In two years Giles Baxter has turned a fragmented technology landscape acquired through rapid acquisition into an integrated, professionalised, well-governed, effective and efficient platform for growth. The business now has a platform on which it can deliver customer offerings with confidence, to a high quality and in a cost-effective way. The next step will be to scale the successes out, working alongside the business to seek the technology opportunity in every customer offering. Job titleInternational CIO Company nameArthur J Gallagher How are you influencing the products, customer experience and services your organisation offers to its customers?Our 2014-16 IT strategy set out to take a fragmented technology landscape acquired through rapid acquisition and transform it into an integrated, professionalised, well-governed, effective and efficient platform for growth. 2016 saw that strategy achieved and more. With the successful completion of our first strategic cycle we have provided the business with a platform on which we can deliver customer offerings with confidence, to a high quality and in a cost-effective way – a solid yet agile platform is in itself a differentiator. But we also have examples where we have gone beyond this, extending the platform from a solid base to a core part of our unique offering. Our business intelligence allows us to have rich conversations with our customers. In-house systems delivered with agility allow us to rapidly tailor and support individual products to suit our customers’ unique needs. Our digital capabilities allow us to provide add-ons that streamline customers’ business models and transact in a modern and mobile way. Our next strategic cycle is about taking our success stories and scaling them out; working alongside the business to seek the technology opportunity in every customer offering, while having confidence in our ability to deliver it. Define the key business outcomes that you have delivered over the last 12 months and their impact on your organisation’s performanceAs a business we continue to grow profitably in tough market conditions, and our technology improvements have been a recognised contribution to that growth. We have examples where we have driven retention as we have improved our quality of service delivery. We have examples where the growth has been driven by customers selecting us because we can offer increasingly secure platforms, value-added insight and digital offerings as add-ons to core products. We have streamlined technology through restructuring the department, decommissioning systems and infrastructure, and active supplier management, resulting in cost reductions of up to 20%, which drop directly to our bottom line. We are making a significant measurable positive impact across all our key business performance metrics. What has been your involvement with innovation at your organisation – in particular, with products, business model and technology – over the last 12 months?Insurance broking connects customers with insurers, creating the marketplace and facilitating the flow of information. Data is our asset, our products are intangible and our systems perform our fulfilment. IT has always therefore been involved in ‘building the product’ and the ‘wiring up of its distribution’. While technology has traditionally tended to be engaged at the latter stages in the innovation lifecycle, increasingly we are now collaborating at the start of the innovation process to ask what the technology enabled add-ons are that we could bundle with our products and services to give us competitive advantage. Our TravelCert app, for example, enables university employees to download electronic insurance certificates rather than request paper copies. This simple but powerful mobile app has revolutionised the entire business model in the traveller, university, broker, insurer interaction. This technology-led innovation is winning us both business and awards, having won the award for Best Project Dependent on Mobile Technology in the 2016 industry awards. It is our new template for how we interact with our key delivery partners in a digital age. This is but one in a number of examples where a technology differentiator bundled with a traditional product or business model is delivering competitive advantage across the entire value chain. We have plenty more in the pipeline. How have you delivered cultural and behavioural change as a CIO within the IT department and/or more broadly across the organisation?Arthur J Gallagher has a professional, collaborative, performance-driven culture, which centres on providing excellence for our customers. This culture resonates with my personal beliefs, so it is natural to set an aligned cultural tone from the top, role-modelling behaviour every day. But more than that, I expect the entire IT leadership team and function to exhibit and reinforce that behaviour. I take the leadership team offsite every year for dedicated, facilitated time to explore the culture we want to create and the actions we will take throughout the year to build it, ranging from how we carry out our work every day, through the social and charitable events we will run, to our investment in the future workforce through the apprentice scheme we initiated last year. This cultural action planning is subsequently cascaded and replicated down through the IT organisation. Our leadership team has been stable for a number of years now, building a deep and shared commitment to our collective performance. We take our cultural agenda as seriously as our technology delivery agenda. As our culture strengthens, so our results are improving too. This cultural investment spreads further than our function as we include wider business attendance at our structured events. Spending time together with a shared purpose has helped break down silos and create deeper shared connections. Once established, these connection are enabling cross-functional teams to solve complex business challenges, which drives both personal satisfaction and organisational value. Our culture and strategy are operating effectively alongside each other. How have you worked with your CEO and/or board to communicate whatever ‘digital’ and IT means to your organisation/sector and improve digital literacy at the highest levels of the organisation?The shift in our customers’ preferences towards digital channels is a reality being experienced across our business at all levels on a daily basis. To embrace this as an opportunity, we have established a technology advisory board which sets IT and digital strategies for debate with the executive and board. As a result our business plans include explicit investment in digital initiatives, our digital investment portfolio is reported on and discussed as a standing item on the executive agenda, and all technology investments are now designed as digital first. Digital has come of age for us. The fact that we are winning both awards and, more importantly, business on the back of our digital offerings creates real pull at the highest levels to increase engagement in the debate. How have you worked with the technology and IT vendor market to achieve your business goals? How have you been able to influence IT suppliers and successfully manage your partnerships/relationships with large IT companies, SMEs and startups?2016 has seen a step-change in how we interact with our supplier base to create value –for us, our customers and for our partners. Over a number of years we have created a multisourcing vendor ecosystem to foster competition and hunger, and coupled it with an open and collaborative approach so we can focus on and drive towards the shared goals. With this ecosystem established, we have taken a big step forward with our scale strategic partners in 2016 to focus far more on commitment, value-driven outcomes and shared risk/reward. We have built a sourcing function in 2016 to professionally manage this step-change in thinking. This step forward in our scale engagements has allowed us to establish extended delivery centres offshore with our strategic partners – where their teams work on our projects, are co-branded with us, and we all share in our joint success. These centres are building and supporting strategic technology assets at increasing velocity, quality and cost-effectiveness. While our strategic relationships broaden and deepen, we continue to manage our tactical relationships hard, but still have space to interact with niche players bringing differentiated products to market, be that through sitting on external advisory boards or implementing and leveraging new technology offerings in our ecosystem. In some cases we go as far as to work directly with our suppliers to build out their core software and offerings so they can take them back into the marketplace, harking back to the collaborative, community approach of the open source ethos. How have you tried to develop the diversity of your team?Over my three years with Arthur J Gallagher I have had the opportunity to fundamentally rebuild the technology function. This has been done with a keen focus on embracing diversity across gender, ethnicity, background, skill and experience. I’m also personally committed to actively encouraging diversity of thought among the IT leadership team and look to hire individuals who bring complementary perspectives. We work closely with recruiters to ensure they source and present candidates from a diverse pool. It is this diversity that allows us to interact effectively with our broad range of customers, our business colleagues and our supplier base. As we have expanded globally I have built capabilities in Canada and Latin America, which by its very nature brings multicultural approaches into the leadership team. We have established new delivery centres in collaboration with our key suppliers in Romania and India; and we are as comfortable co-locating their people alongside ours as we are working as virtual teams utilising webcams and collaboration tools. These varied approaches have allowed me to create highly effective diverse teams, operating seamlessly across multiple continents. We now track diversity across a number of measures. While IT can be acknowledged as one of the harder functions in which to create some aspects of diversity, our metrics show we have made meaningful strides in the right direction. I believe it is one of the contributing factors in our success in 2016. Describe how you organise and operate IT and how this aligns effectively with business strategy and operationsA combination of a maturing and increasingly confident IT function coupled with changing business priorities means I have reorganised IT this year. I have been able to remove our business partner layer as the business and IT teams now work well enough to engage directly and collaboratively on service and change delivery. In some cases this is working so well we are cycling key people through the IT team and implanting them back out within the business to catalyse change. As well as being more effective locally, we are becoming increasingly comfortable operating globally – our UK architecture team has defined the first set of digital technology standards for the group. Equally we are not afraid to adopt compliance standards set by the US, including embracing SOX standards! As a result our business engagement and delivery quality and efficiency across all fronts is at an all-time high. The team grows steadily in confidence and capability, and we look forward to driving change that continues to drive value for our customers and shareholders. What strategic technology deals have you made in the last year and who are your main suppliers and IT partners?I like to work with suppliers who can demonstrate they can work with us to a level of professionalism that our business and our regulator demands, but also demonstrate that they want to work closely enough with us to feel like they are part of the same team. I believe it is essential that we own our IT strategy and architecture, and provide strong and energised leadership. Beyond that we look to introduce suppliers and partners where we can construct deals that drive measurable business value. We are thoughtful about the deals we do, why we do them and the impacts they have on our risk profile. Through the last year we have done deals that introduce new technologies which automate repetitive work, reducing both error rates and staffing levels. We have entered into longer-term support deals that allow us to embed processes, build knowledge and drive efficiency. In addition we have not been afraid to terminate deals to simplify our supplier base, or where deals have not driven the business value we had all hoped. Where we terminate deals we have remained on good terms with suppliers. We work with a variety of suppliers across the entire range of the scale spectrum such that we can honestly say each deal closed is an upgrade on the one it replaces. What are your key strategic aims for next year?2016 has been a transformational year for us in IT. We have successfully delivered on our three-year strategy to give the business technology solutions that not only work well, but also act as a platform on which we have launched innovative solutions that enable business outperformance. 2017 is all about leveraging the growth platform we have built, and that broadly falls in four areas: Magnifying the improvements made in our first strategic cycle. Strengthening our engagement with the business in the UK to drive value through increasing the penetration of technology differentiators in our customer offerings. Extending our platform for growth overseas by transplanting our success stories and creating global operating models. Preparing to deploy against a full M&A pipeline. Against a backdrop of successful transformation this year, and with the strength of team and culture we have built, I am comfortable this year will show continued strong progress. And if we can have a little more fun along the journey, then so much the better. How are you preparing for any impacts Brexit might have on your organisation?We have completed scenario planning for potential Brexit responses, and update on a regular basis. We are keeping our organisation as flexible and agile as possible so we can respond quickly if/when required. The impact on passporting rights is an area we watch particularly closely. We are a US-listed organisation, so the impact of Brexit on sterling is a challenge for us. We are also monitoring the changing US political environment with interest. The potential impact on data privacy is already being debated here and I am sure elsewhere! YOUR ROLE When did you start your current role?January 2014 What is your reporting line?COO Are you a member of the executive leadership?Yes Are you a member of the board of directors?No What other emerging roles does your organisation have and what is their relationship to you?We have a chief digital officer, with whom I have an exceptionally close working relationship. How often do you meet with your organisation’s CEO or equivalent?Weekly through regular executive meetings and additionally as agenda requires. How many people at your organisation does your function supply services to?5,000 BUDGETS What is your annual IT budget, or your spend as a proportion of the organisation’s revenue?5% What percentage of your budget is operational spend (ie keeping the lights on) and how much new development (ie innovation, R&D, exploratory IT)?50: 50 CIO INFLUENCES Rank the following sources of advice/information in order of importance: CIO peers Consultants Analyst houses Industry bodies Media IT SECURITY Has your organisation detected a cyber intrusion in the last 12 months?Yes Are you expecting an increase in budget specific to security in order to tackle the cyber threat?Yes Does your organisation have a designated security professional – CISO or otherwise – and what is their relationship to you?Yes – they are part of my organisation. RECRUITMENT Are you finding it difficult to recruit the talent you need to drive transformation?No Has recruitment and retention risen up your agenda as a CIO?No Does your IT organisation operate an apprenticeship scheme?Yes How many employees are there in your IT team?120 permanent staff supplemented with contractors/consultants as required for project/specialist work. Are you increasing your headcount or planning to bring skills and the ability to react to needs in-house?Yes TECHNOLOGY Which technologies or areas are you expecting to be investing in over the next year? cloud data analytics/business intelligence datacentre/infrastructure/server security devices (mobile) devices (desktop) networking/communications. Which technologies or areas are you expecting to be investing in over the next one to three years? cloud data analytics/business intelligence security enterprise applications social. What emerging technologies are you investigating or expect to have a big impact on your sector or organisation?MI, BI and analytics when done right will continue to form an increasingly important foundation for our strategic decisions. THE EU Does your organisation do a significant amount of trade with the EU?Yes Does your department include technology staff from the EU?No Are you or have you been looking to the EU to recruit key skills?No