Insurance company MetLife was on the verge of committing to acquire Travelers Life & Annuity from Citigroup for more than $11 billion when on Jan. 30, 2005, about 30 top executives gathered at MetLife's Long Island City, N.Y., offices for a go/no-go meeting on what would be the insurance industry's largest merger of the year.
MetLife executive VP and CIO Steve Sheinheit and his due-diligence team initially estimated the time required for integrating the two companies' technology at about three years but had managed to crunch it down. Feeling confident in his negotiating position, Sheinheit told MetLife CEO and chairman Bob Benmosche that the job could be done in about 18 months.
Sheinheit was months behind before he even started.
Photo by Sacha Lecca
Sheinheit reminded Benmosche that MetLife's IT organization freezes most IT work in the last weeks of the year in preparation for year-end financial processing. "It would be pretty risky trying to complete the integration in that last month of the year," the CIO said.
"You're right," Benmosche conceded. "Do it by November."
As Sheinheit drove home that Sunday afternoon, the "it" he had to accomplish in nine months was the absorption of the 4,000-plus-employee Hartford, Conn., company's IT systems, from infrastructure to desktop computers to business and policy-processing systems. The initiative would involve more than 600 IT applications and offices and facilities in 88 locations, both domestic and worldwide, including five countries where MetLife previously had no presence. To complete the project, Sheinheit would have to supervise seven project-management offices, one oversight project-management office, and 50 integration teams.
Among several principles guiding Sheinheit's task was "One MetLife," which emphasizes seamless functionality among the company's business units and a common look and feel companywide for business processes and IT systems. That principle has driven intracompany system and organizational development over the past few years.
As a result, there was never any question about what the organizational structure or IT environment of the MetLife-Travelers combination would look like, says Douglas Barone, the MetLife VP who ran the project integration management office overseeing the merger. "There wasn't going to be an entity called Travelers when this was over," he says. That thinking and the tight schedule drove the determination that, with few exceptions, the IT systems that would survive the merger would be MetLife's.
Sheinheit's team essentially was months behind before the integration work even started. In the period between MetLife's announcement of the acquisition on Feb. 1 and its projected close date of July 1, a number of technology milestones had to be met. A significant amount of work had to be completed during the time when MetLife did not yet own Travelers, and concerns about jobs expressed by Connecticut politicians and others threatened to complicate the process. Moreover, according to sources close to the action, at a time when cooperation was most needed, the atmosphere at Travelers often was hostile.