Starting IT afresh
- 18 October, 2010 12:00
If your role involves managing IT within an organisation, starting a new job often means inheriting a hodgepodge of other people’s decisions strung together across generations of technology. The alternative is to join a start-up, but rarely does a start-up match the resources and budget that are afforded to IT in large existing organisations.
So what if you could start from scratch without disrupting the business that you service?
That was essentially the challenge laid out to Jacki Johnson when she was appointed to create a new Web-only brand with Insurance Australia Group. IAG chairman, James Strong, slid her a blank piece of paper across the table and asked what would she do to attract new groups of consumers through a different brand.
“Large corporations can get to a point where their dominant logic really takes over, and it can be quite risky to try out new technologies and risk blowing up parts of the business,” Johnson says.
It was May 2008 when Johnson took on the challenge. Over the following months she assembled a team and created a proposal that received board signoff in September that year. By May 2009 the new venture — dubbed The Buzz Insurance — was up and running. Johnson had the best of both worlds when creating The Buzz: The freedom to make her own decisions regarding technology, and the capability to call on the resources of IAG’s corporate IT and infrastructure services for functions such as business continuity, testing, firewalls and so on.
“IAG’s infrastructure team have been a breath of fresh air to us, because we’ve taught them to engage with us in a very different way, and they have solved some amazing issues to be able to support the business,” Johnson says. “And the stability of the technology comes a lot from the infrastructure more than what we’ve put on the front end. If we were a true start-up, to do that so quickly would have been very costly and very difficult.”
The Buzz also accesses IAG’s comprehensive general insurance system, receiving a single view on policy and claims. But it has built its own service layers, which enable The Buzz to make changes quickly, and the site does not have to be pulled down to enact maintenance. The layers also provide interfaces to consumers and partners in the outside world through the website.
“The interfaces were important, which is why the services layer was very important for us; to really plug different pieces in and be able to unplug them if they weren’t working, which hadn’t tended to be done in our organisation before,” Johnson says. In other instances The Buzz hosts its functionality elsewhere, such as its online chat service, which is hosted in the cloud. Johnson is currently evaluating other cloud services, and this emphasis on outsourcing enables the organisation to stay lean. She says The Buzz employs only 23 full time equivalents, but utilises a lot of partners. “We outsource a lot of development — we don’t do it in-house, because the expertise within IAG is around the infrastructure and we have brought in external firms to do the development.”
The Buzz has also opted for a test-driven environment where testing and development happen in parallel.
“It’s allowed us to get stronger quality build, faster than anything we’ve ever done before.”
As part of the planning for The Buzz, Johnson visited Silicon Valley venture capital investors and companies such as eBay. She was keen to learn what it meant to be an Internet company, rather than a traditional company that used Web distribution channels, as IAG is.
“People try to put their original value chain online, and what we found from the consumers is they actually have a lot of other issues that the technology enables you to resolve in a different way.” It also strengthened her arguments for the company’s directors.
“I met with venture capitalists because the thing I wanted to talk about with the IAG board was that they were going to have to think like venture capitalists, because all of the portfolio tools that you would use to evaluate a large ‘business as usual’ are very different to a start-up.”
The Buzz also engaged with would-be policyholders throughout its build phase, through a Web portal it called myinsuraneideas.com.au.
“We had about 4000 people come and co-create with us,” Johnson says. “They weren’t benchmarking us along with the other insurers or banks — they were talking about things like rosesonly.com.au, Amazon and eBay. They started to talk about the internet experience rather than the insurance experience.
“And one thing that became an emerging theme throughout the chats was a passionate discussion about companies who try to be internet companies but are just using traditional models.”
For The Buzz, this was apparent in response to its ‘click to call’ system, which dumped consumers into the same IVR system they would expect from any insurance company. That led The Buzz to implement online chat to provide an immediate response to consumers.
Johnson says adding chat has delivered the benefit that communication can be more easily monitored, which also pleases the regulators. But it also means that The Buzz can perform more in-depth analysis on the sessions.
“You are able to triage and ask ‘was that customer really happy, or have we got someone who isn’t all that happy’,” Johnson says. “So the technology has enabled us to do things that we wouldn’t normally have been able to do in business.”
The Buzz continues to engage with consumers online as it builds its next product, as well as assisting with its communities strategy, call The Buzz Exchange. The company has already set up the micro-communities, ‘Buzz Mums’ and ‘Parents with Ps’ to share ideas with consumers in both groups.
After its first year Johnson says The Buzz is running ahead of predicted client sign-up rates and below costs, while also outperforming global benchmarks in terms of staff performance and customer satisfaction. “It just shows what’s possible when you innovate,” Johnson says.