A look at global insurance provider JLT's cloud business case to get senior exec buy-in

 

Jardine Lloyd Thompson (JLT), a global insurance and reinsurance provider, is slowly shifting its business to the cloud, with the view that an 'as-a-service' model provides huge business benefits. However, transitioning hasn't been an easy cultural shift for the company, particularly from a senior management buy-in perspective.

John Mayall, JLT's chief architect, was speaking this week at Cloud Expo Europe, where he explained that the company's chief executive and senior executive team are slowly starting to realise that certain negative connotations attached to the cloud aren't entirely true and provided attendees what is essentially a 'business case' for moving to a cloud-based model.

Mayall began by providing an anecdote of how JLT's approach to cloud has been influenced from the top-down. He said:

The chief executive of JLT went fishing with the CEO of one of the big oil companies and the CEO of the oil company said: don't touch cloud, we had ten days out, our mail was out for ten days. So the message I got back after he got back from his fishing trip was, we aren't doing cloud. I did a bit of digging around this and it turns out that the problem wasn't actually cloud, it was an internal issue.

The concerns that senior management have are about outages, availability, data privacy - they are asking me about these things. Also, support – surely if we give our support to a third party then we are down the list? Where do we sit in the queue?

However, things are beginning to change, and Mayall explained how the prevalence of 'cloud' as a topic in the wider business press has meant that management at JLT are starting to ask how the benefits of the cloud could be introduced into their business. Mayall said:

What's happening is that we are starting to get more interest from management. What's driving this? What senior management at JLT are saying to me is: how do we move at the speed of consumer tech? They've all got iPhones. They are seeing change rapidly. But what we have got at JLT is an organisation that is quite cumbersome.

Our chief exec doesn't read the technology trade press, he reads the financial times, the Economist, etc. Some of the stats from these publications, which are the sorts of things that gets senior management interested in cloud, include things like: 40% of companies downsized after cloud adoption. So they're asking, how can we reduce our IT department? 80% of Fortune 100 companies are using Microsoft cloud (according to Microsoft) – why are we not doing it? The interest starts to peak there. 82% of companies saw improvements around speed of delivery within six months, etc.

However, Mayall and his team needed to provide answers to the concerns that senior management had with the cloud. He outlined these responses at the Cloud Expo event. He said:

Security – “The question I put back to management is: you've got personal data and you've got the choice to put it in JLT's network or Microsoft or Google's network, which would you choose? We spend hundreds of thousands on security, they spend millions. You'd put it in the cloud.”

However, Mayall did say that he is only looking to the 'big' cloud providers (such as Amazon, Google, Salesforce). He said that he has had discussions with some cloud providers that have built their own datacentres, but he is dismissing these. JLT is only interested in cloud providers that have proven a certain level of capability.

Outages – “The message we have gone with is, let's push our non-critical processes out to the cloud and deal with that first. Having done this, we are now starting to move some more critical processes to the cloud.”

Availability – “You are better off in the cloud. If our network goes down, we can get on WiFi, you can go to Starbucks, you can go home, get on 3G.”

Data privacy – “We need to know what we've got, where it is etc. What we do is we go to the providers and ask them what they think about data privacy, we don't tell them what we think first. We then map this against our expectations, saying what we've got around data and then we use those providers that 'get' data privacy. And we do have providers that get it.”

Support – “For the providers it's not in their interest not to support. They all follow a process of first, second, third line support. And you can pay. For example, with Salesforce, basic level support is two hours, premium support gives you support within one hour, or there's even premium plus. You can pay for traditional support, it's really not a problem.”

Architecture – “It's forcing a standard process and from an architecture perspective that's great, the more standard process I get, the cheaper it is an an organisation.”

Downtime – “Google was down last year for 4 and a half hours and Amazon Web Services was down for 2.4 hours, which is way better than we can achieve. They can provide better than we can, because they've invested more money in it.”

Scalability – “We bought a new US system for £100,000 implementation, an internal broking platform. I can get a cloud system, which has some limitations to it, but I can I can get that for £100,000, versus £3 million.”

Speed to market – “We use an outsourcing provider, it takes them 8 weeks to get a service turned around. That's terrible. We can do it in less than a day now, we can spin things up, try things out.”

However, Mayall was also keen to explain to delegates at the event that cloud doesn't come without its challenges. For example, he explained, that he was aware of a large cloud provider that had recently had a discussion with a CIO about moving to the cloud, where the CIO didn't realise any of the savings that he had expected. This was because the CIO in question hadn't properly managed use of the cloud. Mayall said:

People talk about saving money [in the cloud] and you can save money, but you have to be careful.  The problem [with that CIO's project] was that he didn't manage it properly, he went for like-for-like with the cloud provider. What happened was he didn't manage down utilisation, utilisation was 25% - that's about managing and monitoring what you do in the cloud. You need to be careful. The problem with developers in the cloud, as well, is that they just buy more and more – you need to be careful with that.

Mayall also highlighted that whilst he is keen to move as much to the cloud as quickly as possible, there are certain considerations around how existing on-premise applications are integrated, that makes it tricky. He was keen to get across the point that it's not simply a case of swapping one on premise application for one in the cloud. He said:

I have a choice right now with applications about whether we move that to the cloud or not. The

challenge is all the dependencies that exist around an application, it's not a simple task of saying yeah I'll move that to the cloud, because all the systems that depend on that in some way. If I go to a SaaS service, I need to make sure I can make sure I can meet the data requirements of those systems going outside. That's a big challenge, that's not simple. Also, those integrations can be quite complex. So it's not a simple task of just moving it across, you need to put some thought into this.

Some of the other challenges that Mayall highlighted, included:

Being vanilla - “The other challenge we face at the moment is that the business sometimes feels like it is losing something. With the internal systems, if they want a green one made blue, we can do it. With the SaaS providers, it's green or it's blue, it's one or the other. They are restricted, so they find that a business frustrating.”

Security management - “From a security perspective, the big change here is the perimeter. If you think about on-premise, it's a nice circle, you can control it, but what we have got now is a perimeter that is all over the place. We have got providers all over the place in the cloud and that process is quite jagged now and it needs a different way of thinking. So, security architects are engaging with third parties to help them understand that better.”

Support – “Support is changing to become relationship management. We still have internal systems that need support, but we have first line in the company and then second and third line out with the cloud providers. So, the support role is changing.”

However, despite these challenges, Mayall is convinced that the cloud is the way forward for JLT. He provided a couple of examples of where it has proved beneficial for the business. For instance, he explained that the US arm of JLT has built a new broking service, which costs half the price of one of the developers in the UK for a similar platform – a clear cost benefit.

Mayall also explained that JLT has seen clear benefits in terms of speed of deployment. He said:

We've got more choice, we can switch on and switch out these things, cost is lower and and the speed of delivery is better. In the US we created a new service around specialty – things like rockets, ships etc. - and they were using spreadsheets from day one. You can't manage a business on spreadsheets. So what we've done is put a broking platform in – to do it internally would have taken 18 months to three years, so would have been using spreadsheets for that entire time.

Or we could go to the cloud. Okay, the cloud forces us down a standard process, but we can get it done in three months. That's one of the benefits of how we can innovate and allows us to focus on where we want to innovate.

However, despite having to use standard processes for certain platforms, Mayall explained how JLT is differentiating itself from the competition – whilst still using the cloud. Essentially, JLT is allowing start-ups to experiment with data, by tapping into JLT's cloud, to see if they can provide insight that wasn't possible before. Mayall said:

We plan to differentiate by providing more data on risks to client – it's not an analytics solution, it's a data solution. We are working with third parties, start-ups in particular, asking them what they can do with data that's different.

It's our cloud solution that they can plug into, where they can try things out and get out again quickly. Let the start-ups try stuff, demonstrate to us the value and then get out of our cloud again. We talk about the broking platform being standard, that's vanilla, but this is where we differentiate. It's that agility that you get from cloud.