Blend It In - But Not Too Much

Forgive IT workers at ING U.S. Financial Services, part of the Dutch banking giant ING Group N.V., if they had their worries when chief operating officer Catherine Smith took over leadership of the IT group a year ago. Smith took the reins in January, one month after the company revealed it was outsourcing much of its data-center operations to an IBM facility in Colorado. Already, some legacy application maintenance had gone to India, and here came Smith, a former CFO, who spent the past two years at ING wringing cost savings out of processing and customer-service functions by improving efficiency across the company's many acquisitions.

"There was a certain skepticism of, 'What kind of value can this person add?' or 'Is this sending a signal that the company's putting less value on what IT does?'" Smith admits.

Yet Smith's role, which puts her in charge of 3,700 employees across operations, customer service and IT, might appeal to more companies as they look to the future of business technology. At ING U.S., the organizational structure stems from a recognition that operations and customer service are wholly dependent on IT, so people in all three functions need to understand one another better. And it was designed to improve IT efficiency, including more metrics-driven and customer-centric thinking.

An example comes from this year's transition to a consolidated call center used by the company's annuities, defined-contribution and life-insurance lines of business. ING U.S. arose from more than a dozen acquisitions, and it had the network and application sprawl to prove it. In the past two years, ING consolidated to one call-center system run from three locations, hoping to provide one point of customer contact, improve call routing and cut costs. But that required upgrading the company's telephone and call-center-management system to better route calls and deliver information to reps.

Smith sees opportunity in getting IT to adopt some tactics she uses to lead financial and customer-service groups. For example, the company tracks the hours it spends on application maintenance. Comparing each application to rule-of-thumb standards - commonplace in financial analysis - could send managers a red flag if an application is soaking up far more maintenance than others, making it a candidate for replacing or rewriting. Smith is also introducing - again, not without skepticism - softer measurements of staff performance, including reviews by customers, peers and managers on how well a person puts the customer first or offers fresh ideas.

Smith sees a risk in integrating IT and business units too far. Blur the IT group's identity too much and it could send the wrong message to the best and brightest technical employees. Says Smith, "One of the risks might be that somehow people don't feel like it's an IT organization - and I say that now with a much better understanding than a year ago about how important the IT culture itself is to IT employees."

This article originally appeared in InformationWeek.

Chris Murphy is editor of InformationWeek and co-chair of the InformationWeek Conference. He has been covering technology leadership and CIO strategy issues for InformationWeek since 1999. Before that, he was editor of the Budapest Business Journal, a business newspaper in ... View Full Bio