2004 C.I.P.A. Winners
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Desjardins General Insurance GroupExporting success to acquired subsidiaries through business process transformation
DGIG offers a full range of home and automobile insurance for individuals and groups across Canada, as well as for businesses in Québec. Challenge In September 2000, DGIG acquired the two Canadian P&C insurance subsidiaries of the Canadian Imperial Bank of Commerce as part of its nationwide business expansion program. To support the acquisition, the parent company launched a lowercase project aimed at completely integrating its subsidiaries’ operations outside Québec. This initiative necessitated total transformation of the business processes, systems and technologies that formerly supported the subsidiaries’ business units, including Sales, Claims, Collections, Customer Service, Human Resources, Physical Resources, Finance and Technology. Objectives For the subsidiaries, the high-level objective was to adopt the philosophy of DGIG and harness its proven processes and systems to enhance customer service, provide better-adapted products and services and improve productivity. At the same time, these new products and services needed to be customized to meet the requirements of local markets. For the parent company, the primary focus was to increase market share by making excellence a standard throughout the organization. To accomplish this, DGIG’s workforce would need to operate under a set of unified values and philosophies, yet still reflect the cultural and environmental differences specific to each market. On a tactical level, the project objective was to bring the acquired subsidiaries "up to speed" with DGIG, while meeting established deadlines and budgets. Solution The three-year project involved a total revamp of the subsidiaries’ business processes, systems and technologies, required the equivalent of 70,000 person-days of effort and cost $68 million for the transformation. Organizationally, the acquired subsidiaries’ business models required far-reaching changes to reflect the integration of DGIG’s mission, vision, values and strategic priorities. From the perspective of human resources, all business segments and employees working at subsidiaries outside Québec were affected by the project. Its success was a pre-requisite for winning the confidence and commitment of existing staff, an essential condition for future DGIG successes in Canada. At the technological level, the initiative led to the replacement of the subsidiaries’ incomplete, non-integrated and low-quality software environment with DGIG’s integrated series of applications and technology. These applications were also adapted to other Canadian provinces’ regulations and made available in English. Here are just a few of the project’s many achievements:
Traditionally, 70% of integration projects following an acquisition fail; but thanks to a strict application of standards and the centralization of information technology at head office in Lévis, Québec, this project was successfully executed and met established deadlines and budgets. All business processes, systems and technologies were implemented by the end of 2003. By the end of the implementation phase, concrete results were already being observed at all levels of the organization. The most important result was that the project made doubling the sales of the company outside Québec achievable in 2003. In terms of ROI, the $68 million investment will be recouped in less than two years. Innovative Use of Technology Prior to their acquisition by DGIG, the two CIBC P&C insurance companies made little use of technology. Functions such as underwriting, pricing, account collection, processing bodily injury claims and client document mailings were largely done manually. Already an innovator in the industry in Québec with respect to Information Technology, DGIG adapted and installed its entire integrated set of systems within these new subsidiaries. It also developed a new application specifically for managing bodily injury claims, the first of its kind in Canada. All these processes, systems and technologies were implemented using a target global architecture that promotes operational excellence. The guiding principles for the establishment of this architecture included: interoperability, flexibility, effectiveness, simplicity and security. This target architecture, which was highly innovative for the Canadian insurance industry, gave rise to a highly successful technological migration project of a size rarely seen. "We knew we had the products, systems and technologies to equip the companies we had just acquired for success," remarks Pierre Deschênes, Senior Executive Vice President, Information Technology at DGIG. "Our greatest challenge was to preserve the heart of these organizations while we fused our cultures together. The human integration was very important to us and we invested considerable care in it. At the end of the day, that’s what has made the transformation a success." A 2004 CIPA Winner! For its exceptional and innovative application of Information Technology to solve real-world business problems and bring greater benefit to all its stakeholders, Desjardins General Insurance Group was awarded a 2004 Canadian Information Productivity Award of Excellence in the Organizational Transformation category.
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