It’s one thing to move fast and break things when you’re a scrappy start-up, but what if you’re a 170-year-old insurer? In this podcast episode, we get a behind-the-scenes look at two transformations at Westfield: what happened, where it got stuck and how it got unstuck.
Highlights
- Westfield undertook a claims transformation that took three to four years to complete, with up to 250 people working on it. The resulting platform enables Westfield to build and iterate quickly to provide new capabilities.
- Large-scale transformations can be compared to a home renovation: in addition to the new features, there are always changes that need to happen so that the system meets current standards.
- Change is inevitable, and will happen quickly within an IT organization. IT has an opportunity to bring together all the pieces of a transformation—process change, new skill sets, technology and change management—and shepherd its success for its business partners.
Transforming legacy, with Tracey Petkovic
We’re kicking off season three of the Accenture Insurance Influencers podcast with Tracey Petkovic. Tracey is the Chief Information Officer at Westfield, a predominant P&C insurance carrier based in Westfield Center, Ohio.
In this episode, we get a behind-the-scenes look at two technology transformations at Westfield—and what it really means to move fast and break things when you’re an incumbent with legacy technology, processes and thinking.
The following transcript has been edited for length and clarity.
Welcome to season three of the Accenture Insurance Influencers podcast. In this episode, I’m joined by Tracey Petkovic.
I understand that there are two case studies at Westfield to talk about, one that has been completed, and one that is in progress. I’d love to dig into these. Where does it make sense to start… with the completed project?
Sure. So there’s probably been more than two, but those are the two that I was actively involved in in the past several years. The first one is a claims transformation and it basically began because we weren’t able to meet the business needs with our current platform. It was very old and we were still doing a lot of manual processes. They were ineffective, inefficient.
At that point in time, claims had developed a strategy and in order to meet that strategy, we needed to make some pretty significant transformational changes within our claims service offering, in terms of the tools and technologies that they were using.
When did this claims transformation happen?
We started in 2010/2011 with the strategy work. We implemented in 2014, I believe. Because a lot of our systems were older, let’s just say…It wasn’t just implementing a new claims system. We also had to do a lot of other work around it, which is why it took so long and required as much work as it did from an IT perspective.
And how many people were involved?
At one point we had 250 people working on it, and those weren’t full-time equivalent but 250 people, whether that be a vendor or somebody from Westfield.
And how did you determine how you were going to address this problem?
We did a full assessment of the capabilities that we were trying to drive and then matched up the technology to those capabilities. And we went to bid through our RFP process. Through that process we looked at the various vendors that were offering products in that space. We selected one and obviously did a lot of reference checks with other carriers in terms of what their experience was.
So, it was three to four years from strategy to implementation. What were the results at the end? What were you able to do that you weren’t able to do before?
We had very specific business outcomes that we were looking for and we were able to meet those business outcomes. Actually, we had the return on investment, I believe, within the first 18 to 24 months. It was a pretty quick turnaround in terms of that investment.
What it really did was put us in a place where we had the platform that we can continue to build on very quickly. So we’ve been able to continue to enhance that platform and do very quick iterations in terms of bringing new capabilities, even beyond the original ones that we started with.
So what I’m hearing is that as a result of the claims transformation, you had infrastructure that allowed you to become more nimble from that point on. Is that accurate?
Absolutely.
Was that part of the objective of the transformation to begin with?
Yes, very much so.
Now these stories never quite go according to script, right? So I’m curious, what were the sticking points of this transformation? Where did you get stuck and how did you get unstuck?
One of the biggest sticking points that we had were the integrations. So if you think about claims processing, it requires a lot of third parties that you’re integrating with in some way, shape or form. Maybe that’s not an electronic integration, but you are having some handoffs of information and data.
So in this particular case we automated a lot of those integrations. It required us to go back and even relook at contracts that we had with those vendors. Some of the vendors were much more prepared to be able to work with us because they had those capabilities and were ready to support us. In other cases, it was a little bit bigger stretch in terms of even their ability to help us develop those integrations with them. That was probably one of the more significant challenges that we had.
The other challenge that I think that we had: if you think about it, when you’re doing these large transformations it’s like renovating a house. So there’s always those architectural changes that you have to make in order for the system to meet the most up-to-date requirements. And so those were also really challenging, because bringing everything forward is not necessarily as easy as it might seem, going into it.
Did that require you to, maybe, phase out a vendor because they weren’t able to keep up with your pace of transformation?
We didn’t at that point in time. But I will tell you that it caused us to rethink some vendors, and we have continued to do that as we move forward.
Did you use a particular methodology? A common approach is agile and iterations. Is that something that Westfield used, or did you take a more traditional waterfall approach?
It was a pretty big program and we used a combination. So with the product that we purchased, we used iterations. We had some work that was actually on the mainframe and was much more traditional in terms of waterfall. And then we had to match up the dependencies in terms of target dates and ensure that we had those in alignment.
Were there any surprises about the project? Moments of, “Oh, we did not see that coming. How are we going to deal with this?”
Conversion. And it wasn’t a surprise necessarily, but it was more difficult than we probably ever imagined it to be. It really requires a lot of very detailed laborious work in order to cut over from your old system and being able to decommission it. There was a lot of work that went into that and it’s probably a bigger effort than we initially gave it, before we really understood how challenging it was going to be.
So before go into your in-process transformation, I’m wondering if there were any lessons from this claims transformation that are keys to a successful transformation at Westfield?
If I think of some of the lessons learned:
- First, I wish I would have really understood the integrations a little bit more going in.
- Second, how challenging it was going to be to rework those contracts. We could have done that work a little bit earlier and brought that forward in the plan.
- Third, I really wish we would have done some more due diligence on some of the third parties to make sure that they were prepared to be able to do those integrations.
Finally, some of the retro-fitting of the current system into current architecture was a lot more challenging than I think we had expected it to be. Just being able to work through some of that was timely and required a lot of effort.
So let’s shift over to your transformation that’s in progress. Can you tell me a bit about that?
Sure. We are currently working on a small business transformation effort. We developed a strategy a couple of years ago—a competitive business strategy—and it was really around small business. And so this is really a transformation of the processes—the roles and the processes and the technology and everything. And really looking at it in a new way.
Where in the process are you with the small business transformation?
We are currently in what we’re calling a soft launch. We’ve just put it in the hands of a few agents to have them go through some processes with us and see how it how it works from their end and get their feedback.
What sticking points did you encounter with the small business transformation?
There were a number of them. We’ve had some organizational change in the middle of it that we needed to work through, which was probably more significant than even at the time we recognized. We also worked through some challenges in terms of vendors and making sure that they were ready to support us.
Particularly in one integration, it was a lot more complex, a lot more challenging than we thought it was going to be. And so it took a lot more work and impacted our schedule and our timeframe a little bit. So those are probably the big things that we’ve recovered from or worked through as we’ve gone through this work.
And were there any surprises with this one?
I think there were probably quite a few surprises. You know, you never expect to have organizational change impact you. In this particular case, like I said, we had planned out and thought we had a pretty good handle on the integrations, but they quickly became more complex than what we thought they might be.
We’ve had as many as 500 people working on it at any given time. And so if you think about that, just even making a change is huge because it’s like turning the Titanic. You know, trying to get people to understand what change you’re making and why you’re making it and let them work through the change curve and all that kind of stuff is, when you have this many people working on any given initiative—it’s just challenging.
That’s a topic that I definitely want to come back to. Just to close out the small business transformation, were there any specific lessons from your claims transformation experience that changed the way that you implemented or developed the small business transformation?
We definitely will use lessons learned from the prior transformations. So we actually had the claims leadership from that transformation come in multiple times and speak to the individuals that were working on small business to make sure that they understood what they experienced through the process.
We also have a number of people from the IT side that have worked through the claims initiative, so we were able to bring some of that knowledge and experience with us, which definitely helped. I would say a lot of it has followed a similar path. It was just much bigger, much broader and a little more complicated to work through them than the last one.
And what is the intended outcome of the small business transformation? What does it allow you to do that you weren’t able to do before?
Really, it’s around speed to market. Being able to process more business and being able to see the results of that and make quick changes. It’s really around being more effective and efficient in the marketplace.
Now in both cases, and you’ve alluded to this, Westfield is 170 years old. I imagine there is some serious legacy technology and very likely legacy systems, legacy thinking. I’m wondering if you can touch on that. How do the unavoidable issues around legacy play with the need to innovate, be faster, be faster to market, be more nimble and build an infrastructure that allows you to be competitive?
We really look at it from a speed to market—being able to be more real-time than batch and making sure that we were able to meet the customer needs from a real-time perspective. So we were trying to isolate as much as possible in order to enable us to go quicker.
We had 30-year-old systems that we were trying to change to try to meet these needs. And while we’re buying new technology to help support these new functions, or these updated functions, it still requires some changes on the backend which are challenging and require a lot of time.
In both transformations we really worked on trying to isolate as much as we could from the mainframe: our old technology and from the current systems. In some cases you can make that break, in some cases you can’t. We tried to make it so that we could process as much as we could without going through the legacy systems—but at some point the financials still have to hit the backend, so you can only do so much.
And as far as legacy systems or legacy culture, is that something that you’ve had to deal with at Westfield? What is the attitude toward change within the organization?
I think everybody’s pretty excited about the change. We’ve also been able to move people from the legacy systems into the new technology to give them that opportunity, which has been well received. So we’re trying to make sure that we’re balancing all of those: both the needs of the current systems—because they’re not necessarily going away—as well as the development opportunities for individuals within the organization to learn new things and to advance in their own learning and career.
Can you talk a bit about some of those opportunities? What skills has Westfield identified and are there programs in place to help cultivate those skills?
For example, we needed people to learn the new policy system, the policy and billing system. So we’ve sent people to training to learn those new systems and then we’ve also given them the opportunity to actually be on the team and put it to use rather quickly.
At the same time we have some other new things going on within the organization where we’ve taken some individuals who, for example, worked on our middleware systems in the past and they’re now working on developing new APIs. So they’ve been able to learn new technology and take what they had from an experience perspective and apply it to the new technology. Those are a couple of examples.
That’s pretty cool. From an infrastructure standpoint, going back to what you said about your claims transformation platform being able to propel you forward, I’m wondering, what considerations are there for developing an infrastructure that you hope enables you to be more nimble and deal with that future?
I really think it comes down to getting a solid framework that allows you to use APIs to integrate with any new functionality, new capabilities that people are looking for. So that’s really what we were looking for. Now, will that always work? I’m sure we will find new challenges as we move forward.
But it was really to try to get to the place where we could do the integration work to integrate to our systems or third-party systems and leverage that new system as a foundation for those integrations moving forward. That’s really how we were looking at it.
Part of this conversation around transformation you’ve talked about is the people and culture piece of it, and the change management—which is notoriously difficult. I’m wondering if you can share keys to success. How do you bring people along with you when you’re essentially changing the way that they do their jobs?
I think part of it is being very transparent, as transparent as you can be, making sure that you’re doing ongoing communications and making sure that you’re sharing stories along the way.
From a change leadership perspective, we like to try to keep a pulse on what people are thinking or feeling, and whether we need to do things to react to that or whether we have a problem in a given space. So we do periodic surveys to check how people are feeling and whether there are things that we need to address. I think that a pulse-check, is what I’d like to call it, is really important to make sure that you really understand how people are feeling and whether there are additional actions that you need to take that that maybe you hadn’t planned for.
Can you give me an example of questions you might ask for a pulse check?
It could be things like:
- Do you think we’re on the right track to meet our delivery time frame?
- How are you feeling about quality?
- How are you feeling about the schedule?
It’s those types of things: basically, do you feel like we’re on the right track?
And how do you determine whether or not to take action? When is something significant enough for you to address?
I think it’s really hard. It’s really hard to figure out the balance, because obviously individuals are going through a change themselves. So you really have to get a pretty broad perspective on how people are feeling and how you want to address it.
In a lot of cases, we will look at the data that comes out of the survey and decide whether we want to address it in upcoming forums like town hall meetings, or upcoming employee meetings. Or how we want to address it or where we think the best place to address it is.
One of the reasons I like the pulse survey is because we can also see whether it’s a problem in a given area or whether it’s a broad problem. And so then we can get a better idea of how we want to address it.
Can you talk about trust within the organization? It strikes me that in times of tremendous change, trust is something that’s essential but not always very easy to cultivate.
Correct. For me, building trust is really getting face time. So trying to make sure that I am touching base with people on a regular basis, whether that’s seeing them in the cafeteria or a meeting or what, but asking them how they’re feeling, what’s going on, and trying to build those individual relationships. So that when there is an issue, when they’re feeling like we’re going down the wrong path, that somebody will bring that up to you and talk to you about it.
It does take some work to build those trusting relationships. The more transparent that you can be, the more that you can communicate and be very open, the more trust you’re going to build.
You’d also mentioned the role of stories in change management. Can you talk a bit about how stories are used within Westfield?
I think being able to share real-life stories about what’s successful and how things are going. So if you think about, this was a long period of time that we’ve been under development. Being able to help people understand and celebrate little wins along the way. Each of those little wins may seem little in the grand scheme, but they were pretty big to somebody. And within that particular project, it probably took a lot of time and a lot of effort. So being able to celebrate those along the way is really important.
Part of innovation means taking risks and by their very nature risks don’t always pay off. That’s not necessarily something that many in the insurance industry are comfortable with. I’m wondering if you can talk a little bit about how failure plays into all of this and to what extent do you encourage failure. To what extent is failure productive? Obviously, it can go too far and can be very expensive. So where is that balance?
We encourage people to fail fast. And we are trying to drive that message in terms of, find out quickly that things aren’t going right, be able to make sure you’re raising your hand if things don’t seem right.
So I can give one particular example. Recently, we had not yet signed a vendor contract yet. We were down a path of implementing some new software and people were starting to feel like there were several question marks in their mind about whether it was feasible to actually implement. And I encouraged people to get in the room quickly and make sure we were doing the right thing. It was much easier before we had a contract in place to take a different direction, and encourage them to fail fast if we needed to.
So we’re really trying to get things more incremental, trying to break things down into incremental pieces. That helps us get things to market, test it in the market without having all the bells and whistles. And then we can determine the next steps and whether you want to continue to invest in it, whether you want to pull it out or how you want to move forward.
And overall through these transformations and through your experiences at Westfield, what do you think are success factors to navigating change successfully?
I don’t know how to answer that necessarily, but again I think navigating change—especially if you look at the big things that we’ve been able to do over the past few years—it really comes back to getting an organization that is change ready.
Change is going to happen. It’s going to happen pretty fast in an IT organization and continuing to have people ready to be able to accept and move forward with change and helping our business partners working directly with them through significant change. I don’t think change is a question. It’s just how fast and that you can move through it.
And again, I think a big part of that is being incremental. You know, we’ve done these big transformation projects, but I’m hoping that now that we’ve got some of the framework and foundation built, that they will become incremental investments versus these very behemoth programs that we’ve been doing over the past few years.
As we’ve seen the pace of change speed up, and in particular technology changes, what do you see as the CIO’s role in helping an organization navigate that change?
I think a lot of it has to do with making sure that as CIOs, we are:
- Asking the right questions.
- Understanding the priorities.
- Putting the right emphasis on the right things to meet not only the current need but also the future need.
- Helping the organization to go through transformations that are required in order for them to achieve their goals.
Those transformations require everything from process change, new skill sets, new technology, obviously, and a whole lot of change management. And since IT tends to be the one group that goes through them the most, with each of the different business areas, we are looked at as bringing all of that together with the various business partners in order to help them be successful.
How do you know what questions to ask? What questions have you learned to ask?
The kind of questions that I’ve learned to ask are:
- What is the business outcome that we’re trying to achieve?
- How will we measure success?
- How does this align with our strategy?
- Is there a way to get this to market sooner without all the bells and whistles to gain some early benefit and get some early feedback?
Those are great questions. I hope our listeners are writing those ones down if they’re not already.
Unfortunately, that’s all we have time for. Tracey, thank you so much for making the time to speak with me today. I really appreciate your willingness to take us behind the scenes and share what you’ve learned at Westfield, and I’m sure that our listeners do as well.
Thank you.
Summary
- As a result of its claims transformation, Westfield didn’t just upgrade its systems—it enabled infrastructure that helps it be more nimble moving forward.
- Westfield brings lessons from prior transformations into new projects. For example, after its claims transformation, team members shared their experiences with colleagues working on a small business platform transformation.
- Change management is a critical part of successful technology transformation. Transparency, ongoing communications and trust are important ways to bring people with the organization.
- The CIO plays a crucial role in enabling change, starting with asking the right questions.
For more guidance on innovation:
- Read how addressing legacy technology debt allows insurers to thrive.
- See why agile insurers see innovation as critical for their survival.
- Discover the keys to sustainable growth at a time of mounting disruption.
In two weeks, we’ll be introducing Don Bailey. Don is a partner at Bristlecone, a coaching, consulting and leadership development firm, with decades of experience in the insurance industry. We’ll be looking at the state of leadership in the insurance industry—and why leadership is the purview of everyone, not just the C-suite.
In the meantime, you can catch up with seasons one and two of the podcast.
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