March 6, 2000

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The New Economy:
New Era For An Old-Line Business
Financial-services companies are competing in an expanding marketplace that affects IT leaders as well as CEOs, presidents, and chief operating officers

By E.P. Rogers

ith dozens of dot-com companies entering the business world each month--and many making a splash in the public markets--it's easy to think that technology is critical to a company's business objectives. But is that always the case? In today's new-economy environment, how are old-economy businesses keeping pace with the changes that affect a variety of industries?

For CIOs, chief technology officers, and their IT organizations to provide value to any business, they must be integrally involved in the way decisions are made at the top. In a world in which E-business dominates the corporate landscape, IT's involvement is crucial in strategic business plans that focus on how financial performance goals will be achieved and how customers will be provided with products or services that meet their needs. For the financial-services industry, this is truer today than ever.

Financial-service providers are competing in an expanding marketplace. The repeal of Depression-era legislation that kept banks, insurers, and brokers apart; the changing way in which average consumers invest their money; and the rising expectations and demands of consumers are just three issues that affect IT leaders as well as CEOs, presidents, and chief operating officers at financial-service companies.

Recognizing these changes, the Mutual Life Insurance Co. of New York in 1998 completed an extensive transformation that required significant IT support. It went through a process known as demutualization, whereby the mutual insurer became a publicly traded stock company, the MONY Group Inc. The key benefit of this changeover was increased access to capital, which would be used for acquisitions and to benefit our customers and shareholders. The IT challenges involved in the transformation included changing the company's name in 21 million lines of code, launching a new product platform, developing 15 new products across various lines of business, and calculating how many shares each of the company's approximately 800,000 policyholders would receive after demutualization was completed.

There is a saying that CIOs are being brought out of the back room and into the boardroom. At the MONY Group, this means frequent interactions with the president and chief operating officer to carefully define how the company will meet the challenges imposed by an increasingly competitive financial-services arena. Simultaneously, it means maintaining the view that technology must be used to enhance our customer-focused company.

Overall, CIOs should be asking themselves the same questions as the rest of senior management: How are you going to improve value for shareholders? How are you going to increase your consumer base and keep the customers you already have? How are you going to improve communications and operations within your distribution channels? How are you going to integrate an E-business strategy into your operations, including customer service? IT departments must find the answers to these questions.

A tight connection between technology and business enables a CIO to provide a vision for the organization. The MONY Group has a credo, "A Business Partnership Focused on Results," which is a key message for our IT department. Each IT professional needs an overall vision to help him or her remain focused on the top priorities.

At the same time, a CIO needs to be aggressively efficient when it comes to managing vendors. Selectively outsourcing projects and hiring contractors to work on tasks that don't make sense to keep in-house are efficient ways of moving projects forward while containing costs.

All of these factors--tying business goals to technology, maintaining an awareness of these goals, and communicating them to your IT staff--are keys to success in the new economy. To truly provide value and generate a return on investment in the company, today's CIO needs to ensure that he or she is not just providing superior technical support, but is helping a company get from point A to point B. There's that vision thing again.

E.P. Rogers is VP and CIO of the MONY Group Inc., a financial-services company in New York. He is a featured speaker at the InformationWeek Spring 2000 Conference, which is being held March 5 to 8 at Amelia Island, Fla. For more information on the conference, point your browser to informationweek.com/events.

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