Frankly Speaking

After 27 year career Frank Liebeskind is opting to take a break -- albeit a temporary one -- to take time to smell the roses (and perhaps sip a superb red)Just three days after leaving his job as chief manager of group IT at MMI Insurance, Frank Liebeskind is bored. In North Queensland, tropical cyclone Frank is creating havoc, but in the Sydney suburb of Bondi the fringe effects seem to be contributing to the other Frank's mood. After a few days of huge swells the wind has turned and flattened out the surf while the low grey clouds that have come with the change drop heavy showers on the sand piled high up the beach by the high seas of the previous few days. But it's not really the weather that's to blame for Frank's boredom. Liebeskind notes that with no new job arranged this will be the first time in a 27-year career that he has had a vacation of more than two weeks. He appears to gain no pleasure from the prospect. Plans for an exotic cycling tour have fallen through and an alternative trip through Italy is still some three months away. Liebeskind spent four years at MMI, about the average job tenure over his career. He joined the company in April 1995 as it entered its first outsourcing arrangement with Computer Sciences Corp and left just as it negotiated a $48 million extension of that agreement. He admits that after four years the exciting challenges of his job were largely behind him. "It was starting to feel like business as usual," he explains.

It wasn't always like that. MMI as a company is keen to exploit technology to improve its competitiveness, and Liebeskind joined with the knowledge that he and his IT operation were expected to ensure that happened. "The then managing director Pieter Franzen believed that an insurance company in the year 2000 wouldn't be able to survive without advanced technology and processes. And with him it wasn't just a case of putting up the money; he ensured that it all worked," Liebeskind says. The processes of change had begun before Liebeskind joined MMI. A former colleague of his had been recruited to undertake business process reviews. "He decided he needed a new IT group to deliver the services, and I joined to do that. My job was to transform the IT group to be able to tackle the challenges of business process re-engineering and the new systems required to support the business changes." At the time, MMI was outsourcing its mainframe and desktop hardware operations to CSC. The original contract involved an Amdahl mainframe, some 250 desktop computers and about 10 servers.

MMI retained responsibility for applications. The company now supports about 3000 PCs, many of them used by insurance brokers and other third parties, and some 200 servers.

"Since then we have moved into the Unix environment, introduced client/server systems and re-engineered some of the legacy systems so that the mainframe itself became a server", Liebeskind says. "When dealing with transactions we had much more comfort in the support tools and systems software available for the mainframe. We re-engineered the front end using Delphi and Java with Tuxedo as middleware in a three-tiered approach." It took slightly more than a year to re-engineer the general insurance system. In the course of the four years of rapid change at MMI Liebeskind encountered the issues, challenges, problems and frustrations typically faced by large IS operations. As he talked of the challenges it became clear that while technology and associated issues were concerns, personnel management in all its guises was a recurring theme. The company tackled year 2000 compliance head-on, for example, and treated like any other development project. It also undertook remediation of the general insurance system while the system was being re-engineered. The client/ server systems were implemented initially in non-Y2K format, and the Y2K changes were all brought up after the new systems had been processing stably for several months. The company implemented the changes over an Easter weekend. "It showed the advantage of having good source control," Liebeskind claims.

MMI is now evaluating its desktop systems for Y2K compliance. Liebeskind says no problems are expected because the company stayed with top-tier supplier Compaq, and all desktops have been replaced since 1997 and are expected to pass muster. "We had a few hiccups with a couple of old routers, but [MMI had] to go through the process anyway." Liebeskind concedes that while he is confident MMI will have only minor problems, there is a chance that something will creep through the Y2K net. "I'm fatalistic about that," he says.

Staff Stress

If Y2K proved not to be the bogey for MMI that it is for some large businesses, Liebeskind found more than enough other challenges along the way. When he first arrived at MMI he was told that 80 per cent of his staff would not stay because they would not be able to cope with the rapid changes in both business requirements and in technologies. He heeded the daunting warning and managed his way around it. "The greatest enjoyment I got was taking Cobol programmers, who had not been responsible for PCs, and moving them into a new skills base.

They learned middleware, they learned Delphi, they learned Java and they were very satisfied. They gained new skills, and in my opinion, excelled in the new environment," Liebeskind says. Some human resources management issues proved to be an early challenge, Liebeskind acknowledges. For instance, he found that MMI's application staff were initially reluctant to accept responsibility and make decisions and in some instances would hold a meeting to discuss a problem instead of simply acting to remedy it. "Initially I had to go about empowering people so they felt comfortable making decisions. They had to realise that if they made a mistake they could simply correct it and go forward again," he says.

Another challenge was the all-too-frequent need to change the business perception of IT. "The view that IT didn't deliver on time and that it didn't perform to budget was prevalent. We overcame that perception by introducing service levels, performance appraisals and joint development activities," Liebeskind says. "We also introduced account management. Major business units had an account manager assigned to them so they had a one-stop shop for problem resolution. The account managers also helped the business units with the strategic use of IT and the way they could leverage off IT," he notes. "We also introduced time sheets, which led to huge changes. We used them not only for project management, but also as a tool to measure our performance in development and maintenance so we could compare it with best practice," he explains. "Development managers were expected to improve productivity by 10 per cent a year, and as soon as the time sheets went into use we got our very first 10 per cent gain." But if IT was becoming more productive, there was also a need to make it more customer-focused. "We realised we had achieved that when we conducted an IT staff survey after three years and 100 per cent acknowledged that the primary requirement of IT is customer service -- it had filtered down," Liebeskind says. "I tried to set up a model where, since the operational side of the hardware had been outsourced, IT had to perform well or it too would be outsourced.

"As part of the re-engineering program we set up a group to measure the benefits. We did achieve many, and many more are still to come. For example, a compulsory third-party insurance system had a less than 12 month payback; and original changes to the legacy insurance system brought a $14 million benefit, which was the basis of funding for major changes," Liebeskind says. "But the hard thing about measuring the benefits a business derives from IT is that as the business changes, some of the measurement methods become redundant because they were based on the old model. Service levels change over time and there are logistical changes and natural growth in terms of work units to be performed, which made some of our old measurements more difficult. "When the business units worked out their budgets it tended to be a case of take last year's and add or subtract a percentage. Now they are forecasting two years ahead and take into account the implementation and effects of new IT projects. They look at the IT business cost and the benefit in their forecasts," Liebeskind says.

"During MMI's period of rapid change there was no prioritisation of projects from an IT point of view. Business units put up a business case and had funds approved and then IT took on the project. We built up networks of contractors and software companies to help.

"The downside was we often couldn't get enough experienced business people to participate. We could always hire IT delivery people, but people with good business knowledge are always scarce. No matter how good an organisation, the key people are too few," he says. "We found that our staff had become empowered and comfortable with technology issues. But because they had advanced skills they were being poached by some very lucrative offers. Strangely, we found we didn't lose many staff to other insurance companies, but we did lose some to contracting, and especially in the Y2K arena." Liebeskind believes such career changes away from salaried work to contracting may become more commonplace in the next year or two. "I think the whole IT model may change so that most people become contractors in one way or another. Once the Y2K issue is out of the way the focus will shift to ERP and the backlog of new developments," he says. "I believe IT people will have a busy time until 2005." His own role in that period has yet to be defined. It may be within the user community again, or he may rejoin the industry. There can be little doubt, though, that whichever path Liebeskind chooses will leave him no time to become bored.

Keeping Up to Speed

An IT manager's need to keep up with technology poses "horrific" problems across a broad spectrum, according to Frank Liebeskind. He notes that the rate of change of technology brought vast changes to the systems environment at MMI during the four years he was there. "We went from the traditional mainframe system with MVS, Cobol, VSAM and DB2 to middleware, Sybase, SQL and Windows NT 4. We also moved into data warehousing and the concept of data cleansing," Liebeskind says. "Our people had to absorb all these new things, and that laid us open to the danger of key man dependency. You get one or two specialists for every technology, so support overheads can grow dramatically." Liebeskind also says he believes vendors should be playing a greater role in aiding the implementation of their new technologies. "I don't think there has been enough work by suppliers of the technology to get a strategic population of people with experience in their tools. If they could build a supply of contractors who knew the products, those contractors would subsequently become strong influencers in technical evaluations. I don't see any of that happening" To keep himself, and MMI's IT operation, up to speed with technological change Liebeskind relied on several staff members who "were strong on technology architectures and knew the emerging technologies". He also made extensive use of industry analysts such as the Gartner and Meta groups. "In addition, MMI had been an important customer for many tool suppliers, so they often came to us with details of their 'futures' and new products," he says.

The Four-Year Itch

Fresh out of uni with a bachelor's degree in commerce and honours in accounting, Frank Liebeskind considered a career in chartered accounting but decided against it because it would involve audit work, which he hated. He turned instead to the list of management consultants in the Yellow Pages and struck gold at the first: Arthur Andersen. At his brand new job in the consulting division he was immediately set to work -- cutting Cobol code. From Andersen, Liebeskind moved to Consolidated Press, working with a variety of disparate systems for five years before putting up his shingle as an independent consultant. "That was very successful," Liebeskind says, "but I kept running across a Victorian company called Praxa. Eventually I asked them why they hadn't opened in NSW and they said it was because they hadn't found the right man. I said, 'you haven't asked me'. So I created Praxa in NSW and started getting into systems integration in a small way." After four years he joined Fujitsu, which was making a concerted move into systems integration.

There he held a number of management roles, including business planning, business development and marketing. After yet another four-year spell, during which Fujitsu's revenue from systems integration grew to about $38 million, Liebeskind joined MMI.

And now he is a man of leisure, pondering his next move. "I am evaluating whether to go back into vendor world or stay in corporate IT. I am in the process of looking back to see what I have enjoyed most," Liebeskind says. "In the past I have characteristically set something up, and I may start up a supplier of something, or go into an IT shop that's not performing or pull together a national or global IT strategy for an Australian company." Will it be another four-year term? The law of averages might suggest it, but we'll have to wait and see.

Copyright © 1999 IDG Communications, Inc.

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