Staying one step in front

Edinburgh-based Standard Life has witnessed many ups and downs in the financial arena during its 185-year history. To find out how the IT side of the business has been affected by the recession and just why tech staff love working for the company so much, Julian Rogers catches up with CIO Keith Young.

“There's always business cycles - kind of boom and bust situations - and you need to make sure you're in good shape actually going into any of these storms”
-Keith Young

There is a perception, rightly or wrongly, that IT is a particularly fickle industry with technology professionals swapping jobs with almost the same frequency as they change their socks. Indeed, a statistic sometimes banded about is how even CIOs are thought to spend only around four years in a job before upping sticks and moving on. Keith Young, however, is the exception to this philosophy, having notched up nine years in the top tech seat at Standard Life. Altogether his career at the Scottish firm spans 22 years, having worked his way up the IT ladder and various management roles. Likewise, Standard Life's outgoing CEO, Sir Sandy Crombie, joined the company's embryonic IT department back in the 1960s, programming code that is still in use nowadays. Around 1000 of the 10,000-strong workforce based in the UK, Europe, North America and Asia are involved in IT and their average length of service is just over 13 years - an impressive stat in anyone's book. Perhaps more surprising is the fact that management near the summit of Standard Life's IT hierarchy have an average of 20 years' experience each at the company. "IT professionals tend to move around quite a lot, and that seems to be a fairly typical model in the industry, but we are definitely atypical," Young reveals in a distinct Scottish brogue.

Many of his long serving IT professionals were recruited as trainees, brought through the ranks to management and have chosen to stick with the company. "The way you keep hold of your most experienced and best ones is by making them feel valued," Young explains. "You have to spend time with them, you have to make their opinions count and you have to give them careers that play to their strengths." Of course, not everyone earmarked for management fulfils their potential; others feel removed from the job they originally trained to do. In order to address this "technical streams" were established to allow staff who excelled at perhaps development, design or analysis to specialise in their area of expertise. "We allowed the very best staff to rise into senior management positions with their divisions so that they didn't have to move away from their specialism in order to have a valuable career with us." Allowing staff to move up the ladder and still hang onto their technical expertise and experience is fairly unique but one that seems to work here. 

Although Young still casts his net outside Standard Life's four walls when looking to recruit, his preferred option is to promote from within. After all, internal staff have the knowledge of what the company is all about and have absorbed its culture. Young says choosing to favour hiring non-Standard Life people damages morale and means risking losing key staff. "If you regularly recruit staff into senior levels rather than promoting from within, the message you send to your staff is that they're not valuable and, therefore, you will encourage them to look elsewhere for opportunities." Young also has a trainee programme in place that takes junior IT professionals on board every year and invests in their development. They go through rigorous tests to make sure they are the right candidates and great team players with the ability to collaborate effectively. Being an intellectual individual is not what Young is looking for. Next year Standard's IT numbers will have to swell to cope with the injection of some serious money into the department as the business and the industry as a whole emerges from the deepest recession in decades. Young and his management team will be on the hunt for experienced people, especially project managers and senior analysts. "There's always business cycles - kind of boom and bust situations - and you need to make sure you're in good shape actually going into any of these storms."

Handling a crisis

When Young mentions a storm he is, of course, referring to the hurricane of the past couple of years with the meltdown in the banking sector and subsequent credit crisis and recession. Unlike some CIOs, Young is quick to dismiss any notion that he is being asked to do more with less. On the contrary, it's been pretty much business as usual for the IT side of Standard Life, although he fully expects increased legislation for the financial institutions in the wake of the industry's economic meltdown last year. "The economic problems of the last 18 months didn't result in us making major cuts in IT," he asserts. "In fact, our running costs in investment in IT for 2009 is pretty much the same as it was in 2008 and that investment is actually going to be increased in 2010 to prepare us for coming out of the recession." He adds: "Although it was business as usual in 2009, we kept an eye on what was happening in the markets to be aware that we might have to make cuts should things get any worse than they turned out to be." With turmoil in the financial sector and the recession affecting most businesses, Young issues a note of caution about making snap decisions based on the short-term outlook rather than a long-term forecast. "You need to invest for the long-term because this isn't like selling commodities where one time the market will be very high and then the market falls and you have a big programme of cuts to deal with it. We tend to have a more consistent approach to investment because you are dealing with the long term as you ride out the storms."

Earlier this year a drive for operational excellence was announced in order to be as "efficient and effective as possible". It was also about reducing silos across Standard Life globally as well as developing and challenging talented people. A key component of the IT strategy is the group's service-orientated architecture (SOA) which has saved around €26 million to date by replacing legacy systems like the customer database application and reducing the complexity of developing other applications. The amount saved is based on what it would have cost for Standard Life to build each unique business service every time an application was developed. Altogether Standard Life has written a catalogue of 500 business services and the leading ones are used in more than 50 applications. "If you architect it properly and you write the business service once, then it can be used across many applications." Although Standard Life doesn't have as many legacy systems as its peers due to a low level of M&A activity, some legacy programmes needed to be refurbished and others re-written. "They decay over time simply because business changes or the systems start to get used for functions that they were never designed to be used for, and that's where some of the problems come," he warns.

Some of the legacy programmes had been altered so many times that they were destined to become impossible to maintain unless steps were taken. "We took them and effectively redesigned and rewrote them before putting them back in place." Young likens the situation to a railway with lines criss-crossing the network. "Some programmes are used by almost everything, and they become key programmes, and it's these ones that we took out, redesigned, recoded and put back into production. It means that our legacy systems are more manageable than they would be if you just allowed them to decay."

As well as the refurbishment, the strategy also provides consistency across all channels, which means information sent out to the customer, passed to a call centre operator or uploaded to the website uses the same business service. "The results that you get when we write to you or if you contact us over the phone or the net will always be the same and consistent," Young explains. On top of this, Young and his team has shrunk the data centre and slashed its carbon footprint by more than 70 percent through virtualisation. In fact, the overall cost of Standard Life's all-important IT has reduced by over 75 percent since 2004 - the year the group demutualised.

Evolution over time

With his career at the institution stretching back to 1987 when he arrived as an analyst, Young has seen IT evolve from a back-office function into a real 'game-changer' and business enabler. Back then the IT function was a very much inward-facing component compared with today's customer-facing outlook. Indeed, in one way or another the IT department is often the only contact Standard Life's 6.5 million global customers have with the business, which offers life assurance, pensions, investment management, banking and healthcare insurance products. "We didn't used to have any direct contact with customers but that changed significantly and is continuing to change with the growth of the internet and services being provided over it," Young notes. "Twenty-odd years ago most of the contact with customers was via paper, then it moved to and is still predominantly the telephone, and now it's increasingly moving towards the internet."

Being able to capitalise on the internet as a way of serving your customers can prove invaluable in retaining customers and cutting costs in other areas. "If you can take advantage of the web you can do two things: you can give your customers a great service, and you can cut your costs because you don't require big call centres handling customers' calls." With the advent of better technology the back-office function has switched to the front in some respect, as Young explains. "When the customer contacts us over the web and they're coming directly into the IT function, no other staff are touching that on the way, so it means you need to be secure, reliable, always there and give them the information they need first time."

Looking back

Young, who is gearing up for his retirement at the end of the year - a period of his life he is "very much looking forward to", says excellent leadership skills have been the most important aspect of his job. He admits, however, that it is a challenge maintaining regular contact with 1000 staff and getting his message across and explaining his strategies. Nevertheless, Young holds face-to-face meetings with employees and regularly attends team meetings. He's even produced a DVD of himself delivering important messages and has used the media to get his opinion across. "What I need to concern myself with is making sure they understand what they are supposed to be doing and the things that are important, but I don't have to worry about their technical competence." So is he a 'hands on' boss? "I wouldn't say I was and I don't think my staff would describe me as this either, although it is necessary to get involved in some specific issues to some detail. You also need to recognise that some things could potentially cause trouble but these are few and far between."