Insurance had a change management challenge when they rolled out a new insurance and annuity policy administration system dubbed Transcend. The system, which replaced an aging legacy system, enables real-time automated annuity policy processing and allows Guardian to connect to third-party broker dealers and build relationships with the brokers and their customer base.
According to executive vice-president and CIO Dennis Callahan, Transcend was successfully deployed with little resistance from internal users. IT executives created the usual menu of workshops and training sessions for users when the new system was launched. But the key, Callahan says, was the partnership between business and IS. There’s no battle between the CIO and any business head for control of the agenda. “People are getting the same message from the top down. That eliminates the tension and simplifies change,” he says. With $7.2 billion revenue (all dollars U.S.), 5,500 employees and 2,700 field agents, the firm maintained a tight business and IT alignment to implement a Web-enabled insurance and annuity policy administration system that enables real-time, automated annuity processing.
Called Transcend, the system helps Guardian build valuable relationships with powerful broker dealers, a distribution channel it could not leverage with its legacy application. Its Magic fourth-generation programming language links J2EE and .Net Web services while Web applications run on PCs that access IBM Corp. AIX server over a TCP/IP network in real-time. It runs with an Oracle database. The investment has been $13 million to date and annual maintenance runs $1 million. The value is that Transcend has reduced back-office operating expenses by 40 per cent. Plus, the time to market for new products shrunk from more than six months to three or fewer.
Consolidation is the challenge Academic Management Services Corp. (AMS) faced as a firm that aggregated multiple databases into a single system that helped drive customer service, internal efficiency and cost savings. Similarly, while many companies have huge stores of customer data, not many know how to dig deep into that data to generate value. However, AMS was among those firms that have learned how to make the most out of data they already had to create new lines of business, new opportunities for revenue, and greatly increased customer satisfaction and loyalty.
This banking/brokerage firm of Swansea, Mass. with 500 employees and a $1.4 billion loan portfolio implemented a Web portal that provides academic loan counsellors with integrated access to several internal and external systems, helping them match the right loan products to a family’s financial needs. Called Integrated Counseling and Enrollment (ICE), it gives counsellors the ability to create and track their own accounts. The system also enabled AMS to enter the loan consolidation market.
AMS executed in-house what it does best (programming), and outsourced what it doesn’t do best (user interface design). At the heart of the system is a Hewlett-Packard Co. eight-way N Class platform running Oracle’s relational DBMS, and Dell Inc. and Sun servers with XML, Java, Web services.
The initial investment was $311,500 for development. Annual maintenance runs $124,600. And here’s the value: in its first year of operation, ICE enabled AMS to grow its consolidated loan portfolio to a $175 million business and cut the time to process loan applications from 50 days to five days.