Standard Life puts IT centre stage in the downturn

Agile development, service-oriented architecture and IT standardisation are driving change at the insurance provider, says IT director Keith Young

Standard Life is standardising IT

Despite a predicted fall in IT spending in financial services, insurance group Standard Life plans to continue investing in technology to gain a competitive advantage.

The Edinburgh-based firm is driving a systems consolidation exercise to reduce cost and divert cash into business-critical areas and is employing agile programming techniques to bring products to market faster.

Standard Life’s service-oriented architecture (SOA) platform is also playing an important role in standardisation efforts to drive consistency in business functions as the insurer expands via acquisitions.

“IT has become an accelerator for change at Standard Life and we adopt a global mindset,” said group IT director Keith Young.

“Traditionally, each region has developed its own ways of handling payments, with disparate systems for areas such as finance and HR. The organisation was working in silos, but we now have the ambition to grow globally,” he said.

“We want to move towards one set of collaboration tools. The advantage of this is that when you expand the business, many of the components are already decided on so you do not have to invest more than is needed and you can think of ways to improve that specific territory.”

Since the launch of Shaping the Future, a group-wide strategy introduced in 2004 to drive operational excellence, Standard Life has already reduced its IT spending by 75 per cent despite the underlying pressures of growth and introducing new products.

“We are very proud of what was achieved. Service has been improved and we reduced the cost of IT to the business,” said Young.

Successful experiences in the UK will be put into use in a global context, he added, and standardised systems will allow further cost savings.

“Our plans for 2009 are set out very clearly. We had the opportunity in 2004 to focus on cost efficiency and now we are in a good place to improve what we have – the plan is to keep going down that route instead of making some dramatic changes,” said Young.

Standard Life told Computing last year that it was reviving its offshore outsourcing strategy to streamline its existing application setup, cut costs and gain more flexibility in application development.

The firm’s new offshoring partner, L&T Infotech, will also use agile development methodologies to support the process of system rationalisation and integration, alongside existing supplier Tata Consultancy Services.

“We want to get value for money, focus on maximising productivity, increase predictability in terms of delivery timescales and cost and ensure quality,” said Bill Birnie, senior manager of Standard Life’s IT development solutions team.

Birnie said the introduction of a steering committee to monitor the work delivered by the offshore provider has done much to tackle any potential communication challenges and guarantee high standards.

“With the committee, we see the deliverables coming in every fortnight and we have made processes a lot more standard and consistent,” he said.