How one IT leader measures the business value of IT

In part two of this Q&A series, ICW Group’s vice president of IT discusses the importance of a business and IT alignment and how he measures IT value.

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In part one of this Q&A series, I sat down with Jeff Rauch, vice president of IT at ICW Group, a leading national insurance carrier with over 300,000 customers and 700 employees. Jeff shared his thoughts on the changing role of IT, how he is thinking about insurtech disruptors and the future of the insurance industry as a whole. (Disclosure: ICW Group is a customer of my employer, MuleSoft.)

With Jeff noting in part one that his organization’s success will be largely determined by how well it executes on an integration strategy, part two of this Q&A delves further into Jeff’s thoughts on the importance of integration, along with why a business and IT alignment is critical for companies to succeed at digital transformation.

Q: Why is integration important in your ecosystem?

Jeff Rauch: Insurance is a service-first industry, but our operational performance is predicated on how well we connect and analyze data to deliver insights to drive company decisions. With our customers becoming savvier, we will need to provide richer information to them as well as figure out how to capture their sentiments in new ways and gauge their experiences with us so we can evolve our offerings to meet their needs. Therefore, having a solid API and integration strategy helps enable our capabilities in this area.

As technology evolves, customer demands increase and competition becomes fiercer. Companies that aren’t already far down the API and integration path will be left behind. By the end of 2019, my goal is to have every single integration point at ICW Group on our integration platform; API-led design will become our lifeblood. It’s how we’re going to connect and enable everything. We’re looking forward to being well positioned to leverage the public API ecosystem, so we can both provide and receive innovative offerings on a much broader, faster scale.

Q: How important is reusability and disposability within your IT organization?

JR: To me, reusability and disposability form a symbiotic relationship. When you’re getting a lot of reusability out of your integration services, I believe it means two things: good design practices were prioritized and there is a strong overall understanding of your operational processes and future capability needs. Of course, the more we reuse our services, the less repetitive work team members have to do and the faster they can move forward with confidence because success is proven. It typically indicates there is a strong foundation in place for which future innovation can grow. 

Most people place more value on reusability, but I strongly believe that designing for disposability is just as important. It allows teams to be more entrepreneurial and see if new services will add value without investing a lot of time. Also, being proactive about disposing services allows teams to reduce maintenance costs and shift to next generation services or platforms more quickly. If architects think everything they create is going to stand the test of time, they’re mistaken because change is the only constant in IT.

Q: How do you communicate the value your team is building to your CEO and CFO?

JR: I’m very fortunate that our leadership team really understands how integral technology is to achieving sustainable business growth in today’s economy. Typically, when a new opportunity presents itself, IT is the first call to see what’s possible. Over the years, we’ve worked hard to build a stronger partnership centered around our business’ vision and goals.

That being said, throughout my career, I’ve accumulated many valuable “scars” that are constant reminders of how challenging technology can be due to its fast moving nature. The most important piece of advice I’d offer aspiring IT leaders is to never assume anything!  Technology is super challenging and can be interpreted by people in different ways. Listen to your team members and ask them lots of questions to make sure you’re not being short-sighted or heavy-handed. Constantly seek feedback on how you and your team can improve, especially from your skeptics. Go the extra mile to understand your stakeholders’ needs and strategic plans, so you can focus on the value IT projects will bring to the company rather than trying to implement new tech because it’s the cool thing to do. Seize every opportunity to share knowledge on your audience’s terms. For example, pictures and analogies are really helpful for non-techies. Instead of sending them a whitepaper on application networks, for instance, you could draw out how an application network is like a central nervous system. It’s more likely to sink in.

Q: What KPIs are you using to measure IT’s impact?

JR: CEOs primarily care about faster, better, cheaper. As a result, IT leaders have to be able to translate the value of IT across those three domains. The KPIs IT leaders set for their teams might not necessarily be directly shared with business executives, but they must get translated into “C-level” speak. For example, when communicating with our top executives, I use the mantra: simplify, standardize, modernize. Using those three words, I can easily communicate where we are today and where we need to go, and everyone knows what I’m talking about (at least I think so, but I would hate to assume). 

“Simplify” centers around reducing technical debt and keeping our vendor solutions current. It is a weighted environmental health score that really just applies the common-sense principle that out-of-date tech is complex to manage.

“Standardize” relates to our architecture capabilities and the ideal number of technologies and services that we’re looking to support our IT organization. If we do our job right, the number of reusable services and multi-use applications should rise as the number of technologies we manage goes down.

“Modernize” is really all about disposing of the past and building for the future, looking at what percentage of IT spend is on innovation and business opportunities versus foundational initiatives. Over time, we should start to see the innovation side of the ratio go up, especially if we are effective at simplifying and standardizing our environment.

It’s important to note that if you have the same KPIs year-over-year, you’re doing your company and team a disservice. I don’t anticipate us having the same KPIs two years from now because the rate of change and competition won’t allow it.

Q: What’s the biggest thing in 2018 that IT leaders need to pay attention to? Are you experimenting with any hot trends?

JR: I tested a virtual reality (VR) product at a conference a few months ago. It was really cool. But as tempting as it would be to transform our IT project room into a VR lab, if a hot trend like VR can’t be used to effectively service our customers during their time of need, we won’t be in business very long.

Innovation experiments add value if planned effectively and backed by sound business fundamentals. For example, if we find out 80 percent of our future customers hate email but love Instagram or Snapchat, we should experiment with delivering insurance services they are likely to use most over those mediums. But here’s the kicker, and it leads to what I feel is the biggest thing IT leaders need to pay attention to now: You can’t do anything without talented, hardworking people, especially innovation.

Finding fearless, critical thinkers who don’t take no for an answer and can solve complex problems within a team environment is like striking gold. I believe an IT leader’s first priority is to find them by any means possible, especially in leadership roles because it has a multiplicative impact. I recommend not going it alone – accept and seek out all the help you can get. Once you start to hire strong people, find ways to keep them engaged by cultivating a stimulating culture, providing challenging work and offering new opportunities for growth. That’s what I’m most focused on, and I encourage other IT leaders to do the same.

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