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PMO leads IT revamp, gets a seat at the table

Hired to get a project management office up and running, Robert Golden ended up renovating and then running IT at Insurance House Cos. His secret weapon? Facts.

What can a project management office do for you? At the Insurance House Inc., a $135 million insurance carrier and reseller, establishing a project management office (PMO) led to a $3 million modernization of the IT platform.

The new technology infrastructure helped double revenue at the Marietta, Ga.-based firm, turning IT from an afterthought in the executive suite to a valued player.

"We introduced the technology component to Insurance House in a brand-new way," said Robert Golden, who was promoted from project management office director to CIO in 2007 after he successfully re-architected the firm's IT infrastructure. "We became co-strategists."

Golden's assignment when he joined Insurance House in 2002 was straightforward enough. Put a PMO in place so IT -- a shared service for the company's three businesses -- could keep better track of work. The insurance business had moved to the Web, pushed by companies like Progressive Casualty Insurance Co. and Geico Corp. Insurance House, then with $55 million in revenue, had some catching up to do.

Previous attempts to establish a PMO had met with "moderate to not-so-great success," Golden recalled, because there was no one place to check the status of projects. People were tracking work on spreadsheets; some were using Microsoft Project. And he was getting pushback from the business as soon as he walked in the door -- IT projects were costing too much, taking way too long.

"First, I needed a tool to load all of our work efforts and resources, so I could speak intelligently about the state of projects," Golden said.

His objective was to find a robust project scheduling tool. A fan of the ABT Workbench planning software, Golden found his way to CA Inc.'s Clarity PPM system, a sophisticated governance tool that would become the technology linchpin of the IT reinvention at Insurance House.

As Clarity was being installed, Golden took aim at a critical pilot project to deliver new point-of-sale functions to the company's independent agents. Insurance House had installed a fat-client tool on the agents' desktops, and "they loved it," Golden said -- but it didn't connect with any of the third-party tools that could be tapped to provide better insurance policy pricing.

As a result, Insurance House agents operated blind at point of sale, issuing policies on the basis of information provided by customers, only to have to redo the policy after driving records and other data required different premiums. When customers got the new prices, they'd often walk.

PPM kills project and makes millions

"We were, literally, not very agile" Golden said. The pilot, launched prior to his arrival, was going to fix that disconnect. But after feeding all the project information into the Clarity system, it became clear the job could not be done. Golden called meetings with the CEO and COO.

"It was not happy news, and not the kind of news that somebody who had been there for only 18 months would normally deliver," Golden recalled. "I was not a popular person, but I was standing on facts, because I was able to use [Clarity] to 'what if.'"

In fact, the tool allowed Golden to show that even if he handed the project 10 more developers, it could not be finished in the time frame the business wanted. "We were going to be just in time to be late for what the agents actually need," he told the business. Killing the project paradoxically gave IT credibility with the business, emboldening Golden to make a radical proposal.

Insurance House was on an older AS/400 platform -- great information, but there was no easy way to access it and integrate information at the point of sale. Golden proposed modernizing the AS/400 to speak Web language.

The establishment of a PMO basically turned into something called the Agile Architecture's Initiative, where every piece of the infrastructure was replaced or modernized, from the policy administration system on the back end that did the insurance ratings to policy issuance and claims. IT put in portals using SharePoint 2007, built a new data center, added data warehousing and data modeling products, and installed Clarity, using it for financials and portfolio management as well as project management. Standardizing the technology platform also paved the way for three acquisitions, helping the company grow from $55 million to $135 million.

"We literally reinvented the business," Golden said. Initially a lot of the change management was led by Golden -- "I spent a lot of time educating," he said -- but soon partnerships were forged with business units and human resources to get people on board with the new processes.

Spending between $2.5 million and $3 million on IT may not be much for the Allstates and Progressives of the business, but for Insurance House the investment was big, Golden said. Even bigger was the change in how the business regarded IT. In the past, the business units would go off to a retreat to plot strategy and come back with a list of to-dos for IT. "Now you had the tech guys leading the strategy retreat," Golden said.

Steve Romero, CA's newly appointed "IT governance evangelist," was hired as a "product agnostic" expert to promote process-driven technology. He said the radical transformation that sprang from a PMO and the project portfolio management (PPM) software at Insurance House is uncommon. But it offers some useful pointers for CIOs hoping to get the business more involved in project management.

"You need to find the quick win, to prove a value as fast as possible. That can be the seed to foster other governance mechanisms," Romero said.

Most PMOs are born in the IT department, Romero said, not because that's where they belong but in response to the work pouring in from multiple masters. "It is a matter of self-preservation," he said. "My fervent wish is that the enterprise recognizes quickly that PMOs are an enterprise business process, rather than an IT process."

We literally reinvented the business.

Robert Golden, CIO, The Insurance House Inc.

There is some evidence that is happening, Romero said, citing a recent survey from the Information Systems Audit and Control Association, an IT governance association. The findings show that some 43% of organizations have killed IT projects before they were implemented because the business needs had changed or the project did not deliver as promised. The results, seen by some as bad news, are a good sign in Romero's view, because they show the companies have mechanisms to identify bad projects.

Forrester Research Inc. analyst Lewis Cardin, who covers project and portfolio management for the Cambridge, Mass.-based firm, said in a recent report that the value of project portfolio management is providing "a continuous process feedback loop" by which IT management absorbs and prioritizes technology-related demand and works with business stakeholders and allocates its funds and people to deliver the expected results. He rates CA and Planview Inc. as leaders in the field.

The need for this consolidated planning and execution is shown by the growing number of PPM players in the marketplace, by the increasing adoption of PPM by business as demonstrated by the growth in PPM licensing, and the largely positive results that are being reported by organizations that have implemented PPM tools, Cardin said.

PPM tools are important to enterprises, particularly in a downturn, because technology demand outstrips capacity to do the work. "Meanwhile, enterprises need to deal with the paradox of increased complexity in the stewardship of their technology dollars while responding to the desire for higher transparency -- the essence of what modern governance is all about," Cardin wrote.

Let us know what you think about the story; email Linda Tucci, Senior News Writer.

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