Robert Golden
Director of strategic business services
Insurance House
When Insurance House named Robert Golden director of strategic business services about two and a half years ago, it was clear to him the firm's technology operation needed a house cleaning. Figuring out what rooms should come first and what constituted "clean" was an entirely different manner.
So Golden and his staff set about to determine what wasn't working. What he found was that it was often not only technology that needed an upgrade, but also corporate structure, silos and culture. The result has been a $2 million savings in operating expenses.
BTN: What were your orders when you took your current job?
My role was to drive down transaction costs. We want to make technology a strategic enabler, to do things that make us competitive. But we want to do so with a lower cost of ownership. You want to enable strategy, but also be cost effective. We try to adopt what works best for each business practice.
How is that different than when you first took over?
At first, we invested in technology if we felt the tech itself was a good solution. And there was a lot of siloing going on. Things were very departmental. A lot of decisions were made with a preference for doing things in the way they were done in the past. We've gone through quite a bit of directors over the years as well. Each came with a new preference.
What kinds of problems did that pose?
Each director would want new technology, which would lead to new platforms. That would change the solution set. There was a lot of complexity. And when I took a look at our budget, I found that a majority of the money was being spent on maintenance and operations. There was very little being spent on new innovation, and on technology that was lowering costs.
What was your response to that?
The path was figuring out what I could do to simplify what was already complex. And for me, that meant figuring out how we could leverage existing technology, so that new technology could be rolled out with the sunset of the old. And also to move beyond each vertical having its own solution for something. Managing vendor relationships was also a large part of what we've worked to do. We were working with myriad vendors and we weren't getting the maximum for our technology spend in that area.
How was your firm measuring the effectiveness of its technology spend when you assumed your role?
It wasn't being effectively measured. There were a few comparisons of spending on a product against revenue. But my sneaking suspicion was that these comparisons were out of sync.
How do you change the way in which you measured effectiveness?
We went out and did interviews and asked people how well the technology was working. We went to our independent agents and asked them if all the money that we were spending on various pieces of technology was actually delivering value. And if we heard 'no' a significant number of times from the agents, we figured out what we could do with that investment if we freed up the money that we were spending on the solution that wasn't working.
We wanted to figure out where we could respond to our needs and make a change without making a new investment. We've had to reinvent a large part of our business.
Where are you in this process?
We are still in midstream. We are making a change in platform and are moving toward Web-enabled self-service. We are also working to lower transaction costs, and reducing and maximizing headcount, which can free up people to do other things. And that's where the efforts are showing up the most. We have very little true hard data to suggest return on investment. What we do have is growth versus a reduction in headcount, or our ability to do more with the same amount of [people] or less. That's become the biggest measure of our success [and what] we are using to date.
How can you measure true ROI, if it can indeed be measured?
I feel like we're just approaching a point where we can understand the cost of transaction, and you need to know that baseline number before you can determine how you can improve upon that cost. It can be very tough to try to determine that cost. There were a lot of manual processes that go with transactions that we hadn't accounted for. If you only streamline what you've accounted for, then the only thing you have is a salary. You need to look at the number of widgets they are producing, the workers, the systems, the salaries, the space are using, the square footage in the building. And where the cost is placed also matters. When I first go into this job, when a line of business tech purchase was incurred, it hit my budget. Now we ID and capture what was needed for the purchase, right down to printers, Blackberrys and servers. So we can now get a much more true P&L measure. It's extremely tough, and we've made progress. There was a lot of legacy information. It's been aggressive, at times frustrating and also exciting. We can see we're putting the company on course. The corporate culture is more significant than tech change. If technology breaks, you then know how not to do it. But the business culture is a challenge everyday. If you don't understand it, it's very hard.
