How MetLife Met the Integration Challenge

Saddled with numerous disparate systems after an aggressive acquisition binge, MetLife needed to get integrated to cash in on its size and improve customer service. Here's how it did it.

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A set of seven information technology principles (see "Seven Habits of the Highly Integrated Enterprise," Page 53) to guide IT decision making was among the first things the enterprise architecture council developed. "It was the set of values on which we wanted to operate with regards to technology within the firm," says Sheinheit. "They seemed like obvious ideals, but they weren’t always followed. So we felt it was important to communicate them, create an understanding of what each one means, and explain the rationale for and implications of each principle."

The team also created a technology standards document that it updates frequently via the corporate intranet. It also published a road map for technology projects, detailing how MetLife would integrate across the five CIOs, the application development groups, the CTO and his infrastructure group, and ensure that necessary checkpoints and controls are established. "My sense is that not too many companies have been that successful in getting to the point that we’re at with this," says Sheinheit. "In companies where technology is more decentralized, you’ll find even less of this kind of discipline, with different ways of doing things going on in different parts of the business." At MetLife just a few years ago, you would have found just that.

Sheinheit’s team further reduced costs and improved efficiencies by integrating the data centers for acquisitions New England Financial and General American Financial into MetLife’s common data center on Memorial Day weekend of 2001. "It was a major effort and a milestone of our integration efforts," says Sheinheit. "It’s resulted in a 40 percent reduction in costs and an increase in service for the business because they’re now working in a more mature, scalable environment."

Sheinheit will continue to oversee most of these integration initiatives indefinitely. "When I look at our infrastructure today, I’d say we’re probably 80 percent integrated, but that’s a moving target. If I look at it next week, I don’t know if I’ll be at 70 percent or 90 percent," he says. "Maybe the answer is that we’ll always be around 80 percent integrated. There will always be things we’ll continue to look at."

Work in Progress

Like the Metropolitan Life Tower, under renovation and enshrouded in scaffolding, the company will continue its integration efforts as part of the business reorganization. Business unit CIOs are consolidating and retiring legacy systems as part of Project LESS, a three-year legacy system simplification project with a two-year payback. The goal is to consolidate like systems onto common platforms to eliminate redundant business processes and reduce ongoing maintenance costs. An Internet self-service initiative, fueled by a $200 million investment, is also under way.

There are numerous smaller integration projects within each business unit as well. Tony Colyandro, Met’s vice president and CIO of broker/dealers and investments, and his staff are combining front-, middle- and back-office functions of all four broker/dealers. They are seeking economies of scale and looking for the best solutions within each of the brokers’ existing systems.

Hammersmith has invested $120 million over several years to create self-service portals called MyBenefits.com and MetDental that will connect legacy systems for institutional clients. Richard Small, vice president and CIO of MetLife Auto and Home, has invested $40 million to integrate the personal lines of business (worth $1.1 billion in premiums) acquired from St. Paul Cos. in 1999. These pro- jects in specific business units and across the enterprise will continue for some time.

"We still have a lot of work to be done. We have a lot of legacy systems that still need to be supported that we mask with middleware," Sheinheit says. "Today, we’re doing a lot of front-ending things, creating a veneer that makes it look as if everything’s integrated. But over time, we’re going to get all of the pieces actually integrated."

Meta Group’s Johnston says we won’t see a truly integrated MetLife, or any other insurance company, until at least 2006 or 2007. Still, MetLife’s long-term investment in integration is exemplary, he says. "MetLife put a stake in the ground and made the decision that they’re going to have to do this or be ineffective," he says. "That shows a great degree of moral courage on their part to invest in something where they may not necessarily see a real return on their investment in 12 or 18 months."

For Cavanagh, the enduring nature of MetLife’s integration efforts is both logical and welcome. "Integration is an ongoing challenge because we’re always going to be adding new business, and people are going to keep coming up with new ideas in our existing business," he says. "We’re going to find more and more things that belong together."

Copyright © 2002 IDG Communications, Inc.

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