Grinnell Mutual Tackles Massive Transformation -- in Stride
Bill Sinn | October 04, 2019
When you undertake massive change in a large organization, challenging the norm may not appear to be the logical choice. For Roby Shay, CIO and VP of the Enterprise Solutions division at Grinnell Mutual, challenging conventional wisdom was not only the best approach, it was the only way to succeed
Shay joined Grinnell Mutual in late 2015, and has been a champion of, and catalyst for, change. His style of leadership? Original – yes. Unorthodox – definitely.
Located in Grinnell, Iowa (about 60 miles east of Des Moines), Grinnell Mutual has been in business for 110 years. It is the 110th-largest property and casualty insurance company in the United States and the largest primary reinsurer of farm mutual companies in North America. Its products are available in 19 states, and it offers direct lines of insurance through a network of more than 1,700 independent agencies.
The challenge for Grinnell Mutual was adapting to rapidly changing business demands while honoring its commitment to serving mutual members, agents, and policyholders. Most of the legacy IT systems at the company were homegrown and antiquated, using an iSeries-based policy administration platform running on COBOL. Originally deployed in the 1990s, this legacy system had expanded, not just in size, but into a troublesome tangle of programs that were intertwined but not integrated.
“We were spending an inordinate amount of time just supporting our legacy systems,” says Shay. “About 70-80% of the IT staff’s time was devoted to keeping our systems up and running. This, combined with difficulty in finding COBOL resources, was putting our business at risk.”
Complicating matters was the organization’s sometimes fractious relationship with the IT department. “We were perceived as a black hole,” he says. “We had capability gaps. We lacked quality assurance (QA) and IT architecture functions. The business area — not fully understanding the constraints the division worked within — was not confident in IT. There were many who were afraid we just couldn’t get things done.”
Choosing the Right Partner
According to Shay, Grinnell Mutual needed to start from scratch. It needed a platform that could handle policy administration, claims management, underwriting, rating, client data management and analytics.
Shay and other stakeholders began looking for a vendor to provide a comprehensive platform that offered a fully integrated suite of products that would improve operational effectiveness, efficiency and customer service. The project team reviewed research from industry analysts like Gartner and Novarica to narrow down the list. Eventually, it came down to one name – Guidewire.
“People, process and technology are important,” says Shay. “But choosing the right partner is critical. Guidewire’s vision, focus on the property and casualty business and product maturity made the decision easier. We were thrilled with how the whole Guidewire organization was aligned behind its corporate strategy, and we spoke with a number of customers who were implementing Guidewire projects. We were impressed with what we heard.”
“This is the largest organizational transformation we have ever undertaken,” adds Shay. “So, it was extremely important that both business and technology stakeholders were involved in the decision-making process.”
Lauren Augustin, VP of Product Transformation and Delivery, became one of the executive sponsors for the project from the business side. In that capacity, she quickly became a key champion of change management at Grinnell Mutual. Together, she and Shay have helped reshape the existing infrastructure of the company and fine tune its capabilities – and competitiveness.
Augustin was equally impressed with Guidewire leadership, especially when Marcus Ryu, Guidewire’s CEO at the time, came on-site to discuss the transformational journey. “He was very open about the complexity,” says Augustin. “Marcus explained how this type of all-encompassing project can be the most difficult, but at the same time, the most exciting one of our careers. Lots of effort, lots of rewards. The key was to set the right course for the company, and to help keep it on the path to success.”
Making the Connection
Grinnell Mutual’s implementation project, internally called CONNECT, became a business-led technology initiative to remake all of the company’s business interfaces by replacing its previous systems with Guidewire InsurancePlatform.
“We are literally changing everything,” adds Shay. “Our digital portals. Our document management platform. Our analytics platform. We have over 50 third-party integrations to contend with. It’s a massive amount of change.”
Nearly 200 people are involved in the project at any given time –70% in IT and 30% business users. The project is divided into five phases. Phase 1 started in 2016 and culminated in the launch of Grinnell Compass, a new underwriting company that offered a new, more sophisticated auto insurance product in Pennsylvania -- a new state targeted for business. It also included Grinnell Mutual’s home product.
Phase 2, under way now, focuses on implementing the remaining personal line products in Pennsylvania and Phase 3 will be full conversion of all personal lines across Grinnell Mutual’s writing territory.
So why launch into a new state instead of converting existing business? Shay mentioned there were two positives to this approach.
“First, since this was a new state, we did not have any conversion challenges,” he says. “That helps mitigate the risk of a new platform and offered us a greenfield to test and learn. Second, we were able to set the stage with our agents, get their feedback and make any necessary adjustments. Our agents are a critical part of the process and they’ve been invaluable in helping us get it right.”
The main objective was doing things right. But in a project of this size, flexibility was also a critical factor, especially when the company made the decision to change direction -- mid-stream -- and migrate the implementation to the Cloud.
“Our initial decision was to self-manage the Guidewire platform using the traditional, on-prem framework,” explains Shay. “When we were well down the road, we decided to switch gears, and migrate to the Cloud.”
Shay says the Cloud offers a number of opportunities. It means the difference between IT staff performing high-value tasks vs. patching servers and handling other maintenance. “Also, as an early adopter to the Cloud, it gave us greater access to Guidewire. We have been able to share feedback directly with Guidewire, which helps mature the service on their end and allows us to build in the functionality we need on our end.”
Shay describes himself as an “unconventional wisdom guy.” He wanted Grinnell Mutual to own the project across all roles from the get-go. “I did not want an outside firm to run the project. I wanted our own people to manage the process with the help of Guidewire. This allowed us to get a hands-on understanding of the system and how it works. We maintained control.”
What were the biggest challenges of this project?
“I believe our biggest challenge was the struggle to think differently,” says Shay. “Most people are very comfortable with the status quo. It’s the old adage of ‘that’s the way we’ve always done it.’ We needed to be a catalyst not just for technological change, but for cultural change, too. Technology may be hardware and software, but at the end of the day, it’s about having the right people. We’ve worked to make sure we had the right talent, with the right skills, with the right mindset, to accomplish something we had never done before.”
Transparency is also key to the project’s success, and is core to Grinnell Mutual’s business model. Project managers held weekly status reports, keeping everyone up to date with changes, issues, and obstacles.
Augustin also credits a new business excellence program that helped produce results. It was a program initiated by the company’s vice president of Talent Development, who had a manufacturing background.
“It helped the team uncouple from our legacy systems by learning from the inefficiencies of the past to build the future,” says Augustin. “It helped us write better requirements and enhance the usability of the system.”
Support from upper management and the board of directors was just as important. “Our board meets six times a year and during each session, we provide an update with full details on how the project is shaping up. Of course, we hit some rough patches early on, but the feedback has been very positive. We were thrilled when we received nothing but support.
“Just remember that this type of project will always take longer than expected and be more expensive than you predicted. But if you stay the course, do it right, and finish the journey, all the stakeholders in the organization will be greatly rewarded.”
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