RSA CIO Darren Price on digital transformation, agile and what makes a good chief digital officer

RSA Insurance Group CIO Darren Price discusses the business factors driving the company's huge digital transformation programme, and explains why he won't be rushed into hiring a new chief digital officer

The insurance industry isn't renowned for its enthusiasm for cutting-edge technology, but Darren Price, CIO of RSA Insurance Group (formerly Royal & SunAlliance), is on a mission to change that at his firm.

Following a period of strategic planning with consultancy McKinsey, RSA signed a deal in January 2016 making Indian outsourcer Wipro its new infrastructure partner across Europe, part of a revolutionary switch to cloud, and a major part of the group's new digital transformation drive.

With several data centres to migrate and new services and capabilities to bring online, all while improving data security, it's a huge project for Price and his team. And the risks are similarly colossal, with financial costs in the millions for missing project deadlines.

So why do it?

It turns out that the answer is partly about savings costs, not surprisingly, but it's also about improving capabilities.

"We will save 35 per cent on our infrastructure cost base," explains Price. "That's over £200m over six years. And as we've migrated the data centre and upgraded hardware and software, we've seen significant performance improvements, and improvements in stability. Overall, there's been even more benefit than we initially identified. This has given us the opportunity to tidy up our environments, which has also meant we've needed less infrastructure, leading to even further cost savings," he says.

Describing the mandate from RSA's board for the digital transformation of its business as a "once in a lifetime opportunity to invest in technology", he says selecting the right partner was obviously critical. According to Price, Wipro was the "stand out" firm in the selection process, in part due to its cultural fit with RSA.

"We chose Wipro because of their customer focus and the way we're able to work together. They built relationships between our businesses, and they were keen to work in a new and dynamic way. Cost was one element of the decision, but getting the right cultural fit is critical."

Entering this relationship with Wipro has meant exiting from the previous deal with IBM in the UK and Ireland, and CSC in Scandinavia. This was the project's biggest risk, according to Price, as the previous incumbents could have dragged their heels and made life very difficult for the new integrator, and the broader project. Fortunately for RSA, both IBM and CSC were fully co-operative.

"As we've worked through it, IBM and CSC have stepped up to support a quality transition of service to Wipro," he says. "It was a challenging process, having to agree a deal with the current incumbents, including access to the data centres, and then building the new infrastructure. There would have been a huge financial impact had we missed our dates.

"After the commercial wranglings, both IBM and CSC have supported a quality handover. That was an important part of the project, and it doesn't happen in lots of cases. It was a hell of a relief to be honest, as that was the biggest risk," he admits.

RSA CIO Darren Price on digital transformation, agile and what makes a good chief digital officer

RSA Insurance Group CIO Darren Price discusses the business factors driving the company's huge digital transformation programme, and explains why he won't be rushed into hiring a new chief digital officer

Price explains that there was a huge financial risk in missing any deadlines, with mid-year and end-of-quarter reports needed for the firm's market reporting responsibilities, not to mention day-to-day trading.

"But we hit the deadline to the day with the UK cutover," he says. "Now we're migrating mid-range infrastructure services for the rest of this year, including development and QA services. The risk is high there too, because the data centre is in Scandinavia and half the country goes on holiday around now."

Price is keen to emphasise that this project has been delivered very much in partnership with the business, rather than as a service that's being delivered exclusively by IT.

"It's being delivered as a joint technology and business project, but with group and regional alignment as well. Clear governance has been key, along with alignment of execution plans. Our approach to the transformation has been to have a real focus on quality assurance, together with a deep level of planning."

Key resources have been brought in at various levels to help with programme delivery. The group has recruited in order to build its core service management capability, and gone out to the contract market to bring in temporary expertise in digital transformation.

Some internal staff have also been transferred to Wipro for the duration of the deal.

Delivering a component-based architecture

The oldest part of the business, originally known as ‘The Sun', was founded in 1710. Any business of that age comes with a hefty legacy estate, and RSA is no different. The way Price is dealing with this problem is to introduce ‘component-based architecture'.

"A lot of businesses struggle with highly integrated environments, especially around applications," says Price. "Delivering change in application projects can be highly complex, time-consuming and costly. So we're building a component-based architecture, where we are going away from hard-coded interfaces to components-based. It helps us to utilise cloud, and to deliver changes quicker."

In this context, component-based architecture is similar conceptually to a services oriented architecture. The idea is that with everything discretely packaged as an individually functioning component, there are fewer interdependencies, with less complexity and integration. This enables the business to dial services up and down more easily, without having to worry about how adding or removing a component will impact the entire chain.

More simply, it's about introducing a digital capability in front of legacy applications, in a ‘two-speed IT' strategy.

Price has also introduced agile practices into the business to take better advantage of the drive to digital and cloud.

"We've invested in agile delivery especially around digital. We've gone to scrummaging environments that are highly execution-focused. For our larger technology programmes we've gone to a Sprint-based approach, delivering specific Sprints around the business, with a more agile execution."

In practice this means that whereas before a year-long programme would deliver an outcome after 12 months, now there will be 10 Sprints in that programme that deliver drops to the business which can then be tested and approved.

"It gives the business confidence in what's being delivered," says Price.

But this doesn't mean that everything strictly adheres to agile principles, and there are still elements of the more traditional waterfall methodology in evidence at RSA.

"You've got to have a structured approach, but with more frequent deliverables," Price argues. "It's agile but without getting carried away."

Price explains that one of the chief benefits of these new working practices, apart from flexibility and speed, is, perhaps surprisingly, transparency.

"One of the things I'm trying to do is to drive short-term benefits whilst addressing legacy. The way you deliver that is with this component-based approach, then you deliver in a way that the business doesn't have to wait three years for an outcome, but you show the business your results at regular intervals.

"We've implemented key architectural processes which check that we're sticking to the core business and technology principles we want to deliver. You often overcomplicate solutions then struggle to execute. So we've implemented core design rules that ensure we keep to our key architectural principles.

"This allows you to have a fully transparent and auditable decision-making process. You need to understand your outcomes. Are you moving away from a cloud-based solution, in which case are you looking at increased BAU [business as usual] cost? You're very transparent and can audit the implications of your decisions, and the business is fully aware of the impact of the decisions they're making."

He adds that he and his stakeholders have set the percentage at which they want to stick to their technology principles, then they can measure how far they've deviated from those rules, and what the impact is.

"Transparency is the real differentiator," explains Price. "It gives you an auditable view."

Diving into the cloud

The group is also looking into increasing its use of cloud company Amazon Web Services (AWS). Price explains that the flexibility to experiment is one of the chief benefits.

"Previously our digital teams were limited in the number of releases that could be made in the UK, because we only have eight official change windows each year. In an agile world that's overly restrictive, so we split it out the digital layer and hosted it in AWS. After that our teams could push out eight releases per day."

RSA CIO Darren Price on digital transformation, agile and what makes a good chief digital officer

RSA Insurance Group CIO Darren Price discusses the business factors driving the company's huge digital transformation programme, and explains why he won't be rushed into hiring a new chief digital officer

This has allowed the teams to examine data around customer behaviour on the group's website, and experiment with design changes.

"So we can make changes to the presentation layer of the website, put it out for a beta test and see the commercial impact of those changes. And we've now got the agility to make those changes in real time, and analyse the results," says Price.

Recruiting a CDO

With so much riding on the group's digital transformation, it's perhaps surprising that it has been without a digital head since previous group chief digital officer (CDO) Ian Hood left in 2015.

Price explains that the company didn't want to rush to replace Hood, but to wait for the right candidate to appear.

"The group always wanted to attract a top quality CDO. We wanted to ensure we got the right person, and not rush it, so it's taken a lot of time," he says.

Price has run the digital agenda himself in the interim. "We've done a lot of work around our strategic view of how we build digital capability long term. Digital is at the forefront of the business mindset," he says.

Price explains that the digital agenda for RSA is about transforming workflows to deliver better outcomes to customers, for instance enabling online self-service externally and providing a single view of the customer internally.

It also enables more innovation, he adds, such as being able to provide new insurance products to support driverless cars, and on-board telemetry so that safe drivers pay lower premiums.

"These telematics solutions, and analysis of the data that comes out of them, will transform our motoring products. We can now develop a policy around the specific behaviour of the driver," says Price.

"Data analysis allows you to produce a product that rewards good driving. Especially for young drivers, this can be transformational. It has as much chance of reducing the cost of the policy as increasing it."

He also explains that the insurance sector needs to evolve more to use big data.

"We could use data from social media to better target and segment customers and products. There's more work to do, and we're hoping that a CDO will give us more focus in defining that agenda," he says.

But what makes the perfect CDO, what exactly is RSA looking for from the role?

In Price's view it's about influencing business strategy, aligning the organisation's technology function, then delivering on that strategy.

He admits that it's very hard to find a candidate with the right blend of skills, and that applicants fell generally into one of two camps.

"I saw two extremes. Some had a real technology bias, and others were all about digital culture, digital thinking and creativity," he explains.

"So you had some people saying they need 300 people outside their office to develop digital, and others demanding full creative control of everything the business delivers, its organisation and overall culture."

Price is looking for someone with a more balanced outlook, taking aspects from both camps but exhibiting strong, overriding commercial awareness.

"You want someone commercially driven who understands the commercial opportunity [presented by digital] and can execute it. You need someone who can understand and influence strategy, align themselves with the business and deliver," he says.

However, Price acknowledges that recruiting for any role is never a one-size-fits-all process.

"Not all organisations are standard in what they need from a digital transformation. So what you're really looking for is someone who can guide the organisation through the process, and build capability," he concludes.

@StuartSumner

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