Gregory Maciag

Las Vegas Opening Presentation

RIMS in San Diego

Arrived in San Diego to attend the RIMS Conference. Corporate insurance buyers are keen on driving ACORD industry standards and several sessions will include ACORD on the agenda. My wife Carol, John Leonard (ACORD Chair), Beth Grossman, Dan Cote (MEMIC) are with me at the Lloyd's of London reception aboard one of the vessels docked at the marina.

NAILBA & ACORD Working Together

Our team met with leaders of NAILBA to discuss our mutual activities. Pictured above are (Left) Jack Chiasson, Executive Director of NAILBA, John Kellington ACORD Senior Vice President, Beth Grossman, ACORD Assistant Vice President, Douglas Mishkin, Chairman of NAILBA and President & CEO of Algren Associates in New York City.  We met in Doug's new offices and spoke about getting our teams together during the next few weeks.

Explosive Standards Video To Be Released

The ACORD team is shooting a video for my opening presentation at the ACORD-LOMA Insurance Systems Forum in Las Vegas (May 13-15). Coming up with something new is always a challenge. You're not going to believe what they decided to do. Don't miss the opening session.

IIABA of Japan Visit

As you know, we have been in Tokyo a few times over the years to speak with various organizations about ACORD Standards.  We hosted a seminar in 2001 that attracted 150+ industry people.  The IIABA of Japan (an Independent Insurance Agents & Brokers Association affiliate)  is working with a group of insurers and trade associations and they are considering the use of ACORD Forms in Japan. We plan to host a meeting in New York in September 2008 to gather ideas on how we can serve this community.

Akio Takahashi, Chairman & Chief Executive Officer of World Services Corporation visited my office yesterday. He is President of the IIABA of Japan. He was accompanied by Sue Noda, Managing Director of the Independent Insurance Agents & Brokers of Japan. Rick Gilman, Vice President of ACORD joined us.

Barry Libert Interview

Barry Libert: Social Networking

Talking about "Social Networking" in Las Vegas seems strange, but you're going to enjoy this general session from Barry Libert.  Barry is Founder and Chairman of MZINGA , a platform provider for social networking applications. He and I just taped an ACORD Live! interview and I will post it as soon as our studio completes the cut-down version. He and I just went on and on.

Creating communities and engaging in social networking is what we do  at ACORD. We have committees, working groups, domains, Teams.org, videos, podcasts and blogs.  We're talking to Barry about how to take all of what we do to the next level. And the bottom line is that we need your help to do so. Because this is all about We rather than Me. See the book created by a community in the Books sidebar.

The ACORD LOMA Partnership Continues

Bob Kerzner, President & CEO of LIMRA and of LL Global, the new holding company for LIMRA and LOMA met with me at his office in Windsor Connecticut.  Bob and I look forward to seeing all of you at the ACORD-LOMA Insurance Systems Forum in Las Vegas on May 13-15. We will both open the general session together.

That Important Enterprise View

I stressed the need for an enterprise view when it comes to thinking about ACORD or any industry standard for that matter. Climbers always need to get their bearings. Going straight up is seldom the best path to the summit. Stepping back (figuratively in this case), navigating unexpected obstacles and adjusting footholds along the way are all part of the process.

If you are about to climb (implement ACORD Standards), give us a call and see what resources we can offer. Helmets, ropes, harnesses and carabiners not included.

The Ongoing Challenge of Implementation

Greek mythology gives us the story of Sisyphus, a very crafty king who defied the gods and tried to elude death. His punishment was to endlessly roll a huge stone up a hill; but as soon as it reached the top, it would roll down to the bottom. talk about a fate worse than death. Well... then there are industry standards.

The magnitude of this industry initiative is huge. Although we've made tremendous progress over the past two decades, our work will continue. Standards touch every part of our business where information is moved between trading partners. And when you consider the depth and breadth of the insurance value chain, these handshakes are many.

ACORD Standards are always part of  a software development project. Standards are not a stand-alone product but more like rules of engagement.  And some organizations have dozens of policy administration systems, IT shops served by hundreds of vendors with hundreds (if not thousands) of employees working on (again) hundreds of projects across the enterprise.

People constantly change. Projects fail. Priorities shift. And then there's the occasional financial crisis or natural disaster that drains time, attention and resources from goals that appear to be less urgent.

The good news is that we have a library of press releases, case studies and research papers that address the adoption of ACORD Standards across the industry and that demonstrate the value. But people don't care much about the success of others. If you see one insurance company, then you've seen one insurance company. Variables differ and ones system success can be another's failure .

It comes down to governance from the top down. An industry standards compliance policy. Someone or a team with a prescriptive policy addressing the purchase, development and maintenance of every system in the organization.

This is not to suggest that industry standards cannot be adopted in bits and pieces. In fact, that's exactly how they should be adopted.  There is no magic wand or Y2K deadline. We just need to make sure that someone knows about all the bits a pieces and that it's part of an overall plan. I trust that the ACORD Framework (under development) will be a good tool for standards-setters and implementers alike because it provides an enterprise view.

So yes... it does feel like we are constantly pushing a stone up the hill.  It is the reason why the industry created ACORD back in 1970.  To carry the torch. To keep the flame burning amidst all the change and noise. You never actually get to the top of the hill and watch the stone speed down the other side. Sorry. No business is like that.  There's always change. There will always be another hill.  ACORD's job is to provide you with the tools to make stone rolling a lot easier.

The Patty Hearst Syndrome in IT

It's the Stockholm Syndrome in which a hostage shows signs of loyalty to the hostage-taker regardless of the danger. Patty Hearst, the granddaughter of publisher William Randolf Hearst, gained notoriety in 1974 when she was kidnapped and participated in a bank robbery. Are you a hostage to your computer, a slave to your system or vendor? Think about it..

No one wants to be viewed as making a bad decision, so people tend to justify a purchase by looking at the positive and ignoring the negative. Or they become advocates for their captors to court favors or  to protect their investment.  Of course, there are also people who only look at the negative but realize they are a hostage and constantly complain about it.

CIO's who realize that they are locked into solutions (because the cost of switching is too high or there is no other choice) can still influence the future rather than merely submit to it. It may require a longer term plan that includes adding more choice or flexibility.  Industry standards must be part of that plan and customers should not settle for arcane proprietary interfaces that even make the vendor hostage because of their inability to change.

There is plenty of lip service about customer focus today. American Express has members; look at your card.  And large IT providers have partners.  But no matter how you slice it, there's a dog and then there's a tail. But the tail can wag the dog (1997 Dustin Hoffman). No system is perfect, so  it makes sense to always be somewhat dissatisfied with the status quo. It doesn't sound like fun, but quite honestly, you'll never change the landscape unless you can be constructively rebellious.  It's quite obvious to others that we're hostages. It's how we behave that defines us, our reputation and our legacy with the organizations that we serve.   See Video

eForms Bridge Analog Digital Worlds

We are hard at work to improve ACORD eForms because I do not foresee a purely digital world no matter what pundits may say. Yes, the bulk of information flowing through fiber optic cables or over radio frequencies will be system to system messaging. And ACORD XML Messaging Standards will be the catalyst for moving this information in our business. But the wall that divides our digital and analog world is... well... right in front of your eyes.

People live in the analog world and we do have a symbiotic relationship with the digital world. (My Blackberry is chirping as I type). There was a time when everyone thought that ACORD Forms would be replaced by data messaging between computer systems. It didn't happen and I do not see it happening anytime soon.  eForms are smart because they allow people to enter the data to save, print, fax or email. And they also allow people to save a data file that separates the captions and lines from the data itself. That data file can be used in many ways by system developers in order to avoid re-keying the information.

Almost all ACORD Forms in circulation today originate in agencies that use software products from vendors licensed by ACORD.  Our goal is to make it easier for those vendors to keep up with changes and avoid work that ACORD can do for all of them.  Insurers are typically recipients of ACORD Forms and they too will benefit by eForms where electronic messaging is not available or applicable.

I'll keep you posted on our progress and I look forward to hearing your thoughts on eForms.

Batch & Flow

Strategy and execution in information intensive organizations is hard to handle because the nature of these businesses is abstract. Information is a slippery quantity at the best of times. If only the insurance industry had the hard characteristics of manufacturing industry: visible raw materials and measurable transformation processes. We might then be able to apply some of the wisdom used to reinvent traditional businesses for the modern competitive world.

In fact, insurance businesses are not so very different from factories. Manufacturing industry has much to teach us, especially in the area of “batch and flow”. In their classic work on "Lean Thinking" the application of Japanese “lean” techniques to American firms, authors James P Womack and Daniel T Jones describe how altering production processes to single-piece flow improves profitability, productivity, flexibility and time to market for companies large and small.

Insurance looks like a classic batch industry. Carriers are white-collar factories organized into specialized departments where trained staff process materials in a kind of production line. Workflow techniques make the manufacturing analogy explicit. Internal systems act as a conveyor belt, shifting work from station to station.

From the perspective of Womack and Jones, insurance is also characterized by the most visible inefficiencies of the traditional batch approach: re-handling and holding. In batch manufacturing systems, parts or assemblies are frequently moved, stored, retrieved and reworked. Much of a product's period of creation is in fact spent sitting waiting. The same applies to the product design process. Insurance shares these characteristics, with policies or claims spending much of their time in storage or transit and with much staff and partner time dedicated to querying the current status of items.

Batch manufacturing takes its cue from the supposed scale economics of heavy machinery. If it takes several shifts to reconfigure a machine tool, then it makes sense to produce a large number of items between changeovers. However, the “lean thinking” movement in manufacturing targets faster turnaround of machine changes, reduced inventory and smaller, more frequent, deliveries.

I believe that modern practice in our industry similarly takes its cue from habits – or beliefs – connected with our own heavy machinery: the computer and the communications network. It may be that we adhere to batch working methods because we haven't realized that our machine tools are much more flexible than we think.

Here's the hint: If you know COBOL, you'll appreciate that the bread-and-butter of the earliest business information systems was MOVEing data items in and out of storage. And if you can imagine a world before ubiquitous computing, you'll quickly conjure up a vision of file folders being pushed around in trolleys, dropped in in-trays and stacked on shelves.

If you could control every single aspect of a piece of business from inception to completion, then there would be no reason to delay that piece of business. It would occur in real time. You might, for example, design an insurance product for a client, sell it and underwrite it in one continuous action. The reason you don't do this is most likely because you don't own all the pieces of the jigsaw or because you are set up with barriers that block such flows. ACORD Standards allow data to Move and the business to Flow.

The above excerpt is from my new book to be released in 2008.

The Importance of Interfaces

Olympic relay races are often won by teams whose members do not have the fastest aggregate times. When Mr Yves Morieux of Boston Consulting Group talked to members of a French Olympic medal-winning women's relay team, he was told that at some point you have to decide whether to run your guts out and literally not be able to see straight when you pass the baton; or whether to hold something back to make a better baton-change and enable your team-mate to run a faster time. The value of this sort of decision-making – each individual's contribution to the team – is, he says, beyond measure. (The New Organization: a survey of the company. The Economist, January 21, 2006).

Executives are focusing more on how the organization interfaces with trading partners. When you purchase a product or a service that relies on effective data transfer across the value chain, you know how frustrating it can be when those interfaces are cumbersome, inefficient or otherwise broken. Plug industry standards into your strategy.

Redefine the Enterprise with Industry Standards

“Enterprise” is one of those words that's become ubiquitous over the past few years, especially in the area of technology. I notice that the “enterprise edition” of a software product costs more than the regular version, and I expect Starbucks to offer Enterprise-size lattes any day now. But is that all “enterprise” means large? complex? pricey? exclusive? I'm concerned that for some people “enterprise” has taken over from the now-taboo term “central” – as in “central planning” – and is used to designate staff functions or oversight processes.

Our most urgent job as leaders and doers is to save the true meaning of enterprise. Enterprise isn't just a buzzword. It's the concept that, more than any other, expresses how contemporary business works, and how tomorrow's business practices diverge from yesterday's. Once your organization is switched on to the implications of the enterprise concept, the need for standards throughout its activities becomes clear to everyone. For the insurance industry, getting “enterprise” is the vital shift of mindset required for survival.

“Enterprise” is a pretty straightforward idea, but one that challenges the status quo. Enterprise means the chain of organizations involved in a value stream. The beneficiary of the value stream is the customer, and the customer is seen as pulling the chain. The enterprise concept is demand-led, rather than supply-constrained.

I know that sounds theoretical. The concept makes for nice diagrams, and the primacy of the customer makes for good apple pie. The hard part for many to swallow, and the part that they overlook, is the implications of the chain. When we say “enterprise”, we're saying that the organization level of most importance to the business is not the company that may employ us. The organization level that matters is the entire family, or ecosystem, of organizations that collaborate to serve a customer need.

Furthermore, this constellation of partners may vary radically across product and service lines. Depending on which value chain we choose to examine, we may see an entirely different constitution of the enterprise. The ecosystem also may change over time, with partners changing depending on their ability or eagerness to service the enterprise. ACORD Standards developed in partnership with all the trading partners in the value chain is key to this emerging vision of the enterprise.

The above excerpt is from my new book to be released in 2008.

Yes... Standards Do Change

I was at a meeting listening to some of the challenges organizations face when adopting industry standards. One of the issues had to do with the way standards evolve and change.  The misunderstanding was that industry standards were permanent or static. One individual pointed to the banking community as an example of standards that never change. Not true.  While some industry standards have a longer shelf life than others, the fact is that business needs change and  that will change the standards. Advances in technology, modeling and meta-languages may also give rise to changes in the standards.

Financial institutions, in fact, are quite familiar with the need to work with a suite of standards that serve different purposes or managing versions of the same standard among trading partners. While this may appear  to be a problem  to some,  it is much less of a problem than  not having  standards at all.  Here is a copy of  Dialogue, a magazine publishing by SWIFT . I met with the Head of Standards for SWIFT and we spoke about the challenges we face in managing standards in a dynamic marketplace. The ACORD staff and SWIFT are meeting in London later this month to explore ways in which we can work together.