Since its founding in 1918, New York City–based nonprofit financial services company TIAA-CREF has expanded its business beyond pensions to include variable annuities, insurance, financial advice, trust services and college tuition financing. The company, which has traditionally served artists, educators, researchers, health-care providers and the institutions employing them, has had its ups and downs over the years, most recently in the early part of the new millennium. By 2002, TIAA-CREF had expanded so much that high costs were beginning to impair its ability to maintain its position as the low-cost provider in the retirement services business. More agile, innovative and customer-focused companies threatened to lure away TIAA-CREF’s clients.

That year, Herbert Allison was elected TIAA-CREF’s chairman, president and CEO, and was charged with modernizing and restructuring the company. One of the first areas the soft-spoken Wall Street heavyweight targeted was IT. He called for raising the profile of the company’s CTO (in investment companies, the "CIO" acronym is reserved for the chief investment officer), centralizing IT and developing a new technology platform that would allow TIAA-CREF to realize its strategic goal: to become the go-to retirement services provider for moderate to affluent individuals by keeping its prices low and by tailoring products, services and advice to individual clients.

Allison takes pride in TIAA-CREF’s IT department and its accomplishments, boasting about its ability to develop a new technology platform in two years when outside experts predicted it would take three or four. "IT is central to our strategy and to virtually all of our initiatives," he says. CIO talked to Allison about his views on IT, the role that technology is playing in the company’s turnaround, and how IT’s reputation has changed for the better.

CIO: You worked for Merrill Lynch for 28 years before joining TIAA-CREF. How did your tenure at Merrill shape your views about technology?

Herbert Allison: At Merrill, I saw situations with traders who have half a dozen TV screens in their work areas trying to toggle between different technologies to operate in this very fast-paced world of securities trading. I thought there was an opportunity to use technology to make their lives easier, to plug into more sources of data in real-time, which is vital to their competitiveness.

One of the first things I did when I ran all of Merrill’s trading and investment banking was to appoint the first CTO of that group to catalog all the systems we were using, rationalize those systems, reduce our costs and improve the functionality for our traders and investment bankers. Technology, as was typical in the industry, was balkanized among many different areas.