Guardian Goes It Alone With Insurance Processing System

When the IT department at Guardian Life Insurance Co. decided to install a new life insurance and annuity administration application in 1999, the project seemed to have all the ingredients for success.

The plan was to replace a 30-year-old legacy batch system with a new online system that would allow users to create, view and modify database tables in a real-time environment. The application, Transcend, had just been sold by its former vendor, TriMark Technologies Inc., to Pleasanton, Calif.-based PeopleSoft Inc., and a pleasing new product road map had been laid out that would help Guardian add much-needed capabilities.

With PeopleSoft's bold commitment to an improved Transcend, Guardian decided to move ahead. It deployed the existing application temporarily, modifying it to work with its IT systems until it was time to move to the revamped PeopleSoft release, says Shelley McIntyre, a second vice president of business services at the New York-based mutual life insurance company.

But then things came unraveled. PeopleSoft decided to drop its plans for an update, and Guardian was left with a shaky IT strategy. The options were clear: Either stick with Transcend, which Guardian's IT department was already updating, or start over with a new product.

"That's when we realized this wasn't a temporary solution anymore, but the one that we wanted and the one we wanted to go forward with," McIntyre says.

By that time, even another application from a new vendor would have required customization work. So it made more sense to stick with what they had, McIntyre says. "It was probably the biggest challenge the team had ever been given," she says.

In just 19 weeks, the 40-member team had to implement the system, create the software interfaces to make it all work and get the new application ready for the company's employees. The hardware and software costs totaled about $2.2 million, not including staff time, McIntyre says. "Other people in the company named the team the No-Way Team," she says. "People thought it wasn't possible. But the team did it."

Shelley McIntyre, Guardian Life
By going it alone with a product that no longer had vendor support, Guardian's IT staff had to build its own expertise—a strategy that had mixed potential. "You've got control over your own destiny for sure," McIntyre says. "I don't think anyone outside the company thought we could do it. But the business team and the IT team thought we had to do it."

Guardian installed the first version of the system in 1999. Since then, the IT team has phased in new features and capabilities, including the ability to conduct Web transactions. Today, about 57 brokerage firms use the updated application to sell their financial products. "It's one standard interface that all the outside broker dealers can use," McIntyre says.

One huge benefit is that the new application allows Guardian to launch financial services products in 90 days, rather than the six to nine months it took with the original software, she says. "We made a huge impact on the business, that's for sure," McIntyre says. The move has also saved 40% on back-office costs. "It was hugely successful," she says.

Guardian Life Insurance Co.

Business: The fourth-largest mutual life insurance company in the U.S., Guardian has more than 5,500 employees and more than 2,800 financial representatives in 94 agencies. It supplies employee benefits programs to 5 million participants.

Project champion: Shelley McIntyre

IT department: 398

Project payback: New financial services products can be launched in 90 days, and back-office costs were reduced by 40%.

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Copyright © 2004 IDG Communications, Inc.

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