Talking with an Insurance CIO in China
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I visited the CIO of one of the top five life insurance companies in China recently, and he gave me many insights on IT management. I think his advice could help global vendors understand Chinese insurance companies better, and so I’ve decided to share them here. IT as the Fire Department Most insurance companies in China are still growing, with branches opening, new products coming out, and various promotion activities, so there are always many business requirements or problems. Though IT knows there are strategic initiatives they could be thinking about, they sometimes have to put out the fire first. In China, the IT department basically supports business expansion. They may not have time to think much about adjustments and innovation. Their attitude regarding emerging technology remains prudent. This lines up with the results of the recent Celent CIO survey for emerging technologies, with most CIOs in China choosing “no interest” when asked about the degree to which their companies have embraced emerging technologies or practices such as social networking, wikis, and SaaS. Business Volume Usually, if sales goals have not been met at the end of each year, the sales management department will launch a large promotion program. This promotion will help drive a huge increase in new business, putting pressure on systems and meaning more IT resources are needed to support business processing. Alternatively, if the sales goals have been reached before the end of the year, then the sales department will issue a large promotion program for the start of the new year. The top salespeople have this magic ability to control the time when customers hand in applications, and, in this case, control when business pressure will be the focus of IT resources. If global vendors choose to enter China, the first thing they should think about is volume. China has a population of 1.3 billion, and the business volume in one province at a large China company may already be very large. With companies expanding, future volume could be several times larger. CIO’s Internal Role Good IT management can create a positive image for the IT department inside the company. For example, when a project is going online, application processing might have to stop for one day. Sometimes IT departments will choose the holidays, and (thinking that they don’t need to inform the business department in advance) will give notice very close to the holidays. But it’s possible the business department has already undertaken some competitive activity, or they had planned to accept applications during the holiday; in this case, the business department will be very unhappy with the IT department. In order to give the business department a good impression, the IT department needs to inform the business about new projects far in advance, explain the effects of a project clearly, and provide updates. After setting precedents like this, the IT department can get more cooperation and support from the business department for new initiatives. Although insurance companies in China are becoming increasingly aware that information technology is an effective tool for increasing core competitiveness, “IT drives business” is still not practical in China. The IT department is just a supporting department in most companies. The CIO’s role should be somewhat like internal public relations for the department, creating a positive image for IT, advertising new projects to the business departments, and getting their interest and support.