With the team assembled, it immediately began tentatively defining a new business model and then looking at the likely impact of required changes on the two businesses. Flowing from that came the understanding of the technology changes required if the program office was to deliver and benefits flow through to the business.
"The initial considerations were made at a relatively high level as far as what actually was going to have to change. You haven't yet got that fine degree of detail, but at that stage you have to understand the quantum of change you're talking about in order to be able to understand when you can deliver it, in order to understand when the benefits can flow through to the business," Issa says. "Flowing out of that comes technology requirements that need to be done to actually deliver."
With the quantum of that change now thoroughly understood, IAG has moved into the execution phase, which involves going into more detail on each of the proposed initiatives. Issa says so far the organisation has found the high-level estimates the program office came up with match pretty closely the ones generated after more detailed analysis.
"So we felt pretty good about the work that's happened over the last three to six months," he says. "I think it's because we had the technology people living with the business people in the one team: not toing and froing between the two, but having people sitting together and working together and actually being part of one team."
The initiatives will see IAG move to a single general ledger (SAP), which already runs at IAG; amalgamate data in MIS to produce certain management reports; merge the systems used to assess risk in insurance portfolios; and move the claims processing function from CGU into the IAG systems at the back end to take advantage of the many interfaces to suppliers which have been built there.
"We in IAG have built a lot of interfaces to our suppliers. For example, we've now got a lot of systems in place whereby when someone has an accident they can take photos of that accident, ship them off to us through the Internet, and we can assess those at our desk rather than having assessors driving around to all these different smash repairers. We've actually reduced the cost of our claims processing as a result of building all those interfaces to our suppliers - in this case, the smash repairers. I think in Australia, at least what I've seen of the general insurers, there's no one else that's moved into this area as quickly as we have," Issa says.
In the underwriting area, where risks of writing insurance are assessed, the program office determined that some of the IAG businesses understood the risks better than those in CGU, so Issa's group has had to implement a lot of the IAG underwriting rules within the CGU systems. "That entails, if you like, plugging in what we call our underwriting engines into their systems as well," Issa says.
At the time of writing, IAG was about to have completed basic implementation on the general ledger and risk management areas and was looking to a June 30 cut-over. It remains in the detailed design phases on some of the claims processing and underwriting engines, and expects to move into the coding phase over the next two or three months, with deliverables due over the next six to 12 months.
Issa says so far the initiative is tracking very favourably, but that the "rubber will hit the road" over the next six months. To ensure work progresses smoothly and effectively, the team has put a detailed tracking mechanism in place. Issa says close management of all the tasks is essential because the work has such a high public profile and because the organisation claimed strong synergy benefits would arise from the merging of the two organisations. "We're on track at the moment, but over the next six to 12 months as we move into full-blown execution, we'll start seeing whether we can deliver on the benefits we've identified," he says.
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