by Elizabeth M. Ferrarini

Who would think that TV commercials featuring the antics of a wisecracking duck could improve a company's brand recognition by 90 percent? That's what a few quacks did for Aflac, a Fortune 500 disability insurance company. Now, Aflac associates have no trouble getting accepted into new business accounts. The payoff has meant a 15 percent annual growth rate since 2003, and there's no end in sight. Aflac does about $14.4 billion in revenues annually, has about 6,100 employees, and insures about 40 million people in North America and Japan.

Of course, Aflac isn't resting on Nielsen ratings from the TV commercials to stay competitive. Accelerating growth continues to drive IT to find ways key departments can provide better value and services to external customers. In fact, Aflac received the 2005 CIO 100 Award from CIO magazine for several  projects, and was named to Information Week's 2003 list of the Nation's  Leading IT Innovators.

Enterpriseleadership.org recently sat down with Gerard Shields, who became CIO of U.S. Aflac operations in 2005, to discuss how IT has been coping with the company's growth. He has responsibility for applications support and delivery, and the data and telecom infrastructure, as well as desktops. His staff consists of about 500 employees and 150 contractors

EL: What's your strategy for IT?

GS: My strategy is for IT to be perceived by internal customers as a partner that empowers them to be successful. In other words, I want the senior vice president of the call center to see my staff as one of her greatest resources. Likewise, I want the vice president of claims to say we have great satisfaction from our policyholders because of our partnership with IT. We have to be more aggressive in helping the business units, and we have to build an agile and responsive organization that can help the business units.

EL: How have you kept regulatory compliance issues from burdening your  customer?

GS: Insurance has always been a highly regulated industry. We've always managed a lot of regulations, including Sarbanes-Oxley and HIPPA. It's never been burdensome; we view compliance as a prudent way to do business. In fact, during our recent Sarbanes-Oxley review, our external auditors commented that our configuration management was leading edge.

EL: What best practices do you use for IT?

GS: We have a couple of people who are Black-Belt certified in Six Sigma, and we use Six Sigma for some projects. Our primary best practice is the Capability Maturity Model (CMM), which came out of the Carnegie Mellon Institute and the Software Engineering Institute about 20 years ago. CMM assesses the probable success of your application and support levels. We're one of two insurance companies in the world with Level 3 CMM certification. That's the highest rating you can get.

EL: Your predecessor, Jim Lester, developed a sales automation tool called  SmartApp. Are you still using it?

GS: Jim used to own the company that developed SmartApp. We bought the company and made Jim CIO in the mid 1990s. Today, more than 90 percent of our business comes in electronically through SmartApp. You could say it is ingrained in the way we do business. It's a tool we use every day.

EL: How is IT making the business more competitive?

GS: My internal customers will tell you the value of their partnerships with IT. We have account managers or account directors who live with the business units, and they look for innovative ways to solve their customers’ technical problems.

IT is comprised of business people who are in the business of applying technology. We try to do everything we can to reduce the cost of processing claims. These initiatives can range from using technology to lower the average talk time for claims representatives, to being able to hook into our customers' payroll and benefits portals.

EL: Have you carried out any cutting programs?

GS: We haven't carried out any corporate mandated cost cutting programs. Our biggest issue includes how to handle our tremendous growth and volume, but I truly believe in managing our costs and being good stewards of our resources. I have internal goals to self-fund a certain amount of our projects, and we've renegotiated some contracts and consolidated servers and databases to reduce some costs.

EL: You have a very structured governance program. Can you describe how it  works?

GS: Governance is really more about organizational culture than process and rules. It has taken several years to meld it into our culture and then refine it. A U.S. steering committee, made up of various department heads, oversees projects.

The committee uses a gated process for evaluating projects and controlling the costs. If the project is less than $5,000, either the chief administrator or I can approve or reject the project. If the project is more than $5,000, it goes through a series of gates. For example, the first gate asks you to define the requirements for the project you want funded. The second gate looks at the benefits to the company, the payback, and the cost of the project. The third gate evaluates the design. Because we're a regulated industry, some of our projects won't have a payback, but these three gates allow you to refine things. Once you get beyond the third gate, you either get a "go" or "no-go" decision.

EL: You belong to a CIO forum in Atlanta. How does this organization help  you in your job?

GS: In December 2005, I participated in a CIO Executive Summit in Atlanta. Several CIOs came from stellar companies such as Home Depot and Cocoa Cola. As I listened to my brilliant peers discuss some of the things they were struggling with, I realized that I wasn't alone. We all have similar problems. You might say misery loves company.

EL: What strategic role does your vendor management office serve?

GS: Our vendor management office (VOM) is critical to our IT operation. The VOM brings continuity and standardization. In any given day, we have to manage 150 different contractors. Several times, we had up to 230 contractors a day. Our VOM enables us to get better vendor pricing and to deal with a smaller number of companies. The VOM plays a key role in handling all of the logistics of dealing with hardware and software companies. For example, the VOM keeps track of all the maintenance agreements from our 75 software vendors. Our engineers and managers make buying decisions based on the research the VOM filters from industry analyst firm such as Gartner Group and Meta.

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Elizabeth M.  Ferrarini is a free-lance technology writer and IT consultant from  Boston, Massachusetts.