by Elizabeth M. Ferrarini

The CIO role at organizations with more than a $1 billion in annual revenues has changed. That's the finding in Ellen Kitzis's, book, The New CIO  Leader. A group vice president at Gartner's Executive Programs -- a membership-only program for more than 2,000 CIOs -- Kitzis says that many large corporations have one corporate CIO, who is responsible for the overall strategic direction of IT, and dozens of other CIOs, who are responsible for keeping systems up and running. However, that CIO model doesn't quite fit The Hartford Financial Services Group, one of the largest and the oldest financial investment and insurance companies based in the U.S.

With annual revenues of $2.3 billion, The Hartford has a corporate CIO and senior vice president (Ken Auman) and five regional CIOs, each directly aligned with a specific business division. Together, this team of six IT senior executives oversees the leadership of 1,800 IT professionals. The role of a divisional CIO at The Hartford, however, can make or break how competitive a division's product will be in the marketplace.

Andrew MacDonald functions as the CIO for the personal lines division, overseeing a staff of 250 IT professionals and about 150 contractors, depending on the projects at hand. He, along with the other divisional four CIOs, reports directly to Auman and indirectly to the president of the personal lines division. MacDonald's role does consist of developing and maintaining systems support of the personal lines operation. Moreover, his role has two strategy components: ensuring that the IT team can provide products and solutions to meet the division's ongoing needs, and providing defined business value through key investments to meet future needs. Prior to joining The Hartford in 2002, MacDonald worked as a vice president for strategic alliances for a worldwide product vendor, where he gained experience delivering complementary products to support the mission of international organizations.

Enterpriseleadership.org recently spoke with Andrew MacDonald about his role  as a divisional CIO. Here's what he had to say:

EL: What does your governance model look like?

AM: The company has several governance boards -- one board covers the needs of the property and casualty business, and the second board governs all of the business strategies. The latter looks at how we're going to drive business value for The Hartford. A portfolio management team governs corporate business strategy execution within each division.

EL: At a recent Computer Science Corp. conference, you told the audience they need to take a hint from the fast-food industry and adopt a pilot approach to developing new products. Can you talk a little more about this concept?

AM: Traditionally, the insurance business has not taken advantage of IT. That attitude has started to change. We're now seeing a lot of new players getting their products faster to market than some well-established companies.

At the conference, we talked about how companies can approach new ways of doing business by deploying IT systems. For example, the fast food industry tends to identify a market, tests the product in a specific market, and then decides if the test results justify rolling out the product to other markets. We also tend to identify pilot opportunities, test the market with the new product, and weigh our market share opportunities. We use new techniques, such as speed to market, to gauge their effectiveness. For example, the configurable engines in our rating systems and our underwriting systems enable us to make product changes very quickly.

EL: Computer Sciences Corp. is a big Six Sigma company. What kinds of  best practices do you use at The Hartford?

AM: Many years ago, we started using Six Sigma methods to make business operations more efficient. The large-call customers that support our customers have benefited greatly from Six Sigma.

We've started to look at how IT can leverage Six Sigma alongside of our mainstay best practice, Capacity Maturity Model Integration (CMMI). These two best practices can help us to measure our IT transformation and to help us make better use our of IT talent across the five divisions.

We use CMMI to measure the effectiveness of our applications development process. We also use the IT Infrastructure Library in support of our actual products.

We recently created a shared service that is deploying both CCMI and ITIL across our five divisions. This shared service enables my group to focus on the applications suite used in the personal lines division.

EL: You mentioned an IT transformation at The Hartford. Can you go  into more details about this?

AM: We began this transformation in 2003 to look at how well we get things done. We needed to drive more capabilities into IT. Where it made sense, we decided to leverage outsourcing to maintain some of our legacy applications. This structure has enabled us to have our talented IT people work on new products.

EL: How is the transformation helping to drive cost out of  IT?

AM: Each division's portfolio management group is helping its respective IT organization make better business decisions. For example, we want to create full transparency about where we spend our money. This goes for both on-going maintenance and the investment in new products. What does and what doesn't provide a competitive advantage to The Hartford are important business decisions. That's the whole idea behind the transformation. The process has created a much-needed dialog between IT and the divisions. It has allowed that transparency to be leveraged.

EL: Do you have any CIO rotation program going on where you spend  some time running a business unit?

AM: No, we don't have any such rotation program. The model is to have each CIO linked to the respective divisional organization. We try to sit with the division folks, attend their leadership meetings, as well as meetings with the corporate CIO and the president.

EL: As part of the transformation, what types of IT talented are you  seeking?

AM: We're focused on how we can hire the best talent possible and to continue to nurture talented professionals. We're hiring a lot of MBAs to be business analysts. We're also looking for professionals in project management and software architecture. We're heavily developing both of these areas.

EL: What is the role of business intelligence in your  organization?

AM: We're tracking other IT shops to determine what capabilities they have to support their business units. Specifically, we want to look at how some of our competitors are leveraging IT to deploy new solutions. We're constantly looking around to see if they are using best practices or are there better things we should be doing.

--

Elizabeth M. Ferrarini is a freelance technology writer and  IT consultant from Boston, Massachusetts. Reach her at elizabethferrarini@yahoo.com.