The Efficient Frontier: AXA Financial Inc. - ' Page 2 '

Getting the Buy-In

In France, AXA Group has brand recognition similar to IBM Corp. or Citigroup. AXA Financial, however, is somewhat less well-known in the U.S. Coming in to work on Sixth Avenue in New York City, Bateman didn't have a clear sense of what the culture of the place would be like, or if his new colleagues would be receptive to the changes he'd been hired to execute. He's in charge of provisioning IT for several multibillion dollar companies at once, and while some of them didn't have to be convinced of the need for change, others, the cash cows, wondered why Bateman wanted to repair what wasn't broken. Right away, it became obvious that without then-chairman and CEO Ed Miller's buy-in, no one would have paid him any heed. "If I didn't have the CEO's endorsement, forget it," he says. "I wouldn't even have been able to compete with Sisyphus."

Fortunately, Bateman got the endorsement, and if Miller got the ball rolling, Christopher "Kip" Condron, who replaced Miller in May 2001, has been the one to take portfolio management to the next level. Condron formed, and chairs, a corporate oversight committee composed of executive vice presidents and C-level executives, and the committee uses UMT's software.

"IT portfolio management is not just another market category that vendors or analysts dreamed up to sell more software," says AMR's Austvold. "In fact, it is part software, part organizational discipline. It is an evolutionary improvement for all project management software, adding capabilities to judge an entire collection or portfolio of projects on their relative health, importance, return and risk."

Before any evolutionary leaps could be made at AXA, Bateman first gathered the best intelligence he could get from each of AXA's six U.S. business units. Bateman describes how the process used to work: "At first, the vice president of the field group would come in and ask for one thing, then the product guy would come in and demand another thing. So whoever had the most passion behind their pleas generally got the higher levels within the budget." Not only were executive vice presidents asking for different things, but IT essentially had no clue what the various business units were trying to achieve. For example, if a sales unit was moving toward a model requiring more customer self-service, could there be a cheaper, more efficient, off-the-shelf investment, as opposed to one developed internally? IT had never asked, and sales had never volunteered its business intentions.

So the first step of Bateman's approach to IT management was to take an inventory of each business unit's IT needs as they related to its individual business objectives. At the same time, Bateman asked Condron to clarify each division's strategic objectives. Then the corporate-level objectives had to be defined and identified in a empirical way—specific targets had to be set so that the goals could be plugged into AXA's new prioritization, valuation and optimization model for IT investments. Each executive vice president, and his or her respective group, was asked to determine the level of impact each project might have—extreme, strong, moderate or low. Would a proposed IT project, for example, have a strong or moderate impact on the overall goal of reducing costs 10 percent? Increasing sales by 20 percent? Improving customer satisfaction by 5 percent? Does upper management share all of those objectives? If not, does management value one project more than the others?