Get the dollars in first and then invest in IT

Three years ago, a new management headed by CEO Ooi Say Teng was brought into Uni.Asia Life Assurance, a Malaysian insurance company. The company has seen a complete turnaround, and IT systems, says Teng, have a played a critical role in this change. Deepali Gupta has the details

What was the need to revamp the IT infrastructure and how did you go about the process?

Earlier my branch staff reported that clients had to wait half-an-hour for a receipt. Since financial services are in direct competition with banks where everything is in real-time and online, it was essential to revamp the IT infrastructure. Plus, every month the earlier system had a downtime of three-days. It was embarrassing that when we talked of business, we only talked about our problems.

Employee morale was down, and, from a user’s perspective the system only slowed things down. We were reprimanded by agents and policy-holders alike, while the IT team wasn’t willing to shoulder responsibility. We had to gain trust. We gradually gave the user a system that functioned the way it was supposed to. Users believed that the system was there to help them. We then put an audit system in place. The key was that we promised only what we were capable of delivering.

IT is a business driver, and the delivery of a suitable IT infrastructure proved to be a business enabler. After putting the new infrastructure in place, the number of new cases at Uni.Asia grew by 100 percent in the first year, the amount of premium collection grew by 200 percent, and we increased the employee headcount by 15. This year we expect to grow our business by 30 percent.

We can now issue policies within three days, so customer expectation and service levels are never compromised. We can attribute that to our IT infrastructure.

How did you approach your IT investments?

We have multiple distribution channels with a focus on life insurance products. In Malaysia, we offer life and health insurance. About three years ago, we got a new management in place that reformulated the distribution strategy adopting multiple channels. Life insurance makes financial sense in the long-term as it takes up to seven years just to break even.

From an IT perspective that meant we had to create a long-term strategy. However, shareholders finance every stage of business development. If you approach shareholders and ask for IT investment, the reaction is bound to be unpleasant. So the safe approach is to just get the dollars in first and then invest in IT.

This approach may be suicidal because once the business grows the distributor and consumer will not compromise on quality or service. Therefore the company gets caught in a situation where business is growing but the infrastructure does not scale up to match this growth. It would lose both customers and intermediaries.

We decided to make IT our core strategic agenda. The IT Manager reported to the CFO under the old structure, so the first decision was to appoint a CIO who would report directly to the CEO.

Did you buy new solutions as soon as you decided to revamp the company’s IT strategy?

No. Mastek evaluated whether the system in place had a future. It came to the conclusion that the problems were occurring due to poor initial implementation. So, only that needed to be rectified, and the system worked well.

What kind of priority do you give to IT decisions?

Even in our high-level committee meetings, IT investment is a major point of discussion. In these meetings we look at the current IT infrastructure, and visualise what the future, given the present situation, will be. If there is no clear future, it is time to get a new system.

Once you decided to redo the company’s image, what were the guiding factors while taking IT decisions?

IT, for me, is not about the solution on the front or the backend. The CIO will figure out technical aspects. However, the technology must not be obsolete because employees, particularly new recruits, need to be capable of using it.

When establishing IT partners there are two very important considerations for a CEO: The first is whether or not the vendor can feel my pain, and the second is to see if the partner shares my vision. I assess these factors personally in monthly meetings. As for the technical competency of the vendor is concerned, my CIO takes care of that.

Naturally, all this cannot be assessed from day one. The business has to develop a relationship with the vendor over time. Like we did with Mastek, you first have to draw a road map. Then establish a rapport so that at the time of trouble no one tells you that fixing the problem is not part of the contract or says that I should have asked for the service earlier.

So, I made my big goal clear and said, I will not compromise on schedule, costs, and over a period of time rolled out many projects. As a result, I have built a trust-based relationship. Now I am comfortable that help is only a phone call away.

As business grows, your IT infrastructure will have to scale to a corresponding size. Do you have an expansion plan for IT chalked out?

We have developed a modular approach because we are a young company. We bought a full range of products, and expect the solutions to grow with the business. We introduced health insurance in March, and will continue to add services. For me what’s important is my ability to deliver what I promise to customers, and my ability to introduce new products quickly. That is a priority, upgrades are incidental and a means to mitigate risk.

Deepali Gupta can be reached at deepali@networkmagazineindia.com