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(originally published by Booz & Company)


IT Road Maps for IT Transformation

A conversation with Aetna Executive Vice President Meg McCarthy.

No one disputes the importance of aligning the strategic goals of a business with those of its information technology organization. Yet putting in place the proper planning processes to achieve an integrated IT strategy has never been easy. For almost eight years, Aetna Inc., the US$34.7 billion health insurance giant, has approached the problem through the use of IT road maps — chronological plans designed to blaze a clear path for IT investments and to ensure that the company gains the set of capabilities, expressed in the form of a “blueprint,” that it needs to support its many business units in a fast-changing health insurance environment.

During this period, the effort has been led from the IT planning side by Meg McCarthy, Aetna’s longtime CIO, who was recently promoted to executive vice president of innovation, technology, and service operations. She sat down with strategy+business to discuss how IT road maps have facilitated Aetna’s capital investment and IT strategy, and the lessons the company has learned in the process.

S+B: Why did Aetna decide to approach IT transformation through an investment road-mapping process?
McCARTHY: From the day he came to Aetna, Ron Williams, our former chairman and CEO, articulated to the business leaders that IT planning is not something that the IT people go off and do. It’s something that every business leader needs to be very involved in. He wanted them to understand the technology environment that was going to support the growth of their businesses.

Ron was very focused on ensuring an appropriate integration between our strategic planning process and our IT planning process. And as the company was coming out of a turnaround, he recognized that we were going to need to overhaul the architecture of the company. In looking at that effort as well as a lot of other work that we had ahead of us in coordinating with our business partners, the entire senior team recognized that we needed a blueprint and an IT road map. The blueprinting or capabilities process is an integral part of our overall strategic planning process.

S+B: What was the IT investment approach like before the IT road map process was put in place?
McCARTHY: There was no sophistication around the prioritization process at Aetna in terms of what technology the businesses needed to implement and what the return on investment would be. Putting together the blueprint for each business domain allowed us to align investments with the strategic plans of those businesses.

Ron was a firm believer in the idea that you can’t know where you’re going unless you’ve got it clearly laid out in a strategic plan underpinned by a technology road map. So having blueprints for 80 percent of the domains in the company allows us to really look ahead and understand what capabilities, both technical and functional, we need in order for the business to be able to achieve its strategic plan. Without that, you really don’t know where you’re going.

The IT blueprinting process has become such an integral part of strategic planning that projects will not be prioritized unless they are part of a blueprint. The blueprints are all reviewed by our investment committee, so we have visibility into what those priorities are going to be, and which ones will get the investment dollars each year.

S+B: How do you set those priorities? I imagine that’s a hotly debated topic.
McCARTHY: It’s always a challenge. Every year, as we come out of the strategic planning process, there are always twice as many investments that the businesses want to make as there are dollars to be invested. So we have to be pretty rigorous as to the return on investment that we expect.

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