A Turnaround Project That Saved $300 MillionBy June Drewry | Posted 2002-06-17 Email Print
Veteran IT exec June Drewry says her cost-cutting efforts at Aetna showed the value of using profit statements to inform technology operations.
I can't imagine being anything but a chief information officer. You get to see the entire business operation. It's a birds-eye view of all the different pieces that make your company run, and you have an impact on everything that happens.
In financial services and insurance, technology is core to the business. We track payments and claims, factors that go into calculating prices. We are so much a part of the product that nothing can hit the streetsat least not for longwithout us having the system in place to support it.
The experience that shaped me the most as a businessperson was while I was at Aetna and we did a turnaround of the information technology organization. There was a chief information officer, but the actual operations were heavily decentralized with significant duplication. It was the early 1990s, and I was heading up Aetna's financial services IT organization, which was responsible for life insurance, annuities and mutual funds. Aetna's president at the time, Ron Compton, told us we had 12 to 18 months to turn the operations around and get value for the dollar. We cut known technology expenses from $900 million a year to $600 million without decreasing value delivered. That's an example of the 80/20 rule in actiondeliver 80% and don't waste your money on the other 20%.
We created technology as a business within a business, defining and determining our profit and loss for products and services. We had to get our expenses in line with outside benchmarks, or else we had to look at outsourcing if we couldn't provide a service cost-effectively. If you don't treat information technology as a business within a business, you deal with an awful lot of perceptions. When you allocate costs by some sort of percentage and do not charge for services based on usage, every business unit that pays for those services thinks it is getting ripped off.
I've had many mentors during my career, but my first one came after I was in the business for eight years. It was Chuck McCaig, Chief Information Officer at Mutual Benefit Life. He taught me the analytics. He had great communications skills, knew how to develop initiatives and establish priorities. He often said there are revolutionaries and evolutionaries, and he was an evolutionary. He was going to evolve the organization to constantly improve to meet business needs. He was a great teacher, great with people and was highly respected within the technology organization and by the executives on the business side.
My next mentor was Hank Kates, a business unit leader and my new boss at Mutual Benefit who later became CEO. Hank was intuitive. He would have a vision or a concept, and would start moving in that direction. When you presented him with an idea, you didn't need to convince him a hundred times over with facts and figures or a thousand spreadsheets. Hank also highly favored diversity within the workforce and his management team. He felt men and women do think and process information differently and that the combination was powerful. So when I joined his management team in the 1980s, I wasn't the only woman in a group of 10, as is usually the case.
Today the number of women in corporate technology is pretty equal, although it still depends on the area you are in. In data centers, you will still find more men than women. But in applicationswhich is where I mostly grew upthere's maybe even more women then men.
I come from a family of three girls, and my dad had always said you can be whatever you want to be. Others have said that if you behave as if you have the job, you will get the job. Sooner or later you will hit a wall or a fence, and you will have to back up and decide what you want to do about it. Is it the company? Is it a particular profession? Or is it me? But many women and minorities place fences that stop them from moving forward long before outside forces would stop them. We should be very careful not to stop ourselves. Written with Anna Maria Virzi
June Drewry is Executive Vice President and CIO at AON Corp., a Chicago-based insurance company. She's also worked at Aetna, Mutual Benefit Life and Lincoln National Corp.