Friday, August 15, 2008

More CIOs are implementing IT strategies

By Catherine Williams, Special to Mass High Tech

Like any good code developers, Jeanne Lieb and her team are enhancing the software they built for generating insurance risk profiles. The system crunches data relating to building construction standards, sprinkler system specifications and the frequency of natural hazards like windstorms so customers can get a handle on how vulnerable, or how safe, their properties are.

But Lieb doesn’t head a product development group at a software company. She is senior vice president of information services at Rhode Island-based commercial property insurance provider FM Global.

“We’ve long understood the role of technology in the effective management of data in our core business processes,” said Lieb.

Technology-driven innovation is not just for technology companies anymore. Service industries across New England are looking to their information system organizations to construct business strategy and push product development.
George Westerman, research scientist at the MIT Sloan Center for Information Systems Research, said companies hold a competitive advantage if they use the “tremendous resource” of their IT organizations.

“The consequences of leaving IT in the back of the room is (that) your competitors will figure it out before you do,” said Westerman.

Westerman said IT organizations are helping companies control business costs by monitoring air conditioning systems or driving quality assurance by diagnosing problems on manufacturing floors. Westerman said Boston-based financial services company State Street Corp. (NYSE: STT) led some of the industry’s most innovative technology projects through its IT group.

“More and more firms are starting to understand the power of IT. Having someone just pushing IT buttons can be a waste,” said Westerman.

In a 2007 survey of 170 CIOs sponsored by IBM Corp., 84 percent said they believe that technology is “significantly or profoundly” transforming their industries. In the same survey, only 16 percent of CIOs said they feel their companies are taking full advantage of IT’s potential.

While 43 percent of CIOs reported their primary role is participating in creating strategy for their organization, 26 percent said implementing the strategy was a key role, according to the survey.

Stuart McGuigan, senior vice president and CIO of Liberty Mutual Group, reports directly to the company’s CEO. McGuigan, who joined the company as CIO in 2004, said the IT organization has improved productivity around claims processing, streamlined the underwriting process and built a multimedia interface for automobile and homeowners insurance customers to do comparison shopping online. He said the technology behind its services gives Liberty Mutual a competitive advantage by increasing the speed to market.

“There is no such thing as an IT project — these are business projects,” said McGuigan, who added CIOs are becoming more business- and operations-oriented.

Lieb, who took up her post in 2003, oversees the FM Global information services group that employs 330 workers, 80 percent of whom are based in Rhode Island. As a member of the company’s corporate planning group, Lieb said she is involved with companywide business strategy and said the enhanced system gives the company a competitive edge.

“We rely so heavily on data,” said Lieb. “Information flow and management of our data is critical.”

 

Catherine Williams is a freelance reporter in Boston.