How meeting customer expectations drives digital transformation at State Farm

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Apptio and Financial Times recently released findings from a survey of 555 executives highlighting the changing economics of IT, specifically how the push for digital transformation disrupts C-suite dynamics and positions the CIO as the most effective corporate change agent.

Most significantly, the findings revealed that agility, advocacy and data are the new IT currency.

Information Management spoke with Ashley Pettit, senior vice president of enterprise technology at State Farm Insurance, for her take on the most important lessons from this study.

Information Management: Apptio and Financial Times recently released their study on the impact of digital transformation on the C-Suite and corporate strategies. What do you see as the most important message in that study?

Ashley Pettit: The need to raise the IT acumen of the entire business really connected with me. Over the last few years State Farm went through our own technology business management (TBM) journey, which started with conversations and collaboration between our technology area and the finance department.

One thing we learned from TBM was the importance of being able to quantify to all of our business partners the cost of IT for their areas so the appropriate business decisions could be made. Through the collaboration between our IT and finance areas at State Farm we were able to track IT costs and deepen the conversation between business and IT which enabled improved interactions across the lifecycle of initiatives - from strategy and planning, to investment decisions, to ultimate cost and value.

IM: What do you feel were the most surprising findings?

Pettit: Again, based on our journey over the last several years at State Farm, we understand first-hand the vital importance of having the technology and finance areas within the company working together for the greater benefit of the organization as a whole. We believe one of the keys to our success with implementing TBM at State Farm has been the strong partnership between our IT and finance shops from the very beginning.

IM: What has your organization recently done, or what is it currently doing, with regard to digital transformation?

Pettit: Customer expectations are a driving force behind recent and ongoing changes at State Farm. We continue to build and enhance solutions that put customers’ needs at the forefront, empowering them to determine how, when and where they’ll connect with us. State Farm continues to collaborate with industry experts to ensure we have the insights needed to service customers most effectively.

Enterprise customer relationship management (ECRM), is a core component of our digital transformation strategy and our ability to simplify and enhance our ability to reach customers on the channel of their choice. We’re building a more modern and contemporary platform that is easy to use, seamless and allows us to further create personalized experiences for the customer.

IM: How do the findings in the above study compare with what your organization has experienced?

Pettit: Some of the findings like increasing the IT acumen for all business areas really resonated since we knew from our recent experience and the success that has come out of these very important conversations the value of that.

We believe one of the keys to our success with implementing TBM at State Farm has been the strong partnership between our IT and Finance shops from the very beginning. That strong relationship wasn’t reflected by a large number of respondents in the study, so we feel fortunate to have that. We effectively leveraged the partnership between IT and finance to engage our business partners which brought additional credibility to the conversation.

IM: How do you feel digital transformation projects are impacting the role and responsibilities of the senior IT leader?

Pettit: It’s becoming more challenging to isolate or segment business strategy conversations from technology conversations. At State Farm, our senior leadership team has recognized this and our digital transformation strategy and initiatives are clearly help to transform our business and not just the underlying technology.

As the senior IT leader, this involves me modeling and encouraging my team to become increasingly knowledgeable about our business and to help shape and inform business strategies and opportunities. It goes beyond having a seat at the table to helping shape and drive business solutions and new product opportunities leveraging technology.

IM: Do you believe digital transformation will ultimately be a friend or foe to the CIO role in terms of clout with the C-suite?

Pettit: State Farm has a rich heritage of innovation and recognizes driving change for the future is important. We know that because we’ve been doing it for nearly a century.

To do that we’re leveraging technology in new and unique ways, and oour leadership understands the value in what we offer which is the ability to overlay human relationships with enhanced technology for the benefit of our customers. And, as mentioned previously, we see a growing interest and reliance on technology leaders to help drive our business forward. So easily, digital transformation is a friend to the CIO role in terms of clout and impact.

IM: What warnings would you give to other IT leaders regarding digital transformation efforts?

Pettit: You have to have courage to start this critical conversation and address what really is an elephant in the room. You have to have the courage to be uncomfortable, take on important topics with the goal of changing old patterns and continually improving.

There has to be an enterprise focus – how are we best serving customers and using their resources to help them. You can’t get caught in a small view of “my product” or “my department” or “what’s best for me”….it has to be what is best for us and those we serve.

And you better have a lot of humility. Working on complex problems requires vulnerability and a willingness to be wrong, learn, course correct and prepare to take it on again. If you think you have all the answers, you don’t.

IM: What do you consider to be best practices with digital transformation that will make the IT leader shine and grow in influence?

Pettit: Not being afraid to have crucial conversations with your peers in other business areas – remembering the ‘big picture’ which is what is best for the organization and ultimately your customers.

One best practice that has really seen tremendous success in terms of organizational results and collaboration with other business areas was the development of our own Technology Business Management Council (TBMC) at State Farm. Collectively, we are helping each other better manage and understand our IT investments and how they align to support business strategies and outcomes, which has been key.

IM: Any other final advice or observations?

Pettit: IT is no longer forcing tough conversations. Instead, we’re giving business partners a different and more transparent view, and that’s changing the way we work together and the candor of our conversations

In the past, projects were often thrown over the wall to IT with a hope and prayer that we’d pull it off in time. Now, we are getting more invitations to the table early on as business areas look to IT for leadership in groups such as TBMC and to help them plan the timing for future capabilities and features.

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