The Sky is low the Clouds are Mean... Transformation through Technology

By Feroz Merchhiya, CTO, Director of Technology, CIGA

Feroz Merchhiya, CTO, Director of Technology, CIGA

Today when companies like Google (Alphabet), Oracle,, and Amazon are in the news, most technology-related conversations ultimately turn to the cloud. These conversations about “Anything as a Service” remind me of the early-2000s infatuation with Nano technology. Kevin Kelleher of “Time” in his recent article, “Here’s Why Nobody’s Talking About Nanotech Anymore,” captures the frenzy nicely. I feel that we may see a similar ending to this iteration of the cloud as well: companies with a true value proposition will establish themselves, while others that are the products of marketing hype and that don't have a solid differentiator will end up in the technology bone yard. I say this because the cloud is not a new concept. Just look at one such story by Dan Gillmor of Mercury News during the first dot-com era: “1996: Q&A with Larry Ellison and Ray Lane”. In this Q&A, Larry talks about the Network Computer or NC, “a device that hooks up to a corporate network or the Internet but doesn't store anything itself.” By the time I joined Oracle in 1998, NC seemed to be fading under the bright lights of dot-com. Today we are in the middle of a similar frenzy. Against this backdrop, we will discuss what the cloud is and how I look at the cloud in my day-to-day strategic and tactical decisions.

My former colleague Robert Karel, Vice President of Product Strategy and Marketing, Master Data Management at Informatica, recently wrote a nice blog post titled, “The Cloud, So Mom Can Understand”. Rob very effectively describes the cloud; he says, “'cloud' in cloud computing is just a metaphor used to market a technology trend. But what does that metaphor represent, and why is it such a big deal?” He goes on to say that “cloud” represents technology capabilities that are no longer installed and managed onsite within businesses or homes (e.g., “on the ground”). Notice the similarity to the comments made by Larry in 1996.

With diverse definitions and all things considered the simple idea of cloud computing becomes complex and fairly involved, contrary to what some of our esteemed cloud vendors would have us believe: “Have a credit card, we will cloud compute.” So how do I look at all this as a technology leader tasked with architecting and delivering technology solutions in an agile and efficient manner with the ability to quickly adjust to changing demands? I draw from the above-mentioned historical case studies and current realities. One non-technology discussion that has always been the basis of my approach is the one I had with my brother architect, Hanif Daud. I asked Hanif, who is an award-winning international architect, about his design philosophy. A few things in his response resonated with me. For any built environment to be effective, context is important, and form follows function. If what Hanif is saying sounds familiar, you are correct: "form follows function" is one of the most famous principles of modern architecture.

You may ask how this non-technology discussion applies to what I do. Well, context is very important. One has to understand and align with the vision and strategic objectives of the organization. This provides a context necessary to deliver the value that the organization expects from the technology investment. Organizations exist in a dynamic environment; therefore, this strategic alignment must be an ongoing activity of calibration and recalibration followed by measurement. In the case of enterprise technology, “form follows function” makes perfect sense. For enterprise technology to deliver true value as an enabling capability, technologists must appreciate and understand business processes. They must design technology solutions that can be incorporated into various business functions in a natural and nonintrusive manner.

Allow me to share our interpretation and implementation of the concepts and approaches I mentioned above. First we have to understand what the California Insurance Guarantee Association (CIGA) is. What were the ground realities when we started our cloud and IT transformation journey?

The California Insurance Guarantee Association (CIGA) was created in 1969 by California legislation. CIGA assumes claim responsibilities of insolvent insurance companies for California policyholders. CIGA paid out in excess of $1.4 billion, an average of approximately $280 million per year between 2007 and 2011 compared to an average of $51 million in prior years.

Running on a legacy technology, we were in desperate need of a complete transformation to meet the high demand. In 2012 our journey of transformation through technology began. We would not have succeeded without the support of the executive team. For transformation there were no sacred cows, and everything was open to a critical evaluation to make sure the existing assets and structure had a rightful place in the future state. The transformation plan included short- and long-term initiatives, including stop-gap measures. A good example was the work that CIGA IT did to migrate some of our legacy applications from the existing managed service provider to a new managed service provider while working on its long-term strategy to minimize business disruption.

“A good example was the work that CIGA IT did to migrate some of our legacy applications from the existing managed service provider to a new managed service provider while working on its long-term strategy to minimize business disruption”

Our journey began with the development of a plan. A plan grounded in reality is essential. The plan must reflect the right transformation clock speed. There were three basic components of our plan.

• Clearly state IT organization’s priorities “Efficiency, Agility and Architect of Change” these in turn will align IT with CIGA’s strategic objective.

• Define a transformation maturity model. We developed a model that best reflected our current state and future objectives. This model provided a simple phased approach to transformation with a goal to solve for both short- and long-term needs. The key phases of our transformation are Infrastructure Focus, Application Focus and Business Focus

• Define the right cloud for our. We realized that we were faced with a “paradox of choice”, to quote American psychologist Barry Schwartz. Nevertheless, selecting the right cloud was the foundation upon which the rest of our strategy depended. We determined that a Hybrid Cloud and full Virtualization would optimally satisfy our business and IT priorities.

As the adage goes, "What gets measured gets done." Highlights of our success so far, as measured against benefits criteria set in the maturity model, are that we realized a reduction in the physical infrastructure footprint by 75 percent, a storage savings of 50 percent by utilizing a new copy data management solution, and 56 percent in annual savings from resource re-alignment, to name a few. It is safe to say that in the case of CIGA, it was not really a matter of either/or; it was a matter of “right cloud” that is both public and private.

Parting thoughts: Change is difficult; to manage a transformative change is highly disruptive, requiring changing roles, responsibilities, and deeply ingrained processes. Therefore, a clearly articulated business case supported by demonstrated executive commitment is a must. Not everything works the first time, so be prepared to check, recheck, and adapt.

Weekly Brief

Read Also

Match Game 2.0

Match Game 2.0

Clint Roszelle, Director – Enterprise Process Excellence, Citizens Property Insurance Corporation
Capitalizing on Commercial Insurtech Disruption

Capitalizing on Commercial Insurtech Disruption

Marcus Knuth, Vice President – Enterprise Technology, Acuity Insurance
Making Wiser Choices Regarding Technological Implementations

Making Wiser Choices Regarding Technological Implementations

Jill Cook, Director, Structured Settlements Administration, Protective Life
Driving Value-Based Experiences In Insurance  Using Apis

Driving Value-Based Experiences In Insurance Using Apis

Leslie (Les) Hermitt Jr. Chief Digital Officer C&F Digital Partners business unit
Impact of Operational Risk on Asset Valuations and Pricing of Corporate Insurance Policies

Impact of Operational Risk on Asset Valuations and Pricing of Corporate Insurance Policies

Aleksandar Kovacevic, Founder and Managing Director, Audeamus Risk
InsurTech's hot streak continues

InsurTech's hot streak continues

Sam Evans, Founding Partner, Eos Venture Partners