Menu
Menu
Learning From Disaster | Part Two - Transparently Obvious

Learning From Disaster | Part Two - Transparently Obvious

Months before Enron declared bankruptcy an unidentified employee sent the company's top executive an unequivocal message.

Follow the Financials

The first integration task for MetLife was getting its financial house in order. That fell to Peggy Fechtmann, senior vice president, CIO of corporate systems and chief e-business officer. Even after the IPO in April 2000, its financial processes and systems remained siloed. Different subsidiaries sent financial information to MetLife's Florida-based comptroller in different ways - by FedEx, mail or e-mail - making it largely a manual job to close the books each quarter. "It's comical in hindsight, but it certainly wasn't comical then," Fechtmann says.

Her first step toward standardising and integrating financial systems was to form a steering committee of IT executives and subsidiary business partners to discuss the financial processes of MetLife and its subsidiaries. They knew they needed general ledger, accounts payable and asset management capabilities, and they planned to go with packaged software. They looked at Oracle, PeopleSoft and SAP before choosing PeopleSoft. "There was an exhaustive analysis, but there was a slight bias toward PeopleSoft because Met had implemented PeopleSoft for HR in 1995," explains Fechtmann. MetLife committed $US80 million over two years for PeopleSoft's Enterprise Profitability Management (EPM) package.

Next, Fechtmann created a rollout plan. First was the MetLife company, or Mother Met as Fechtmann calls it, which was converted in April. Several smaller subsidiaries moved over in May, and several midsize subsidiaries, such as MetLife Securities, in June. MetLife Auto and Home is slated for the third quarter. After that come the larger acquisitions - New England Financial and General American Financial - in the fourth quarter, where there is sure to be a "fair amount of pain", says Fechtmann.

After the vendor, rollout and customisation choices came the hard part. Every Thursday, Fechtmann flew to Florida to foster a close working relationship with her business partner, MetLife's comptroller, and representatives from Met's subsidiaries. "There would be painful meetings where we would do account mapping," Fechtmann, a former accountant, recalls with a grimace. "New England Financial's comptroller would say: Â'We have 500 general ledger accounts, and this is how we normally post our stuff.' MetLife's comptroller would say: Â'Well, we do it this way.'" The IT governance board came to the consensus that decisions such as those would be made based on the greatest overall benefit, rather than simply going the MetLife way. "We weren't going to say: Â'Well, this is the way we do it, and you have to comply'," says Fechtmann. "So we went account by account and figured out how we were going to do it. [We] really had to re-engineer the business processes. [We] were really trying to define a new model of how to do business."

The process was tedious and troublesome. "You run into both business process angst and, quite frankly, cultural angst," Fechtmann explains. "Old habits die hard. People say: Â'Well, this is the way we've always done it', and change can be difficult."

Still, MetLife and most of its subsidiaries have made the transition to the PeopleSoft EPM system and have begun to trust the numbers it generates. The next step is encouraging business partners to use it for financial analysis and business planning.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about ACTAdaytumBIASBillionDeloitte Touche TohmatsuDeloitte Touche TohmatsuEnronFedExForrester ResearchGartnerHISMeta GroupMetlifeOraclePeopleSoftPLUSSAP AustraliaSecurities and Exchange CommissionWebster

Show Comments
Computerworld
ARN
Techworld
CMO