CIO of Quinn Insurance Niall Marshall views IT as a strategic enabler, critical to shaping overall business processes, and an area that companies should continue to invest in right now. He talks to GORDON SMITH.
When the time came to make the case for maintaining the level of IT investment in the teeth of the worst economic downturn in decades, Niall Marshall didn’t have to resort to begging or pleading with the board of directors. He made his case simply and the senior management agreed readily. “It wasn’t a tough fight to maintain the budget,” he recalls with some satisfaction.
Conventional wisdom has it that companies should cut costs in the face of recession – with IT among the first to suffer – but the episode aptly illustrates the different way of thinking at Quinn Insurance, where IT is treated as a valued contributor to the business, rather than just a cost. Marshall, the firm’s head of IT, doesn’t disclose the overall budget figure for obvious competitive reasons, but he confirms the amount has remained the same as last year.
“I think a lot of companies would be tempted to significantly reduce their IT budget. But if they take it too far, while they might make cost savings in the short term, in the long term they’ll miss opportunities and maybe drop the momentum of IT. So, it could take excessive time for them to catch up again,” says Marshall. “In my experience, the best-performing companies continue to invest in new initiatives during a recession so that when it is over, they can go to market with new offers.”
That enlightened attitude to IT may be partly due to the company’s relative youth. Now the second-largest insurance operator in the country, Quinn Insurance was formed as recently as 1996. It provides general insurance products, including private and commercial motor insurance, motorcycle insurance and home insurance in the Irish and UK markets.
“The business executives have a good appreciation for IT. They’re obviously IT literate themselves. The fact that it is a young company – the average age is probably less than 30 – probably helps to give that openness towards IT,” Marshall suggests.
“IT is not just seen as a support function. Within Quinn Insurance, there’s a strong view that it’s much more than that – it’s a strategic enabler that can come up with game-changing ideas for the company.”
According to Marshall, the vast majority of the insurer’s revenue is generated through its call centre and website, which has meant a heavy investment in technology since the company’s inception.
“It’s a fast-moving company and requires IT to deliver against aggressive deadlines,” he explains. “Over the past year, we’ve had to deliver and support IT infrastructure serving two large new offices in Cork and Navan. We also have one of the most aggressive application release cycles in the industry, with an average release frequency of six weeks. That means IT is always under pressure to deliver for the business.”
Ironically, the level of demand on Marshall’s IT department has increased during the downturn.
“We have added new offices, improved our product offerings, implemented efficiency projects and added new systems. In 2007 we defined a three-year IT strategy and are continuing with the implementation of that in 2009. We plan to revamp our website to improve its usability, features and look and feel. We constantly strive to make our internet site simpler and quicker for end users so that they become our customers.”
Marshall leads a team of 130 IT staff, and there are an additional 50 people in application development roles answering to various business areas within the company. This group serves a user population of 2,500 people. “For the size of company, it’s probably about right,” he reckons. The users are dispersed across seven sites in Ireland and the UK, all connected on a 100Mbps-wide area network. Each site conforms to a state-of-the-art data centre blueprint and each has dual data centres for added resilience.
Over the past three years, the company has targeted IT investment at critical business processes – it upgraded its network and telecoms infrastructure to achieve greater resilience and capacity; expanded its product offering on the internet and integrated with UK insurance aggregators; and deployed a new claims management system to achieve greater efficiencies and quality control.
Quinn’s key applications include policy administration, internet quoting and inception, claims management, financial management, documentation generation and management applications, a data warehouse, a management information systems reporting application, as well as two CRM applications. The core applications systems predominantly run on an IBM iSeries platform using two physical servers located at separate sites. These servers operate as virtual platforms using logical partitioning and cluster management. High availability is provided by data replication between the primary and contingency servers. This way, Marshall’s IT team can provide in excess of 99.99pc system uptime for the core applications, while allowing for fast disaster recovery should it ever be needed.
Being part of such a fast-growing company can bring its own challenges. A dramatic growth in quoting volumes over the years meant the insurer was continuously faced with infrastructure capacity risks. In mid-2007 the company performed a five-year capacity planning exercise for its iSeries infrastructure and undertook a major infrastructure upgrade. “That has given us plenty of headroom and allowed us to focus on other developmental projects without having to constantly firefight to increase capacity. We achieved that upgrade without any redesign of applications,” adds Marshall.
There was an additional business benefit from all these changes. The company’s SQL Server data warehouse was also nearing capacity, which had led to user frustration around the provision of management information systems (MIS) reports, which were constantly late and consequently not up-to-date when they did arrive. His team migrated the data warehouse to a Teradata platform and now MIS reports are delivered to users’ mailboxes daily, using data as recent as the previous evening’s entries.
“Users also have the facility to generate ad hoc MIS reports at any time. This project has transformed the provision of MIS services to the company,” says Marshall.
Last year, a major programme to migrate to a new claims management system got under way. This will provide the company with more flexibility, better workflow management and will make claims handling processes more efficient. That system has been rolled out to Quinn’s private motor claims management teams and is currently being configured to handle commercial and household claims.
Mixing and matching
Marshall takes a mixed approach to IT provision, with some tasks such as third-level support of its LAN, telecoms and perimeter infrastructure outsourced to third-party providers.
“We have strong internal teams to provide second-level support and outsourcing third-level support has been cost effective for us as the IT infrastructure has grown in complexity over the years,” he explains. “Our own staff are learning from these vendors and that is helping them move up the value chain.”
The company also outsources a large portion of application development to a small number of external vendors. When combined with internal resources, this allows Quinn Insurance to bring products to market faster, which is crucial in a competitive sector like insurance. What’s more, it’s a flexible way of managing resourcing demands for application delivery. “This approach has worked well for us – a key reason for this is that we have developed win-win, long-term relationships with these vendors,” says Marshall.
Over the next couple of years, Marshall plans to take back more presentation-layer development in-house for the company’s call centre and internet applications, so that it can more quickly facilitate its own marketing initiatives.
To date, Quinn Insurance has not adopted cloud computing or software as a service (SaaS) to any great extent, but Marshall says he is open to the idea. “Part of our private motor internet quick quoting process uses cloud-based processing. The rest of our application processing is handled in-house,” he points out. “Our key goals are speed-to-market and high availability and as long as we can adhere to our information security policies we would consider cloud-based computing and SaaS.”
Quinn Insurance has given itself a three-to-five-year timeframe to implement a service-oriented architecture (SOA), aimed at increasing its speed to market and facilitating better customer relationship management. “That architecture will also deliver new customer channels such as web chat and click-to-call, and allow greater business process flexibility,” says Marshall.
The concept is that Quinn’s call centres will become contact centres, able to respond to customers in a flexible way and to interact with them in a multitude of channels regardless of the original means of contact.
“We can use this architecture to give us a single view of the customer, in terms of allowing the contact centres to be able to see what live quotes there are for that customer, what products they’re using and other key insurance characteristics they possess. They should help us offer them bundled insurance products so they get a better deal,” adds Marshall.
The ability to re-use code is one of SOA’s attractions, since it reduces the cost of developing applications. Marshall’s budget may remain the same, but he says that’s no reason to ignore efficiencies wherever they can be found.
“Yes we’re focused on cost and IT is no different but IT departments need to convince business to keep investing in new initiatives,” he points out. Instead of cutting the topline figure, Marshall has opted to negotiate more aggressive deals with vendors and has also embarked on a significant virtualisation project, which he says will deliver reduced IT running costs. As a result of this initiative, Quinn Insurance now runs close to 200 of its Windows servers on 25 physical machines. The company’s website runs on clustered Java application servers.
“Over the last six months, we have virtualised the majority of our domain controllers and print servers. The failover and disaster recovery environments for some of our secondary applications are virtualised,” adds Marshall. “We have invested recently in a large distributed enterprise storage solution that leverages virtualisation technology.” Once implemented, this will give the company 100pc uptime for key file servers and greatly improve its Windows server disaster recovery capabilities.
“Core applications and email services run on different logical partitions on our iSeries servers. We also use different logical partitions to provide development and test environments for iSeries-hosted business applications. This allows us to run multiple operating systems simultaneously and to dynamically provision system resources in production on an as-needs basis,” says Marshall.
Elevating service levels
Another significant programme has been to automate back-office processes like document management, improving service levels compared with the previous manual way of processing forms and significantly reducing the costs of doing so. Marshall is especially proud of this project.
“We exceeded our target KPIs [key performance indicators] for this,” he says. Quinn Insurance has a strong KPI culture and every department, IT included, must report against certain metrics on a weekly basis.
If all of that seems like an unenviable workload, Marshall seems to take it in his stride. “Whilst IT is constantly evolving, at this point a lot of that change has been successfully handled and will allow me to spend more time on the strategy and the business.”
This year, his goal is to spend more time with business leaders to understand their issues and processes and look for opportunities to use IT to improve them, he says.
“The best CIOs set aside sufficient time to work at the strategic level, rather than working exclusively at the operational level. CIOs must be business-oriented. They must be tuned in to business objectives and issues and ensure that IT is doing all it can to help business leaders. They must ensure that the IT strategy is built around the business strategy and that IT projects are focused on achieving fundamental business goals such as revenue generation, reducing process times and reducing company risk,” he concludes.
By Gordon Smith
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