Entering New Markets
With their thorough grasp of enterprise strengths and gaps, strategically focused CIOs are in a prime position to prepare their organizations for new-market ventures. The need for a new technology platform that would support market expansion sent shipping company Matson Navigation (ALEX) shopping for a new kind of CIO. “We certainly wanted someone who could continue to keep the lights on, but [who] also was much more strategic in his orientation,” explains Matson president Matt Cox. The challenge: “Take a 125-year-old company, running on applications that were in some cases over 30 years old, into an era of growth.”
Cox credits Vice President and CIO Peter Weis with enabling Matson’s entry into the Chinese market. The move depended on new technology, including Matson’s first major commitment to voice over IP, anticipating the communications needs of trans-Pacific shipping. IT also ensured that Matson’s strategy of growth through acquisition would be cost-effective by keeping platform proliferation to a minimum. Because he is involved in acquisitions from the start, Weis can keep platform needs and challenges visible as transactions unfold, says Cox.
In 2005, when new AXA Equitable CIO Kevin Murray convinced fellow executives to rebuild the company’s annuity platform, the business goal was faster time to market. But Chairman and CEO Christopher “Kip” Condron says the insurer couldn’t have survived the recent financial crisis if not for the revamped platform, which made it easier to adapt to changing market conditions. “We had to pull products off the shelf, put new ones on the shelf, take risk out of the portfolio—all while driving at 60 miles per hour.”
Using the old systems, it could take six weeks just to change the interest rate offered on an annuity, he says. “Now you can do that in a nanosecond.” The new platform simplifies the identification and application of the complex rules that govern new financial instruments, reducing the time it takes to bring new products to market from as many as nine months to two. The company wants to be able to move even faster. “Kevin promised that capability in his vision, and we got to witness it and stress test it in the crisis.”
Condron also credits Murray with thinking ahead by designing the annuity platform with flexibility for local regulations and languages. Those capabilities helped AXA establish an annuity business in Western Europe. “I’ve worked with far less visionary CIOs who saw their jobs as ‘Tell me what to do and I’ll do it,’” says Condron. Those leaders hurt the company, Condron says, by not advising him to spend more on IT. “We doubled our development budget to build that annuity platform, and there’s not a single person in the company who regrets it.”
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