To support more ambitious growth, CIO Dave Keith led the internal development of a new paperless processing platform, based on a distributed Unix and Oracle environment, incorporating rules-based homegrown applications plus some third-party workflow and imaging toolsets.
“We were trying to meet customer demands, for example to provide data to the end customer the way they wanted to see it,” Keith explains. “But we were also able to put new products out in four months or less, versus over a year with the old system,” he adds. “We saw our cost per annuity contract drop as much as 50 percent even while transaction volumes went up 50 percent. We’d picked the right tools and architecture … it was a high-performance solution.”
By shutting down the legacy system and retiring 14 apps, Keith shrank IT from 140 to 80 people, freeing up more resources for innovation and cutting overall IT costs by 40 percent. More significantly, recalls Keith, even though Security Benefit was growing quickly, “The new infrastructure was barely breathing. …We had so much capacity and the processing was so fast it didn’t seem to stress at all.”
“We realized we’d done something really innovative,” Keith adds, explaining his decision to ask senior management for permission to try selling the internal processing capabilities to external customers — potentially, even Security Benefit competitors. “The company was looking for additional ways to bring revenue, and we knew in our industry that sooner or later others would get there. So the question was, ‘How do we take advantage of what we have now?’ ”
With the blessing of CEO Chris Robbins, who Keith explains “always says we should be thinking boldly and challenging norms,” IT in 2004 assembled a small group to assess the potential market and write a business plan. The team included such business-side experts as the head of the company’s service operation, “who had very good understanding of the processing we’d need to do,” Keith says. “Everybody saw it as good opportunity to explore, but nobody thought it was a no-brainer,” he recalls.
In 2004 the plan was approved and the company’s IT department became the se² business unit, including a team that went into the field to start selling. Today se², with 150 employees and Keith as president, maintains all IT services for Security Benefit, and offers an array of third-party contract and policy administration services to external customers, including servicing, call handling, back office and payment processing, pricing, compliance, document management and storage, and offshore workflow management.
With new clients on board, se² is now officially a success — administering $34 billion worth of contracts and policies, Keith notes, of which Security Benefit represents $16 billion. “We’re growing our non-Security Benefit business at a very rapid rate,” he adds.
Keith cites a few factors as critical to the venture’s success, including the initial burst of confidence and momentum than came from building the new platform. “IT rallied,” he says. “We realized the only way we were going to improve as an organization was if we took charge, took the accountability and fixed it. There’s a renewed energy now.”
Using IT staff to sell the new services rather than hiring others to sell it was also a good idea, Keith explains. And in 2002 the company realigned its service operations to report through IT, “so we started to see more collaboration and synergy, the two groups sort of blended together,” he adds.