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News
for Tuesday, May 25
Technology, Business, and the Future: A CIO Panel
Discussion
Tuesday, May
25
VIEW VIDEO of
CIO Panel: (50 mins 39 secs)
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CIO Panel
(left to right): Regis Delayat, John Kellington,
Ann Purr, Gregory Maciag, Chris Chartrand
& Larry Boyle. |
Legacy systems, the relationship
between business and IT, and current IT priorities
were among the topics covered during Confidently
Meeting an Uncertain Future – A CIO Panel
during ACORD LOMA Insurance Systems Forum. Moderated
by ACORD President and CEO Gregory A. Maciag, the
panel included Larry Boyle, senior vice president
and CIO, Odyssey Reinsurance of America, John Kellington,
senior vice president and chief technology officer,
Ohio Casualty Group, Regis Delayat, group CIO,
SCOR Division Vie, Chris Chartrand, senior vice
president and CIO, GE Financial, and Ann Purr,
second vice president, Information Management,
LOMA. Topics were based
on the responses given by attendees during the
conference’s Sunday Opening Session, which
provided live audience responses to a wide range
of questions. The CIOs used these results as
a stepping off point for their discussions.
A common perception is that
the insurance industry is behind technologically
versus other members of the financial services
community. Purr believed that the industry is
progressing and the issue is more of how one
interprets the meaning of “behind.”
She recognized that other financial services
members, such as mutual funds systems, began
to provide such things as online fund balances
earlier, but the insurance industry is following
closely. Chartrand agreed that insurance was
behind stating that he has worked in other industries
such as manufacturing and this industry is lagging
in such things as automating their supply chain.
Kellington, however, emphasized that the needs
of the insurance industry were very complex and
specific. “We are not producing widgets
but customized legal agreements.” Boyle
thought that greater automation was possible.
“Standardizing the models and data structures
is a solution in my mind,” he said.
Gregory
Maciag and John Kellington discuss the
complex needs of the insurance industry. |
The growing emphasis on
data reporting also generated discussion. Boyle
underscored that better data management supports
an improved understanding of the business. “Standardized
information needs to be better organized and shared
with interested people only,” said Delayat.
“At Swiss Re we are talking about creating
‘business intelligence’ for the profit
and benefit of the business.” Chartrand added
that there is a need to “get data out much
faster,” noting that his company has a CEO
“cockpit” showing the health of the
business that is updated daily. Other processing
dashboards are updated every five minutes. GE is
also looking to provide reporting tools that allow
units to explore their own information more easily.
Legacy systems were
again identified as the greatest technology hurdle
and some panelists recognized a trend in the
last few years away from wrapping and toward
replacing. As Kellington joked, the true definition
of legacy is probably “anything that is
in production.” Boyle added that the cost/benefit
equation often leads to the desire to “get
a few more years out of the system but you can
only go so far extending the life.” Chartrand
stated that in addition to wrapping, GE uses
another option — outsourcing. Third party
administrators can use hard to find specialists
in maintaining these older systems.
“Legacy systems tend
not to go away,” said Boyle, adding, “we
decommissioned a system and that doesn’t
happen often.” Chartrand said that when
he joined GE Financial, he inherited seven legacy
systems.
When asked if they thought
technology has reached a level of maturity to
enable web services, 60% of conference attendees
using their audience response systems, said yes,
another 30% said no. Panelists disagreed and
felt that the technology is available. Kellington
described it not as a technology issue but “a
standards issue whether you can have a transaction
between business partners that can read and write
and be understood.” Chartrand commented
that Web services “are here to stay, but
clearly if they were to standardize more quickly
every industry would pick them up quicker.”
Boyle agreed that the technology is mature and
that it is just a matter of determining its best
application.”
The ratio of budget spent on
maintenance versus new development was discussed
as well. Delayat believed that it was at 75%
for operations versus 25% for projects. Chartrand
believed it was more an 80/20 split. However,
the specifics as to what was included as maintenance,
such as telecommunications, license fees, software
and hardware amortization, and other items, made
the real proportions hard to determine.
Gregory
Maciag and Thomas Donaldson conclude the
session. |
Another result of the audience
response survey taken on Sunday showed that 78%
of attendees felt that the best approach to communication
between trading partners was through implementing
standards. Boyle added that “this is a no
brainer.” Delayat added that SCOR was “part
of that 78%.” When
surveyed, 54% of attendees viewed technology
as a strategic solution rather than a competitive
advantage or cost of doing business. “Absolutely…it
has to be a strategic business solution,”
agreed Kellington. Boyle added that some things
are still a cost of doing business, such as the
new regulations of Sarbanes Oxley, adding that
“you have a choice, do it or go to jail.”
To be seen as a center of value, not only a center
of cost, said Delayat, IT has to earn the trust
of the business, and that is the CIO’s
job.
When it came to being a technology
first mover versus an early adopter or fast follower,
most panelists characterized themselves as early
adopters. “You don’t want to be on
the bleeding edge, too much pain,” Chartrand
stated. He also emphasized that the industry
needs to look outside itself for innovation.
Boyle saw Odyssey Re as occupying a sweet spot
between early adopter and fast follower.
The session concluded with
Gregory Maciag and Thomas Donaldson, president
and CEO, LOMA thanking the attendees for coming
to this first joint conference and reminding
the audience that next year, the event would
be held in Orlando, Florida.
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