Staying the Course
One of the biggest difficulties with the merger planning has been the need to ensure the project did not detract attention from other priorities of the businesses. Issa says it proved important to get everyone lined up behind the effort by telling them that within 12 months time, if the work proceeded well, the organisation would have fundamentally changed and would be extracting major benefits.
"You've got to focus people on what the big things are, and try to deal with as many of the smaller business-as-usual things as you can, but don't let them override the big things that you're trying to achieve," he says. "It's easy to say, but difficult to do, because at the high level you can agree, but as you get down within different levels of the organisation, and there's people at the front line performing their day-to-day functions, they basically don't want to stop doing what they normally do just because you're doing these big integration tasks.
"The way I approached it was to get the executive buy-in at the executive team level."
Indeed Issa says he only accepted the appointment as IAG CIO because he knew he would sit at the executive table. All roads lead to some sort of technology change, he argues, and a CIO who does not sit at the executive table will struggle to make his or her voice heard.
The other key to the progress so far has been the adoption of a top-down approach designed to ensure the big things were done first. Now, Issa says he will judge the success of the work in part by whether the organisation does indeed gain the desired synergies from the merger, and whether the business benefits are flowing on to customers.
But he says there are also two other planks of the work under way in his area which need to be simultaneously progressed. The first is the huge task of insourcing IT from IBM GSA. When IAG took over CGU, CGU was running all IT in-house, while IAG had an outsourced operation. Yet Issa says even though CGU was roughly one-third the size of IAG, it was achieving better service levels at a better cost. He says although the decision to outsource to IBM four years ago was probably the right one for the time, IAG is now at a different stage of the business cycle.
"I think that with the outsourcing experience gained over the last four or five years, people have re-evaluated the outcomes versus what was perceived as being the outcomes when people first went into those things," he says. In making the decision one of the key risk management factors in Issa's mind was the fact that IAG, which is based in Sydney, already had the infrastructure capability in Melbourne to allow that move back in-house.
A second major initiative involves the building of a new, far more flexible front end for the direct sales force.
Issa says the main driver of all the work is the belief that by getting bigger, IAG is making it possible to build up scale and hence reduce costs, which can be passed back to customers through savings in insurance product costs. The idea is to create a virtuous loop which will consistently deliver benefits.
"What that means is that if you can get bigger and get scale in your operation, and reduce the cost of the way that you deliver the product - in this case insurance to the customer - you need to pass some of those savings on to the customer, and on to the way you price insurance for the customer. That way you can grow your customer business more, which gives you more scale. So unless you're giving something back, then you're basically going to get to a point where customers are going to say: 'Well there's nothing coming back to us in all this'," he says.
Issa is dedicated to transforming fundamentally what was until it demutualised a fairly staid organisation, and says he is happy to put his job on the line for the effort. "I've committed to delivering that, and making the department of technology services a better place for people to work because they're actually at the front line of what is happening in technology and working very closely with the business to deliver it," he says.
"Yes, my reputation is very much at stake, but I'm having fun, and I think that's the main thing - making a difference - which is what I get up in the mornings and come to work for."
SIDEBAR: The Single Customer View at IAG
Deliver tools to provide a single customer view for all exiting general insurance by June 2004.
Provide uniform source of customer interaction information.
Integrate with all sales and distribution channels, product, fulfilment systems and claims processing.
Ensure customer experience is consistent.
Use existing customer information without duplicating information request.
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