Systems overhaul: extensive understanding of users' needs helps this CIO steer his company through a systems replacement project.

As a former director of operations at CSE Insurance Group, Lee Baumgartner is well aware of the needs of the carrier's users. That knowledge has come in handy as the industry veteran coordinates his company's overhaul of its internal systems.

"The user community has been involved in our systems replacement project at every level from the start, including defining business requirements, participating in vendor interviews, viewing demonstrations, and selecting a product," Baumgartner says. "We've made it a point of making this a company project rather than an IT project."

Based in San Francisco, CSE is a regional personal lines carrier serving Western states--primarily California, Arizona, Nevada, and Utah. The company was formed in 1949 to provide insurance for firefighters, law enforcement personnel, and other government and civil service employees. In the 1980s, it extended its products to the general public. Baumgartner joined the company during this transition to set up an operations department and provide back-end support. A graduate of Stanford University with a bachelor's degree in political science and psychology, Baumgartner had extensive insurance experience in operations and administration from previous positions.

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In nearly 20 years at CSE, Baumgartner's responsibilities have expanded beyond operations. In the late 1990s, he temporarily headed up the IT department during an executive transition. Baumgartner added IT to his vice president of administration responsibilities in 2003.

"I've had a lot of interaction on the user side with IT throughout my career, and that's served both CSE and myself well," Baumgartner contends. "You can't be in the insurance industry very long without being significantly impacted by or involved in technology."

CSE currently employs 170 people, about 30 of whom work in IT. Net written premium was $110 million in 2008. One of the company's key 2009 initiatives is to develop new markets/distribution and expand into other locations. To support strategic growth, the company is in the process of replacing its COBOL-based legacy AS400 system with a Web-based Java J2EE platform.

"It's a quantum leap as opposed to just adapting our existing legacy system with front-end, Web-based integration," Baumgartner explains. "We're replacing everything."

The replacement project began in 2007 with a definition and selection process. In early 2008, CSE chose ISCS Inc.'s SurePower Innovation product. The new system for personal lines will be implemented in four phases. Baumgartner expects all agents in California will be using the new system by the end of the summer; the conversion for the rest of the states should be complete by year's end.

"SurePower will provide the platform we need to evolve and handle growth as well as improve speed to market, operational efficiency, product development, and data mastery and address ongoing statutory and regulatory pressures," Baumgartner indicates.

A systems replacement project of this scale has not been without its challenges, however.

"Every part of the project you would expect would be a challenge is exactly that, whether it's training or product development or the infrastructure itself," Baumgartner admits. "It's entirely new, not just in computer languages but in data structure, as well. The conversion of data probably has been the most complex piece of this whole project.

"You have to have an appetite for change, for learning, and for the stimulus that comes along with new procedures and new technology," he adds. "It's fun and it's exciting, but it's very challenging."

Prior to the systems replacement project, the IT team spent several years building and rolling out applications to improve workflow processes and modernize the quoting systems for its agents. These included a document management solution from Oracle and a cost estimator platform from ISO HomeValue.

During his nearly two decades at CSE, Baumgartner has seen tremendous changes not only in the technology but also in how users and executives view the role of IT within the company.

"There's been an evolution that's allowed IT to come to the table and participate within management groups," he says. "Fifteen or 20 years ago, the IT function seemed to be more of an application provider; users didn't know how to propose what they wanted. Today, users are more computer literate, and they know what to ask for and what to expect from IT."

Sharon Baker

Sharon Baker is a freelance business writer based in Charlotte, N.C.