The Problem
With a net worth of $50 billion, Chubb Insurance (www .chubb.com) is the 11th largest property and casualty insurer in the United States. Rather than being guided by an overall vision, Chubb had, over the years, implemented its information systems on an ad hoc basis. Every business unit within the company had its own information systems and information systems plan. Chubb was therefore faced with the task of learning which information systems functioned most effectively at the corporate level and which ones performed best within the individual units.
The Solution
Chubb's senior corporate IT leadership determined that the company needed an overall strategic IT plan to make its information systems more effective. After meeting with IT leadership in each of the business units to hear different perspectives on how such a plan could be implemented, they selected a team to implement the overall strategic plan. The team was composed of leaders from IT and from the company's business units.
Team members spent a great deal of time with IT managers in the different business units, explaining why a federated architecture was so important to Chubb. A federated architecture is an IT strategic plan that clearly distinguishes the functional responsibilities of corporate information systems from those of the individual business ISs while promoting collaboration and information sharing among all of the systems.
Chubb based its federated architecture on The Open Group Architecture Framework (TOGAF). TOGAF is a framework for planning, designing, implementing, and governing an enterprise's information systems.
The team compared the overall plan for Chubb's portfolio of applications with a city plan. Applications are linked with "city blocks" that represent Chubb's business capabilities (e.g., marketing and sales, claims, etc.). All new information systems projects must obtain a "building permit" to ensure that they are following corporate standards and are not duplicating other IT efforts, either at the corporate level or in other business units. If an employee wants to use a technology that is nonstandard at Chubb, then he or she needs to request a "variance."
Business-unit review boards enforce corporate IT standards at Chubb for new applications within each unit. Each board scrutinizes new applications for certain characteristics, including efficiency, value, a focus on the needs of the business unit, and funding.
The Results
The strategic IT plan and federated architecture model have provided many benefits for Chubb. Because Chubb's plan and architecture demonstrate how data, technologies, applications, and business capabilities fi t together, IT leaders in each line of the business can communicate with their non-IT business colleagues about where and how IT is investing in the capabilities they need. This process has increased IT's credibility because managers have confidence that Chubb is selecting the correct technologies to match their business needs.
The strategic IT plan also helps to identify opportunities to share common tools and processes across lines of business. For example, in only one year, Chubb saved $600,000 by redistributing unused site licenses for software. Using its strategic IT plan and federated architecture, Chubb is able to quickly make decisions about new products that result in large savings and quick launch-to-market time.
Question
1. Review the section in Chapter 1 on Managing Information Resources. Based on your review, which information systems capabilities should Chubb keep at the corporate level? Justify each one.
2. Based on your review, which information systems capabilities should Chubb keep in the business units? Justify each one.