Managing New Technology Realities

Managing new
technology realities
An Economist Intelligence Unit report sponsored by SAPPreface
Managing new technology realities is an Economist Intelligence Unit report sponsored by SAP. The Economist Intelligence Unit's editorial team conducted the interviews and wrote the report. The findings and views expressed in this report do not necessarily reflect the views of the sponsor. Dan Armstrong was the editor of the report. Our thanks are due to the interviewees for their time and insights.
January 2008Managing new technology realities
Managing new technology realities
s in other sectors of the financial "There's huge pressure for automation, services industry, insurers are feeling the need to move from a silo view of operations and that ultimately means pressure Acentered along business lines to a seamless to manage expenses. Profitability enterprise processing environment. This shift begins with leveraging corporate functions (HR, finance, is becoming a huge driver in the legal and audit) as shared services, followed by an insurance business."enterprise-wide focus on customer servicing and product offerings. Oliver Bussmann, CIO, AZOA Speaking from over 15 years of IT management experience in financial services, Oliver Bussmann, CIO of Allianz of America (AZOA, a business unit of Munich-based Allianz SE), sees this pattern transforming the insurance industry just as a similar Co. of North America life and annuities carrier, to trend drove the evolution of the banking, securities which AZOA recently extended its infrastructure and asset management sectors over the last decade. and network management engagements. Those "There's huge pressure for automation, and that enterprise support elements are part of a broader means ultimately pressure to manage expenses," Mr management and technological change joining Bussmann comments. "Profitability is becoming a the P&C and life insurance units within a single huge driver in the insurance business." enterprise embrace, based on services-oriented At AZOA, the trend has manifested itself through architecture (SOA).intensive investment in IT, with special emphasis on "We are establishing an enterprise architecture application development: 50 percent of the firm's team for both P&C and life as a shared service IT budget is dedicated to applications, compared because we see those businesses coming together to an industry average of about 25 to 30 percent. more from a policyholder perspective over the next AZOA's budgetary priorities reflect an ongoing few years," Mr Bussmann explains. "Right now the transformation effort, begun in 2005, that includes focus is more on things such as finance and HR both outsourcing of infrastructure and network through our ERP system, and things like document management and implementations of claims, and workflow management."underwriting, policy administration, workflow, Success in such cross-enterprise transformational document management and enterprise resource efforts have tended to elude the grasp of insurers planning (ERP) systems. with the more modest goal of uniting lines of Having begun at AZOA's North American P&C business within a P&C or life insurance enterprise. subsidiary Fireman's Fund Insurance Co., the effort Too often, insurers have attempted too much at has come to comprise AZOA's Allianz Life Insurance once, according to Jonathan Bobalik, director of
© The Economist Intelligence Unit Limited 2008 3Managing new technology realities
Americas business unit for insurance. "Trying to a unified architecture that allows insurers to exploit drastically change one's entire technology footprint new technologies as they become viable. is a recipe that has not met with much success," he Service-oriented architecture (SOA) initiatives remarks. for their own sake are subject to the same pitfalls as other large-scale projects. But when mated to long-term architectural planning and governance, "The worst thing that can happen to an SOA can provide a framework that will enable the IT landscape is if one repeatedly resorts exchange of new functional components without the same risks and downstream effects of 'rip-and-to 'rip-and-replace.'" replace,' Mr Bobalik says. "One of the things that SOA should be able to provide is the abstraction of Jonathan Bobalik, director, SAP America the user experience from co... [download for more]