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Allstate, Quintiles Succeed With New IT Rulebook

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

Charles Babcock

September 11, 2012

7 Min Read

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. The app attacks and crowdsourcing tool have resulted in a change of thinking by many employees on whether they can have an impact on their work environment. "Seeing that culture change has been great," said Manzella in an interview after his talk. Too often, he said, "we as leaders forget to ask the people on the frontlines how to solve the problem."

In a second talk on the new IT rulebook, Richard Thomas, CIO of Quintiles, explained how his company produced a platform that helps any biopharmaceutical partner narrow down the selection process for the most promising compound to become a new medicine.

Quintiles has a massive database of identity-scrubbed data on 40 million patients that includes the outcomes of giving patients a particular medicine. Information culled from millions of electronic medical records gives Quintiles a database with hidden information on what might be the most promising drugs to pursue next. But someone has to query it with the right questions and follow up by investing in promising compounds.

The Quintiles Platform can be used by any company--one of its early adopters is Eli Lilly--to help design a compound that may counteract a condition or disease for a particular demographic slice of the population. One partner might be searching for the best drug to treat young men with epilepsy. Another might be looking for compounds known to have benefits (with minimal side effects) for women over 40 with diabetes. With millions of results in its database, users of the platform may design a lab test of a compound that is less of a blind shot in the dark.

"We help them trade off cost, risk, time, and predictability of success in designing a test," Thomas said.

To come up with good prospects for a laboratory test, where the compound itself will be tested, a company needs to know what the results have been for predecessor compounds in the same family with closely related chemical makeups. The question is never a simple one. Sometimes a particular compound is effective with a particular demographic--say, women over 40 living in a particular region of the world. And sometimes it's associated with bad side effects with particular population segments.

Testing compounds costs millions of dollars, and the more the sponsoring company knows about previous patient outcomes, the more likely it is to select the most promising substance for its next test. Quintiles will design software that helps a company make use of all the data, a process that has become a $40 million, custom-software business for it. And, said CIO Richard Brown, it has lead to $400 million in business engagements with users of its open platform.

Opening up the platform to many users, not just paying Quintile customers, was a big change in its business model, said Thomas, but it's paid off. What started out as a small staff of 10--six developers and four testers--has now grown to a custom software development team of 350, he said.

The result is "faster discovery of better medicines" and "better patient outcomes," he said. Under those circumstances, "We passionately believe in giving our ideas away," he added.

A third speaker on the changing IT rulebook was Lyndon Tennison, CIO at Union Pacific, which does 50 million pattern matches a day from sensors collecting data on its rail network. To read more about Union Pacific, see InformationWeek's story on Why Union Pacific Builds Its Own Tech.

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About the Author(s)

Charles Babcock

Editor at Large, Cloud

Charles Babcock is an editor-at-large for InformationWeek and author of Management Strategies for the Cloud Revolution, a McGraw-Hill book. He is the former editor-in-chief of Digital News, former software editor of Computerworld and former technology editor of Interactive Week. He is a graduate of Syracuse University where he obtained a bachelor's degree in journalism. He joined the publication in 2003.

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