Do you still remember the IBM 650 mainframe? Can you image that 12 kilobytes memory was considered state of the art some 50 years ago?
The Allianz historical archive recently put together an exhibition and published a comprehensive catalogue documenting the evolution of information technology at Allianz since the 1950s. The exhibition titled "Bits and Bytes for Business" demonstrates that history happens fast in the IT industry and that change is the norm rather than the exception.
While the exhibits offer almost nostalgic insight into the "good old days" on the one hand, they also challenge us to think ahead. How will IT at Allianz look five or ten years from now? Allianz.com News asked Markus T. Müller, Head of Group IT, to share his views about the future topics in information technology.
Thoughts on the next decade of IT at Allianz
Dr. Müller, we hear a lot these days about IT becoming more industrialized, about outsourcing, off- and near-shoring and about IT focusing on how it can efficiently support the core business. A recent study by the University St. Gallen reports that IT organizations stress the commercial aspects and customer orientation of their activities. Are these market trends also evident at Allianz?
Müller: In the past, IT dealt more with technological innovations in databases, hardware and networks as well as software and platforms. Today, questions concerning the efficient organization of business processes are gaining more weight. These topics often involve standardization and consolidation aspects. Speaking in the IT language, this means questions concerning architecture, governance, processes and organization.
These trends apply to the industry as a whole and therefore also to Allianz. Let us take two of the topics you mentioned - outsourcing and industrialization. These concepts have been implemented in a few special functions and only after careful evaluation. Dresdner Bank, for example, has outsourced its technical bond processing and AGIS in Germany has industrialized parts of its system and application operation through a program called SYN III. Our job is to ask ourselves how we can create a consistent IT strategy that effectively supports the business of the group, taking into consideration market trends as well as local initiatives.
Allianz recently transformed itself into a Societas Europaea (SE) and announced it would start to act more "European" on an operational level by launching, for example, pan-European insurance and financial service products. Does this mean cross functions such as IT can subsequently be organized on a more European level as well?
Müller: First, it is important to distinguish between IT applications (software development) and IT infrastructure (system and application operation). In order to unify application development on a European level efficiently, the applications themselves would first have to be unified. This, however, is only possible if the underlying business processes are harmonized as well.
This is easier to do for administrative functions like Human Resources than for product-related applications. Although we already have some international offerings, the majority of our products are local, because they need to be tailored to different market requirements and legal frameworks. These applications can only be standardized in the future.
Looking at IT infrastructure on the other hand, the situation is different. There are fewer issues generally prohibiting standardization and therefore we indeed ask ourselves if there are areas that could be organized on a cross-entity level.
Group IT has initiated optimization programs in IT infrastructure in the past. The idea to unify structures and processes is not new. How has becoming an SE changed the situation?
Müller: By implementing the "Data Center Efficiency Program" and the "Workplace Efficiency Program", we have already taken two important steps towards raising operational efficiency. Nevertheless, we need to look beyond that and evaluate if a European organization of IT infrastructure would be feasible and if it would deliver significant benefits. After all, we do different things and do things differently in as many as 55 data centers throughout Europe.
Moreover, individual steps towards cross-border consolidation are already being taken. For example, AGIS operates the mainframes for Allianz Austria and Switzerland and soon will also do so for Allianz Netherlands. Allianz Spain and Portugal are setting up a joint IT subsidiary. However, any standardization of infrastructure on a European level must be guided by the principle what benefit it would deliver for the core business of Allianz.
What specific benefits for the Allianz subsidiaries do you have in mind?
Müller: The benefits that would have to be given circle around three areas that are usually addressed together: Better customer service and quality, simpler and clearer processes as well as cost savings.
A consolidation of IT infrastructure would have to deliver improvements in all three areas by setting a common standard for how Allianz IT infrastructure should be set up and managed. For our internal clients, this would mean transparent products and prices. I am talking, for example, about a uniform product catalogue for all Allianz organizations that clearly defines service standards for servers and desktops.
Could IT infrastructure be organized on a pan-European level today?
Müller: As I mentioned before, we have 55 data centers in Europe. This would be a very complex task. However, when looking at our competitors, we notice an industry-wide pressure to act. Obviously, this increases competitive pressure and therefore it must be our goal to set up a uniform IT infrastructure in Europe.
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