Editors' Cuts

Steps Toward a Hybrid Development Philosophy

Chris McMahon
Insurance Experts' Forum, September 11, 2013

At Nationwide, they have a different and somewhat counter-intuitive philosophy for software development, explains Guru Vasudeva, SVP and CTO of Nationwide. He describes it as sort of a mashup up of agile, lean software development (Lean) and capability maturity model integration (CMMI) philosophies.

“In financial services and insurance, customers don’t really touch and feel our products,” Vasudeva says. “It’s a highly information-centric business, and as a result, system development and maintenance is really the manufacturing part of the organization. To be really good at it, we have embraced Agile, Lean and CMMI philosophies to get good at software engineering, and we have seen significant success with that.”

While many IT professionals would argue that lean, agile and CMMI are mutually exclusive, he says the economic value can be measured and improved compared to the old way of doing software development.

“It’s a completely different way of doing things. People think they know what they want. But, as we have proven over decades of application development, they don’t know what they want. They really know what they want when they see it. The concept of Agile is ‘let’s discover what you desire rather than what you’ve planned.’ That’s a very different way of thinking, and it’s a change for IT associates. We felt that by not only driving the transformation but also adding the economic underpinnings, we could show that this method is better and hold ourselves accountable. What if it’s a bad idea? Then we want to give it up.”

In the past year, Vasudeva says IT has delivered 101 releases and produced $15 million in combined annual savings; 83 percent of delivered projects were better than industry average; 59 percent had zero defects, and they were able to reduced labor costs by $7 per hour through standardization.

To start, Vasudeva suggests changing how people behave by changing what they do, an idea he attributes to John Shook, industrial anthropologist and a thought leader in the Lean community.

The old way was to try to change thinking in order to change behavior. Under the new model, one changes behavior in order to change thinking. For example, by creating a flatter work environment, flexible teams, holding team huddles, short daily meetings and measuring successes.

Agile and standardization can work together, Vasudeva says. And in fact, the best way to scale Agile across the enterprise is to standardize, he says, and one can foster a culture of continuous improvement by empowering the staff to challenge the standards and relentlessly focusing on problem solving.

He also stresses the importance of focusing on economic value and benefit realization by measuring baseline productivity and labor costs and making key metrics visible and embedded into the day to day operations.

Chris McMahon is a senior editor for Insurance Networking News.

Readers are encouraged to respond to Chris by using the “Add Your Comments” box below. He also can be reached at chris.mcmahon@sourcemedia.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

CIOs: “We Don't Have Enough People to Run Our Mainframes”

Insurers will be competing with other industries for both legacy and “new IT" talent.

4 Ways to Keep Insurance Data Quality Healthy

Continually building trust and credibility in the data is the key to a successful data warehouse.

Customer Experience Trend Watch

Three recent HR moves demonstrate that large life insurers recognize customer experience as a strategic differentiator.

Insurers Have a Lot of Data, But Too Many Silos

Insurers actually have more data analytics resources than other industries.

Are Data Centers Shrinking or Expanding?

Today's data centers are doing far more with much smaller footprints.

Too Much Manual Effort is a Show Stopper

Examining the administrative burden of doing business in the E&S market.