|November 13, 2000|
Homegrown CRM Apps Let Insurer Cater To Customers
USAA keeps development in-house to meet the needs of its military clientele
By Andy Patrizio
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USAA was founded in 1922 as an auto insurance company for military officers. It expanded into homeowners' insurance in the 1960s and children's coverage in the 1970s; in the 1980s, it set up its own federal savings bank. USAA now serves 4.3 million members of the U.S. military and their families. The privately held company ranks 217th on the Fortune 500 list, with more than $60 billion in assets.
Despite its size, personalized customer service remains a top priority. Its customers are equally loyal: More than 200,000 members have stayed with USAA for more than 40 years. USAA chairman Robert Herres is a retired Air Force general and for-mer vice chairman of the U.S. Joint Chiefs of Staff; he ensures that interaction between management and USAA customers retains a personal quality.
As USAA expanded over the years, it added new systems. But eventually, poor interconnectivity among these systems began to cause problems for customers, and that wasn't acceptable. As far back as the late 1970s, IT made an effort to cross-reference its databases to simplify information access.
"We were transferring a lot of telephone calls" to other departments, says Steve Yates, president of USAA Information Technology Co., the IT unit of the company. Multiple employees were making contact with customers to satisfy requests. "It costs a lot of money to handle a customer. It's also frustrating [for customers] to give their member [account] number over and over."
So, in the early 1980s, USAA built a customer-information file, a common database repository for member information. "In hindsight, that has proven to be one of the most fortuitous things for us," says Earl King, senior VP of business integration at USAA.
The customer-information file is accessed by customer-service applications in every business unit at USAA. That access simplifies the data-entry process when customers call for service.
With military determination, USAA assembled support for the database. A cluster of seven IBM Parallel Sysplex mainframes, running a combination of homegrown and packaged customer-service applications, sits at the hub of operations. It runs as a single system and provides failover to another mainframe within the data center when necessary.
The Sysplex cluster runs IBM MQSeries for messaging and retrieving data, and MQSeries Integrator to facilitate presentation of data to users who access information via a Web site. The data warehouse runs on a Tandem mainframe, while the Web sites run on Sun Microsystems' Solaris and IBM's AIX Unix servers. USAA has also deployed Windows NT and OS/2 as departmental servers.
Since CRM applications weren't available in the 1980s, USAA had no choice but to build its own. "We never thought there was anything out there we could buy, until recently," Yates says. The company now uses some packaged software, such as the Stars, the Shareholder Transaction and Reporting System mutual-fund management system from DST Systems Inc., and Phase3 from SunGard Data Systems Inc. for customer service in the brokerage area.
Although CRM vendors have approached USAA, so far the company is keeping development in-house because generic CRM packages would force it to give up a lot of personalization that members have come to expect. "We've tried to mold our business practices around our membership," Yates says. For example, "our systems have a lot of military terminology built in. Those are the things we've spent years building into our systems."
The systems also take into account the lifestyle of USAA's members. Military families often relocate, so systems are designed with frequent moves in mind. If a client is transferred and can't contact the company for several months, USAA will recalculate insurance rates retroactively. Any savings are credited to the customer for that retroactive period.
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Photo by Bill Kennedy
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