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9/11/2012
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Allstate, Quintiles Succeed With New IT Rulebook

Leaders tell InformationWeek 500 attendees how crowdsourcing, data mining, and hack-a-thons have boosted IT's value to the business.

In the hands of Allstate's Matt Manzella, collaborative computing and the wisdom of crowds have become a powerful force for change at the insurance company, according to a "Pages From The New IT Rulebook" session at the InformationWeek 500 Conference in Dana Point, Calif.

Five years ago, Manzella advocated Allstate establish the post of director of technology innovation. CIO Cathy Brune agreed and gave him the job. His first step was to establish an Innovation Lab where any employee could stop by an open office--no cubicles--and suggest a way to do something differently.

At first, one of the main results was that he and his staff ended up with was a lot of "orphan ideas" that no one claimed responsibility for. As he tried to equip his lab as a more comfortable place for employees to sit down and talk, he was told he could only have the standard Allstate blue office chairs because once his lab failed, they could be easily used elsewhere.

Manzella's small staff also generated bare, prototype systems and handed them off to business units as skeletons of a solution to a problem. But business unit management frequently didn't accept the offerings. "We didn't have anything to do with this," would be the feedback, and instead of being fleshed out as a functioning system, the effort would die on the vine for lack of attention.

[ Want to learn how collecting big data can help keep the trains rolling? See Union Pacific Delivers Internet of Things Reality Check. ]

One of those groups most resistant to change was the claims department, noted Manzella. Hard-pressed clerks and claims adjusters had little time to experiment with changes in their processes. Then Manzella and his staff spotted the high incidence of complaints from claims adjusters on how a backlog of work piled up whenever they went on vacation or took a few days off. It seemed like a minor thing, but the existing claims process had no means of disrupting the usual flow to adjusters, so their angst built up before they departed and, once back in the office, they fretted about the difficulty of catching up.

The Innovation Lab called for a solution in a 10-day blitz, using its online crowdsourcing tool to allow employees to make proposals and vote on the ideas they liked the most. A new claims process was voted to the blitz's forefront, and the lab produced a lightweight prototype. The process steered claims around the absent adjustor, better meshing claims flow with individual departures and returns.

The claims department fleshed out the prototype, and its implementation a year ago is estimated to have saved $18 million in reduced time spent in meetings between claims assigners and adjustors and reduced errors associated with claims processed after vacations, said Manzella.

The Innovation Lab's wisdom-of-crowds tool now hosts 20-30 online blitzes a year, and many employees participate. In one blitz, the CEO congratulated an employee who contributed a problem-solving idea. His email, circulated to employees throughout the company, told "John" that the CEO hoped his idea would be implemented soon in his business unit.

Manzella said Brune's replacement, Suren Gupta, quickly supplied more support as he took over the CIO's office. At one point, he circulated through the company cafeteria asking random employees if they had contributed to the current blitz.

"I don't think you can do this without top management support," said Manzella in response to a question at the conference. Contributors whose ideas are adopted get recognition in the form of Innovation Ninja pens and are awarded points that can be spent in an Allstate store for such things as game consoles.

An Innovation Council has been set up, comprised of top executives who review the results of blitzes to see if the leading ideas have been adopted by business units, said Manzella. There's even an Innovation Posse, rounding up the good ideas that didn't make it to the top of the pack, but are still worth the effort of trying to find employees to work on them, while continuing to do their usual jobs, of course.

Allstate also stages hack-a-thons, known as Allstate App Attacks, where programmers compete for prizes by coming up with a new business system over the course of a two-day weekend. The company now holds four such events a year.

With these techniques, Allstate has collected 4,000 ideas from 20,000 employees over the course of the last year. It's implementing 100 of the ideas.

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