CGU Insurance consolidates cloud CRM

CGU Insurance is building a new customer relationship management platform to replace three cloud-based instances deployed by various business units in recent years.

Linked gallery: Photos: Dreamforce 2012 in San Francisco

The company sells retail, corporate and workers compensation insurance products through a network of brokers and agents.

Its three business lines have separately deployed Salesforce.com customer relationship management (CRM) systems since 2009; CGU hopes to consolidate these by early next year.

CGU broker and agent division general manager Mark Searles said the company's three CRM systems were structured around the size of the end-customer, which created inefficiencies in how it dealt with its partner network.

The new Salesforce.com instance was built from the ground up and focused on its partners, instead of its products.

It was part of a wider “One CGU” transformation program, unveiled to investors in March and expected save the company $65 million annually by the end of the 2015 financial year.

“Before, with a silo-based business, what you tend to do is focus very much on what on the needs of the individual business areas are,” Searles told iTnews on the sidelines of the Dreamforce conference last week.

“What we do now is what’s in the interest of the wider CGU … We’re looking to put an enterprise version of [Salesforce CRM] in to satisfy all our needs across the organisation.”

Earlier this year, CGU chief information officer Ian Frew said the low barrier to entry for cloud-based solutions posed a challenge to IT managers because businesses units could deploy systems without involving the organisation’s technologists.

Frew told iTnews last week that One CGU aimed to clarify the insurer’s long-term strategy, establishing a set of objectives against which any project proposals may be measured.

“Where things go wrong is whether in the business or technology side, people start putting in systems or process that don’t take us in the final direction,” he said.

“If somebody says, ‘I now want to do this’, if that doesn’t fit into [CGU’s long-term] strategy, then it’s a very simple discussion as to why should we be investing in that.”

Addressing cloud concerns

Australian banking regulator APRA warned finance institutions against outsourcing or offshoring their core operations to cloud computing providers in an open letter in November 2010.

Salesforce.com currently serves clients in eight countries — the US, Britain, France, Germany, Canada, Japan, Australia and India — from data centres in the US, Japan and Singapore.

Despite establishing a private ‘Government Cloud’ for US Government organisations this year, the cloud vendor has yet to establish an Australian data centre to address local data protection concerns.

CGU’s Frew noted that the insurer stored “a very small subset” of its data in Salesforce.com’s cloud, including sales figures and key upcoming account renewals.

That data was displayed alongside locally hosted data in desktop and mobile Salesforce.com applications. CGU has deployed a fleet of 120 iPads to staff on the field in the past year.

Data was also replicated in CGU’s internal databases, so the company had a single, internal source of truth.

“The Salesforce database is highly secure,” Frew said.

“We’re not the first company in the world to use Salesforce; it’s passed through many checks from a variety of authorities.

“Only a subset is sent up to the cloud; that allows the [business development managers] to get very fast access to the relevant data.

"If they want to connect to anything else, they can still see it on their iPads but it’s actually coming from another source.”

Frew noted that CGU had developed an ‘integration competency centre’, tasked with connecting various internal and external systems through a services layer.

The insurer consumed its infrastructure, finance and HR platforms from parent company IAG but had “a couple of hundred” IT resources — including staff and partners — building CGU-specific applications.

“IAG has been using the cloud in one shape or form before it was called the cloud,” Frew said.

“While CGU has a significant technology department, that’s not the reason we’re in business — we’re in the business of providing insurance.

“What we should be looking at is the most cost-effective way of providing that in a sustainable way. If that means we use cloud-based services, we’ll use cloud-based services.

“At the moment, the best solution we see in the market for what we’re trying to do is Salesforce. To try and recreate that myself makes no sense.”

Besides the Salesforce.com CRM, CGU has also used the vendor’s cloud-based collaboration platform Chatter to communicate with staff across the country for the past year.

CGU also was considering extending the Chatter platform to its partner network but declined to disclose when that would occur.

Competitor Zurich Australia has been working towards deploying a similar “social business platform”, based on either Salesforce.com technology or a combination of Oracle and Jive, by next year.

Continue to page two to find out more about the One CGU transformation and how US bank Wells Fargo addresses regulatory concerns with a cloud-based CRM.

According to CGU’s investor presentation in March, the One CGU program would establish a “simplified, function-based organisation” with standardised, centralised systems and processes.

The insurer planned to consolidate not only its CRM, but also its claims and policy platforms. The transformation program kicked off in the 2009 financial year.

Chief information officer Frew said CGU had undergone a “significant realignment of all of our core systems” as part of the program.

He said a new claims platform, GuideWire, would go live “shortly” — in line with investor expectations of a 2013 launch.

The One CGU operating model was expected to save the company $25 million pre-tax in the 2013 financial year.

The transformation program was expected to cost $35 million pre-tax in the second half of the 2012 financial year and an additional $40 million in the 2013 financial year.

CGU said in March that the program would result in 600 job cuts in the three years to 2015, including 400 in the 2013 financial year and 100 a year in the following years.

Regulatory concerns

US bank Wells Fargo also used Salesforce.com’s cloud-based CRM to find, qualify and reach out to sales leads in its fixed income securities division.

When the bank converted leads to customers, it used custom integration software to replicate all relevant information about the relationship into an on-premises origination system.

All sensitive account information was stored and managed in the bank’s local master customer system, while contact details and information about further sales opportunities and their values were shared with other Wells Fargo divisions on the Salesforce.com cloud.

“Even though we pass all security and trust reviews, there’s still in some cases regulatory and compliance issues,” Salesforce.com’s Sales Cloud product marketing vice president Mark Woollen said.

“Whether they believe we can do it or not, some governments say, ‘you’ve got to hold on to the data, it’s got to be housed in our country, our jurisdiction’.

“In terms of jurisdictions, client data sits where it needs to sit, but parts of the sales process, relationship management, leads, opportunities management and content around products … they can do all of that in the sales cloud.”

Salesforce.com appears to have ceded some ground in its vision of a multitenanted cloud in recent years, announcing a data residency option last year and the Government Cloud for US agencies in April.

The company has engaged with Australian Government representatives — including the Office of the Australian Information Commissioner — about cloud computing.

But Salesforce.com senior vice president of public policy Dan Burton told iTnews that it “[did] not have any further announcements” on an Australian data centre or Government Cloud.

Burton suggested that the Australian Government should “take a hard look at the Australian private sector” when considering cloud computing.

In particular, he highlighted the Commonwealth Bank of Australia, which uses Salesforce.com’s CRM, ideas platform, Marketing Cloud, Service Cloud and enterprise social networking platform Chatter.

CommBank chief marketing officer Andy Lark delivered one of Salesforce.com’s key customer testimonials at the Dreamforce conference last week.

“That is a bank; they are very focused on trust,” Burton said.

“They are very focused on their reputation. They are not going to take actions that are going to damage that trust or brand.

“So I think they are going to have a very measured approach of how to use cloud computing.”

Liz Tay attended Dreamforce in San Francisco as a guest of Salesforce.com.