Transcript of a BriefingsDirect podcast on how Achmea Holding has taken big strides to run their IT department more like a business.

1. ERP for IT Helps Dutch Insurance Giant Achmea to Reinvent
Processes to Improve Performance Across the Board
Transcript of a BriefingsDirect podcast on how Achmea Holding has taken big strides to run
their IT department more like a business.
Listen to the podcast. Find it on iTunes. Sponsor: HP
Dana Gardner: Hello, and welcome to the next edition of the HP Discover Performance
Podcast Series. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your
moderator for this ongoing discussion of IT innovation and how it’s making an
impact on people’s lives.
Once again, we're focusing on how IT leaders are improving performance of
their services to deliver better experiences and payoffs for businesses and end-
users alike.
I am now joined by our co-host for this sponsored podcast, Georg Bock. He is Director of the
Customer Success Group at HP Software, and he's based in Germany. Welcome, Georg.
Georg Bock: Thanks a lot. Welcome, everybody, to this podcast.
Gardner: Our discussion today will take a deep look at Achmea Holding, one of the largest
providers of financial services and insurance in the Netherlands, and we'll examine
how they've taken large strides to run their IT operations more like an efficient
business. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]
We'll learn how Achmea has rearchitected its IT operations to both be more
responsive to users and more manageable by the business, based on clear metrics.
To learn more about how they've succeeded in making IT governed and agile, even to attain
enterprise resource planning (ERP) for IT benefits, please join me now in welcoming our special
guest. We're here with Richard Aarnink. He is the leader in the IT Management Domain at
Achmea in the Netherlands. Welcome, Richard.
Richard Aarnink: Thank you very much and welcome, all, to this podcast as well.
Gardner: Let me begin with asking you, as an IT architect, why is running IT more like a
business important? Why does this make sense now?
Aarnink: Over the last year, whenever a customer asked us questions, we delivered what he
asked. We came to the conclusion that delivery of every request that we got was an intensive
process for which we created projects.

2. It was very difficult to make sure that it was not a one-time hero effect, but that we could deliver
to the customer what he asked every time, on scope, on specs, on budget, and on time. We looked
at it and said, "Well, it is actually like running a normal business, and therefore why should we
be different? We should be predictive as well."
Gardner: Georg Bock, this notion of running IT with the customer most in mind I guess is a
little different than say 10 or 15 years ago. Is this something you are seeing more and more in the
field?
Trend in the market
Bock: Yes, we definitely see this as a trend in the market, specifically with the customers that
are a little more mature in their top-down strategic thinking. Let’s face it, running IT like a
business is an end-to-end process that requires quite a bit of change across the organization, not
only technology, but also process and organization. Everyone has to work hand in hand to be, at
the end of the day, predictable and repeatable in what they're doing, as Richard just explained.
That’s a huge change for most organizations. However, when it’s being done and when it has
lived in the organization, there's a huge payback. It is not an easy thing to undertake but it’s
inevitable, specifically when we look at the new trends around cloud multi-sourcing, mobility,
etc., which brings new complexity to IT.
You'd better have your bread and butter business under control before moving into those areas.
That’s why also the timing right now is very important and top of people’s minds.
Gardner: Before we learn more about what you have done with your IT operations, Richard, tell
us a bit about Achmea, the size of your organization, what you do, and why IT is so
fundamentally important to you?
Aarnink: As you already stated, Achmea is a large insurance provider in the Netherlands. We
have around eight million customers in the Netherlands with 17,000 employees.
We're a very old and cooperative organization, and we have had lots and lots of
mergers and acquisitions in the last 20 years. So we had various sets of IT
departments from all the other companies that we centralized over the past years.
If you look at insurance, it's actually having the trust that whenever something
happens to a customer, he can rely on the insurer to help him out, and usually this
means providing money. IT is necessary to ensure that we can deliver on those promises that we
made to our customers. So it’s a tangible service that we deliver, it’s more like money, and it’s all
about IT.

3. Gardner: Tell us a bit more about the scope of your IT department and how you're able to bring
together a variety of different IT departments, given your mergers and acquisitions activity, just a
bit more detail on your IT organization itself.
Aarnink: Of the 17,000 employees that we have in the Netherlands, about 1,800-2,000
employees work in the centralized IT department. Over the last year, we changed our target
operating model to centralize the technologies in competence centers, as we call them, in the
department that we call solution development.
We created a new department, IT Operations, and we created business-relationship departments
that were merged with the business units that were asking or demanding functionality from our
IT department. We changed our entire operating model to cope with that, but we still have a lot
of homegrown applications that we have to deliver on a daily basis.
Changing the department and the organizational structure is one thing, and now we need to
change the content and the applications we deliver.
Gardner: You are leading in the IT management domain area and you also have a strategy and
governance department. How has that briefly allowed you to better manage all of the aspects of
IT and make it align with the business? What organizational structure have you been able to
benefit from here?
Strategy and governance
Aarnink: To answer that question I need to elaborate a little bit on the strategy and governance
department, which is actually within the IT department. What we centralized there were project
portfolio and project steering, and also the architectural capabilities.
We make sure that whatever solution we deliver is architectured from a single model that we
manage centrally. That's a real benefit that we gained in centralizing this and making sure that we
can, from both the architecture and project perspectives, govern the projects that we're going to
deliver to our business units.
Gardner: Georg, this notion of a strategy and governance department that helps to standardize
these processes, align for automation, and make visible what’s actually going on in IT in a
common way, I suppose gets at that systems-of-record approach and even ERP for IT approach.
Is this something Achmea is in a leadership position on? Do you see this as a model for others, or
is this something that’s happening more generally in the market?
Bock: Absolutely, Achmea is a leader in that, and the structure that Richard described is
inevitable to be successful. ERP for IT, or running IT as a business, the fundamental IT
processes, is all about standardization, repeatability, and predictability, especially in situations
where you have mergers and acquisitions. It’s always a disruption if you have to bring different

4. IT departments together. If you have a standard that’s easy to replicate, that’s a no-brainer and
winner from a business bottom-line perspective.
In order to achieve that, you have to have a team that has a horizontal unit and that can drive the
standardization of the company. Richard and Achmea are not alone in that. Richard and I have
quite a number of discussions with other companies from other industries, and we very much see
that everyone has the same problem, and given those horizontal teams, primary enterprise
architecture, chief technology officer (CTO) office, or whatever you like to call those
departments, is definitely a trend in the industry and for those mature customers that want to take
that perspective and drive it forward that way.
But as I said, it’s all about standardization. It’s not rocket science from an intellectual
perspective, but we have to cut through the political difficulties of driving the adoptions across
the different organizations in the company.
Gardner: Let’s look a bit more deeply, or in a detailed way, at the journey that Achmea has
taken. Richard, what sort of problems or issues did you need to resolve, what were some of the
big early goals that you had in terms of changing things for the better?
Aarnink: We looked at the entire scope of implementing ERP for IT and first we looked at the
IT projects and the portfolio. We looked at that and found out that we still had several
departments running their own solutions in managing IT projects and also budgets. In the past,
we had a mechanism of only controlling the budget for the different business units, but no
centralized view on the IT portfolio, as a whole, for Achmea.
We started in that area, looking at one system of record for IT projects and portfolio
management, so we could steer what we wanted to develop and what we wanted to sunset.
Next, we looked at application portfolio management and tried to look at the set of applications
that we want to currently use and want to use in the future and the set of applications that we
want to sunset in the next year and how that related to the IT project. So that was one big step
that we made in the last two years. There's still a lot of work to be done in that area, but it was a
big topic.
Service management
The second big topic was looking at service management. Due to all the mergers, we still had
lots of variations on IT process. Incident management was covered in a whole different way,
when you looked at several departments from the past.
We adopted service desks to cater to all those kind of deviations from the standard ITIL process.
We looked at that and said that we had to centralize again and we had to make sure that we
become more prescriptive in how these process will look and how we make sure that it's
standardized.

5. That was the second area that we looked at. The third area was more on the application quality.
How could we make sure that we got a better first-time-right score in delivering IT projects?
How could we make sure that there is one system of record for requirements and one system of
record for test results and defects. That’s three areas that we invested in in the first phase.
Gardner: One of the things I hear from organizations, Richard, is that some people fear that by
going to standardized processes and rationalizing their portfolio, they will lose control over
applications or they won’t be able to customize or change applications. I think, however, that that
might be a false premise.
Is there something that you found in moving towards more standardized processes that allows
you to be more responsive and agile with your applications? Has the ability to change
applications been effective?
Aarnink: It’s still a little bit early to say, and your thoughts are right. There's always a discussion
with the business units that in the past owned their own set of applications. They want to control
that for being agile, but they also see that the cost of having all those applications is running up
and up. We become less agile, because we have to solve many problems in all kinds of
applications that they are currently running.
Something had to change, and the financial crisis that we've had from 2008 on emphasized that
we need to lower the total cost of ownership (TCO) on IT and we had to do something about it.
So it was also a top-down statement that we had to do something about it. We changed the
governance to enable us to control that and to make sure that we got the right mandate to enable
us to drive application virtualization.
The other thing is that if you standardize your IT components and your IT applications, you also
enable yourself to deliver faster. It was the first time that we succeeded in delivering a new
policy, a new product, into the marketplace in six weeks, instead of having it in six months or so.
That's is the aim or the goal that we're after, but it’s still too early in the process to look at
benefits in that area and to see the cultural change that this embraced, instead of rejected, from
the business perspective.
Gardner: Well it certainly sounds like the progress that you’ve made so far has allowed you to
increase the time to value, that is to say, make the ability to deliver apps and services to your
end-users, to your customers, happen more rapidly. Is that something that we can attribute to the
changes you’ve made or is it still too soon for that?

6. Change going on
Bock: If you ask our customers, they'll say it's still too soon, but we see that the changes in our
internal IT organization are already going on. I expect that in 2013, we'll gain the first benefits
from this.
Gardner: Georg. I’ve heard this notion of ERP for IT for some time, and I've also heard people
be a bit cynical -- it’s a vision, it’s esoteric, or it maybe science fiction. What is it that you're
hearing from Achmea and what have you have seen in the market that leads you to believe that
ERP for IT is not a vision, but is, in fact, happening and that we're starting to see tangible benefit.
Bock: That’s a very good question. I hear that very, very often and across various distinct
contingencies, but Richard very much nicely described real, practical results, rather than coming
up with a dogmatic, philosophical process in the first place. I think it’s all about practical results
and practical results need to be predictable and repeatable, otherwise it’s always the one-time
hero effort that Richard brought up in the beginning, and that’s not scalable at all.
At some point you need process, but you shouldn’t try that dogmatically. I also hear about the
agile versus the waterfall, whatever is applicable to the problem is the right thing to do. Does that
rule out process? No, not at all. You have to live the process in a little different way.
Everyone has to get-away from their dogmatic position and look at it in a little more relaxed way.
We shouldn’t take our thoughts too seriously, but when we drive ERP for IT to apply some
standard ways of doing things, we just make our life easier. It has nothing to do with esoteric
vision, but it's something that is very achievable. It’s about getting a couple of people to agree on
practical ways of getting it done.
Then, we can draw the technological consequences from it, rather than the other way around.
That's been the problem in IT from my perspective for years. Technology always came first and
now we look for the nail that you can use that hammer for. That’s not the right thing to do.
Gardner: Just to be clear, this isn’t something that’s specific to Achmea or a certain vertical
industry. This is really across all industries in all regions. This is moving towards a more
scientific and practical way of doing IT.
Bock: Absolutely. From my perspective, standardization is simply a necessary conclusion from
some of the trial-and-error mistakes that have been made over the last 10-15 years, where people
tried to customize the hell out of everything just to be in line with the specificity of how things
are being done in their particular company. But nobody asked why it was that way.
If you ask that question, you very quickly get to the revelation. It’s not that different. Richard, if
you recap some of the discussions we had with your architect colleagues in other companies, I
think you might want to comment on that.

7. Aarnink: I completely agree. We had several discussions about how the incident process is
being carried out, and it’s the same in every other company as well. Of course there are slight
differences, but the fact is that an incident needs to be so resolved, and that’s the same within
every company.
Best practice
You can easily create a best practice for that, adopt it within your own company, and unburden
yourself from thinking about how you should go for this process, reinvent it, creating your own
toolsets, interfaces with external companies. That can all be centralized, it can all be
standardized.
It’s not our business to create our own IT tools. It’s the business of delivering policy
management systems for our core industry, which is insurance. We don’t want all the IT that we
need in order to just to keep the IT running. We want that standardized, so we can concentrate on
delivering business value.
Gardner: Now that we've been calling this ERP for IT, I think it’s important to look back on
where ERP as a concept came from and the fact that getting more data, more insight,
repeatability, analyzing processes, determining best processes and methods and then instantiating
them, is at the core of ERP. But when we try to do that with IT, how do we measure, what is the
data, and what do we analyze?
Richard, at Achmea, are you looking at key performance indicators (KPIs) and are using project
portfolio management maturity models? How is it that you're measuring this so that you can, in
fact, do what ERP does best, make it repeatable, make it standardized?
Aarnink: If you look from the budget perspective, we look at the budgets, the timeframes, and
the scope of what we need to deliver and whether we deliver on time, on budget, and on specs, as
I already said. So those are basically the KPIs that we're looking for when we deliver projects.
But also, if you look at the processes involved when you deliver a project, then you talk about
requirements management. How quickly can you create a set of requirements and what is the
reuse of requirements from the past. Those are the KPIs we're looking for in the specific
processes when you deliver an IT project.
So the IT project is a vehicle helping you deliver the value that you need, and the processes
underneath that actually do the work for you. At that level we try to standardize and we try to
make KPIs in order to make sure that we use as much as possible, that we deliver quality, and we
have the resources in place that we actually need to deliver those functionalities.
Gardner: I'm afraid that we're almost out of time but I wonder, Richard, if you wouldn’t mind
putting yourself in the position of a master here and relating some of your experience for an
organizations that may not have started down this path towards ERP for IT to the same degree.

8. Now that you’ve done it and now that you’ve been involved with it, do you have any 20-20
hindsight or recommendations that you could provide from your position of experience to
someone who’s just beginning?
Aarnink: It’s a difficult question. You need to look at small steps that can be taken in a couple of
months’ time. So draw up a roadmap and enable yourself to deliver value every, let’s say 100
days. Make sure that every time you deliver functionality that’s actually used, and you can look
at your roadmap and adjust it, so you enable yourself to be agile in that way as well.
The biggest thing that you need to do is take small steps. The other thing is to look at your
maturity. We did a CMMi test review. We didn't do the entire CMMi accreditation, but only
looked at the areas that we needed to invest in.
Getting advice
We looked at where we had standardized already and the areas that we needed to look at first.
That can help you prioritize. Then, of course, look at companies in your network that actually did
some steps in this and make sure that you get advice from them as well.
Gardner: Georg, just quickly, any thoughts on either affirming what Richard said or other ideas
for organizations that are just beginning down the ERP for IT path?
Bock: I absolutely agree with what Richard said. If we're looking for some recipe for successes,
you have to have a good balance of strategic goals and tactical steps towards that strategic goal.
Those tactical step need to have a clear measure and a clear success criteria associated with
them. Then you're on a good track.
I just want to come back to the notion of ERP for IT that you alluded to earlier, because that term
can actually hurt the discussion quite a bit. If you think about ERP 20 years ago, it was a big
animal. And we shouldn’t look at IT nowadays in the same manner as ERP was looked at 20
years ago. We don’t want to reinvent a big animal right now, but we have to have a strategic goal
where we look at IT from an end-to-end perspective, and that’s the analogy that we want to draw.
ERP is something that has always been looked as an end-to-end process, and having a clear,
common context associated from an end-to-end perspective, which is not the case in IT today.
We should learn from those analogies that we shouldn’t try to implement ERP literally for IT,
because that would take the whole thing in one step, where as Richard just said very nicely, you
have to take it in digestible pieces, because we have to deal with a lot of technology there. You
can't take that in one shot.
Gardner: Okay, very good. I am afraid we will have to leave it there. I want to thank our co-
host, Georg Bock, the Director of the Customer Success Group at HP Software. Thank you so
much, Georg.

9. Bock: My pleasure. Thank you.
Gardner: And I'd also like to thank our supporter for this series, that is HP Software, and remind
our audience to carry on the dialogue through Discover Performance Group on LinkedIn. You
can also gain more insights and information on the best of IT Performance Management at
www.hp.com/go/discoverperformance.
And you can always access this and other episodes in our HP Discover Performance Podcast
Series on iTunes under BriefingsDirect.
And now, I'd like to thank our special guest, Richard Aarnink. He is the leader of the IT
Management Domain at Achmea in the Netherlands. Thank you so much, Richard. Very
insightful.
Aarnink: Thank you and you're very welcome.
Gardner: And lastly, a thank you to our audience for joining us for this special HP Discover
Performance Podcast discussion. I'm Dana Gardner, Principal Analyst at Interarbor Solutions,
your host for this ongoing series. We appreciate your attention and please come back next time.
Listen to the podcast. Find it on iTunes. Sponsor: HP
Transcript of a BriefingsDirect podcast on how Achmea Holdings has taken big strides to run
their IT department more like a business. Copyright Interarbor Solutions, LLC, 2005-2013. All
rights reserved.
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