Val IT Case Study: ICW Group Uses Val IT to Pursue Ambitious Revenue Goal 

 

Abstract

Privately held ICW Group represents a group of multi-line property and casualty insurance carriers providing workers’ compensation, surety, commercial property, difference-in-conditions (DIC), and personal and business automobile insurance. Its member companies consist of Insurance Company of the West, Explorer Insurance Company, and Independence Casualty and Surety. Based in San Diego, California, USA, ICW Group has more than 700 employees and continues to transform itself into an insurance industry leader dedicated to meeting the needs of its agents and the people and companies they insure.

Background

Why is ICW Group using Val IT?
ICW Group’s chief executive officer (CEO) set an ambitious goal starting in 2008: Double the organization’s revenue within the next five years. Realizing that the organization had neither the tools nor maturity to achieve this, Kevin Harris, ICW’s chief information officer (CIO) presented the Val IT™ tool set from ISACA to senior management as the most effective way to both mature the organization and deliver high-quality solutions. “My goal is for ICW’s IT department to be completely supportive and aligned with our company’s business objectives,” said Harris. “Championing and implementing the Val IT framework will allow us to achieve that goal and become a positive and beneficial case study for the insurance industry.”

Process

How was Val IT presented to senior management?
Two PowerPoint presentations were developed to outline to senior management the benefits of Val IT and how it provides a structured approach for attaining value and effective governance based on proven practices.

The first presentation, Enterprise Governance: Operational Governance, was used to reach consensus on the approach and methodology. It outlined ICW Group’s key assets—information, knowledge, expertise and reputation—and showed why governance was needed to enable, sustain and promote the growth of these assets. Initiatives approved by ICW Group executives focus on projects that are either business-centric or are enabled by the business partnership with IT. Effective governance allows ICW Group to derive the maximum value from all of its projects.

The Val IT framework helped delineate a sequence of business initiatives from initiating a project, to making the project a reality, to realizing benefits and finally to leading to future opportunities. Continuous measurement, which is part of the sequence, reveals whether actual benefits match expectations. The benefits accrue because effective operations lead to increased throughput, efficiencies, cost savings and growth opportunities.

The second presentation, Selecting and Managing the Investment Portfolio, was used to show how the Val IT framework would be applied to improve decision making and support organizational change. It clearly demonstrated how projects could best be added to the mix, how the portfolio should be assembled, how to effectively launch approved projects and how to optimize the portfolio. Next steps were listed as assigning roles and responsibilities, establishing scope and approach, setting implementation timelines, communicating the course of action to stakeholders, and ingraining the Val IT framework into the organizational culture. 

Based upon the favorable reception the joint presentations received, the team crafted three one-page charts, each one correlating to one of the three Val IT domains. This allowed participants to see at a glance their duties, and roles and responsibilities with respect to each of the domains. To help the participants in the Portfolio Management domain effectively and objectively select the right mix of investments, ICW Group is utilizing several tools (the four lens approach, strategic alignment approach and the readiness approach). As part of its overall EPM solution evaluation, the organization is considering Microsoft’s Portfolio Server offering. By using this combination of tools, the team believes it can help decision makers take the emotion out of the selection process and arrive at an objective and considered consensus.

For the Investment Management domain, the staff will utilize a cost/benefit analysis (CBA) tool that has been certified by the National Board of Accountancy. To augment the CBA, Investment Management staff will also prepare a detailed risk assessment analysis in accordance with standards established by the organization’s Executive Risk Management Committee.

Conclusion

Future Plans Using Val IT
 “Val IT is helping our organization achieve ambitious goals by enabling us to make smart decisions that deliver the best business value. Business change is never easy, especially in a turbulent economy, but Val IT’s proven practices provide practical guidance that helps us reduce costs and increase control,” said Angelo Esposito, director, Governance, ICW Group.

The business case template for this ambitious project is based on the principles espoused in the Val IT publication titled Enterprise Value: Governance of IT Investments, The Business Case. Metrics are based largely on lead indicators (e.g., actual spend vs. budget, forecast spend and risk assessment scoring), although the organization also plans on using lag indicators to pinpoint areas of improvement for future projects. Details are available at www.itgi.org.

Case Study Disclaimer
This case study is intended for informational purposes only. The advice, opinion, statements, materials and other information expressed and contained in this case study are solely those of the authors and do not necessarily reflect the views, policies or opinions of ISACA or the IT Governance Institute (ITGI). ISACA/ITGI is not responsible for the accuracy, currency, completeness, reliability or usefulness of any advice, opinions, statements or content contained in the case study and makes no claim that use of the case study will assure a successful outcome.