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Friends Provident:
A Balanced Scorecard for IT
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Performance
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This case was written by Soumitra Dutta and Luk Van Wassenhove, Professors of Technology
Management, and Jean-Franois Manzoni, Associate Professor of Accounting and Control at
INSEAD. It is intended to be used as a basis for class discussion rather than to illustrate either
effective of ineffective handling of an administrative situation.

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N.B. PLEASE NOTE THAT DETAILS OF ORDERING INSEAD CASES ARE FOUND ON THE BACK COVER. COPIES MAY NOT BE MADE
WITHOUT PERMISSION.

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Introduction

"If I look back on it, I can actually give you a glorious, logical, this is how it all
grew as we moved from phase to phase, but it would be wrong to infer that at the
beginning there was a grand design which we just let unfold. It wasnt like that at
all."

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Tony Griffiths, General Manager of IT and Strategic Planning at Friends Provident, a major
UK insurance company, was reflecting on the change programme that he had initiated in late
1994 within the IT department of Friends Provident. Tony Griffiths was no stranger to IT. He
programmed flight simulators in 1967 and had run the IT development department at Friends
Provident for 10 years before deciding to move on to something "different". Joining the sales
and marketing department, he moved up the ranks to become General Manager of Sales and
Marketing for Friends Provident. After a 10-year tenure in sales and marketing, Tony
Griffiths returned in 1992 as General Manager of the IT department. His first reaction upon
returning was, "IT hadnt really changed, while the world around IT had changed!"

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Tony Griffiths launched a change programme to improve the performance of the IT

department. Central to the change was a focus on measuring different facets of IT
performance and integrating these measures into Friends Providents management processes
in the form of a balanced scorecard. This focus paid rich dividends: it increased the level of
customer satisfaction with IT services, led IT staff to become customer focused and made
Friends Providents management more aware of the business value of IT. However, in late
1999, the time had come for a re-evaluation of the balanced scorecard and associated
measures. Several questions loomed large in Tony Griffithss mind:

The balanced scorecard had evolved naturally over the years to encompass a range of
measures, which had largely proven their utility. However, several questions about the
completeness and utility of some measures remained unanswered. Should the current
balanced scorecard be subjected to a thorough re-evaluation?

Tony Griffiths was firm in his belief that ISD had become a better managed
organization over the past years as a direct result of the change programme. However,
some elements of the data were not showing a nice "upward trend". What should be
done about that?

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Tony Griffiths had assumed responsibility for strategic planning at Friends Provident
in 1997. Consequently, much of his efforts over the past year had been devoted to his
new responsibilities. Was the change programme and the associated scorecard
sufficiently ingrained in the culture and processes of ISD for it to continue to flourish
without his direct involvement?

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Friends Provident

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Friends Provident was established in 1832 and is one of the United Kingdoms leading mutual
insurance and investment companies. The principal activities of the Friends Provident Group

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are the transaction of long-term insurance business (principally life assurance and pension
plans) and unit trust management.

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With over two million individual
policies and accounts, and subsidiaries and affiliates in 14
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countries, the Friends Provident
manages assets of around 28 billion worldwide.
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More information Ion Friends
r Provident and its latest balance sheet can be obtained on the
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company website:
www.friendsprovident.co.uk.
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ISD is the Information
Division of the Friends Provident Group of Companies. It
r allSystems
providesE
or supports
of Friends Provident's computer systems. Exhibit 1 provides some
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F of Friends Provident and ISD. The quality and effectiveness of ISD
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summary
statistics
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services
and
systems are benchmarked against IT organizations in other industries. ISD is
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data (from IBM) of ISD performance relative to other leading insurance companies in 1998.
An Eye-Opening Experience
Tony Griffiths recalled that the change efforts started with a conversation with managers from
the Customer Services Division, the largest (internal) customer of ISD:
"It really did start instantaneously. I do believe that the trigger was my 50th
birthday, and sitting there thinking 'what shall we do?' And I thought, 'let's get a
grip on this IT Shop and change it'. And then came the question of how do you
change it. And I thought, 'Let's find out what some of our customers think about
us and see if that will help me understand directions we should take.'
I went down and introduced the discussion by saying 'I think it would be a good
thing to make some changes in the IT Shop. I'd like to know what you like about
it, what you dont like about it, the way it works, and that will help me form my
ideas.' I was expecting to hear that lots of things were wonderful, but maybe just
bend it a bit here, bend it a bit there. And because these people are good friends,
that's not what they told me. They shot me right between the eyes! In the nicest
possible manner!"
Roger Wadey, a manager from the Customer Services Division, commented:
"We had 1000-odd people working in customer services, all actually using IT. I
think at the time there was a gradual perception that things weren't going right, but
nobody had any idea about understanding it, measuring it, it was just a perception
of another IT problem. It was gradually a ground swell coming along. There was
also no mechanism for providing the feedback.

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"The customer managers gave lots of examples which were really helpful, like
when people rang with a problem into the helpdesk. The problem would be
acknowledged and then they wouldn't hear anything else about it. They wouldn't
even hear that it had been fixed and they would go and see whether it had been
fixed yet by trying something out. Or they would ring up and say 'Have you fixed
it yet?' and get the response, 'Yes, we fixed that three days ago'."

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It was a "first" for ISD to actually "listen" to their customers, Tony Griffiths realized:

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"Wed discussed things with users, we worked well with users for designing and
building systems. We liaised well. We planned well with them, but did we ever
seek their feedback? No, I dont believe that we did. Not really. Not in a conscious
way, and not in a way which was directed at trying to do something about it."

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The Memo for the
Launch
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TonyP
GriffithsFrelated the customer feedback to his senior management team during a threet June 1995 and the group decided to launch a change programme to address the
day
retreat in
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problems
raised by their customers. The whole thrust initially focused on customers and on
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improving
customer satisfaction. The change effort was launched with a memo which, in
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retrospect, was both the worst and best thing to do. Tony Griffiths recalls:

"We wrote a memo which tried to say Dear IT Staff, this is what our users have
told us about the things that we do. We need to change. This sort of change cannot
be done by management dictating. It can only be done by people on the ground;
by everybody changing and being more alert to whats going on and to what users
want. So, we need your help."
What was heard by the recipients of that memo was "You people are useless! Its not
managements fault. Its your fault. Youd better do something about it or theres going to be
trouble around here!" And there was a riot. While the memo certainly captured everybodys
attention, the anger and frustration of their employees were palpable.
Tony Griffiths decided that the only way to defuse the situation was to go around and talk
personally to all 250 of his employees.
"I met them in groups of a dozen or so. I started off by saying The memo that was
sent out was written in good faith. But I now recognize that it was a crappy piece
of communication. And I recognize it as a crappy piece of communication
because the evidence is there in the way you reacted to what you saw in it."
It was probably the first time that a senior member of management had sat down with staff in
the IT Shop and said "Sorry, I got that wrong." While people were still angry, some of them
started to say, "Well, OK, so what do you want us to do about it?". It was decided to create
some performance improvement teams to think about possible actions.

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Creating a Customer Focus

ISD had traditionally measured quantitative factors such as productivity, number of bugs and
quality of software. Employees were used to being rewarded for getting these measures right.
It was decided that it was time to focus on customers and to do a customer satisfaction survey.
The first customer satisfaction survey was conducted on 6th March 1996 with a sample of
around 300 customers.

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The customer satisfaction survey revealed a number of concerns which needed to be

addressed. ISDs management team identified some common threads and started "crusades"
on trying to fix those issues. Six months later, the survey was repeated and customers were
asked to rate the results of the improvement actions. The customer satisfaction surveys helped
to get ISD into a sort of virtuous spiral, with customers feeling that it was worthwhile
complaining, and the people fixing the problems feeling it was worthwhile fixing them.

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One major consequence of the surveys was the replacement of the Help Desk function by a
new Service Center in May 1996. The Service Centers philosophy was to solve as many
problems as possible on first contact with the customer and to have efficient procedures for
handling those which required specialist expertise. The "old" Help Desk was a technical help
desk. The "new" Service Center hired people-oriented, customer-friendly staff who made
servicing customers their first priority. There was a big cultural change as ISD management
positioned the Service Center as the most important part of the ISD organization.

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The Account Managers

ISDs senior management soon started to recognize that doing customer satisfaction surveys
once every six months was not sufficiently dynamic. Not only wasnt it interactive enough, it
was not highlighting all the avenues for improvement.
So it was decided to create the role of Account Manager to give a much stronger customer
focus to the high-level contact between ISD and the other divisions of Friends Provident. The
Account Manager was a senior ISD manager who was the point of contact for all activities
which were not covered by the Service Center. The Account Managers would sit down once a
month with managers from their customer division and say "All things considered, how did
you rate the service in the past month?" Customer divisions were asked to rate ISDs
performance on one of four scales: Very satisfied, satisfied, dissatisfied and very dissatisfied.
And their responses were color-coded: green, yellow, orange and red respectively.
Account managers usually focused on soliciting responses from middle managers within the
customer divisions, as they were perceived to be more aware of operational performance and
challenges. The counterparts of the Account Managers in the customer divisions typically
maintained their own internal teams to collect feedback on IT issues and feed it through to
ISD via the Account Manager. This was perceived as a "burden" by some customer divisions,
who would have preferred ISD to collect the necessary data themselves or via automated
recording mechanisms. But on the whole, managers from customer divisions were happy with
the role played by Account Managers, as they felt that they could have a "business-tobusiness" conversation with them, leading to better dialogue and understanding.

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The Account Managers role was not a full-time job, but it helped senior ISD managers to
understand first-hand what customers were saying, to see problems from their customers
perspective and to create more ownership for the change programme. Some of the senior
managers did it well and quickly. Others had to be shown how, and needed encouragement to
get out to the customers and listen. They could make excuses not to, but the report back was
obligatory. They often came back saying, "Weve got to change this, weve got to change that"
because they didnt want to go back and have another difficult experience with their customer.
So ISD genuinely started to listen.

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Account managers were responsible for formulating service level agreements with their
customer divisions. However, defining the appropriate measures for the service level
agreements and agreeing on them was not an easy task. Roger Wadey explained:

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"Our service level agreement talks about our mainframe systems being available
for 99% of the time. But over the past 3-4 years weve moved more into PC
technology, and our service agreement does not reflect this change. Assume it
takes 20 minutes to reboot a PC and if this happens thrice a day, you have lost one
hour of productive time. The reality comes down to the actual service thats
delivered. There arent good measuring tools to allow us to measure the actual
performance we are getting with the PC. When the system is down or running
slow for some reason, we are not able to provide quality service to our customers.
How do you measure the impact of poor service?"

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The Dashboard
It was a few months after the first customer satisfaction survey that the first formal dashboard
was published, in July 1996 (see Exhibit 3). Visual communication and producing a visually
appealing one-page summary of key performance measures seemed a natural next step.
The big satisfaction index was placed at the top of the dashboard in the middle because its
regarded as the most important measure of how customers see ISD over the longer term. This
is the customers 12-monthly feedback of overall satisfaction, of how the IT Shop has
performed.
The idea of using a star to represent the monthly customer evaluations came from a compass.
Initially, ISD experimented with making the lengths of the rays of the star proportional to the
level of satisfaction. But the representation became too complicated and the idea was dropped.
Simple color coded rays seemed to be the best solution for representing the monthly customer
feedback.
The color codes represented the worst-case evaluation along the dimensions of the service
contract. For example, if the Finance Division had three important services that they rated as
"Green, green, orange" to the Account Manager, then what went on the star for the Finance
Division that month was orange. While representing the worst evaluations helped to focus
ISDs attention on what was going wrong, it was necessary to examine even good ratings
closely to ensure they represented reality. Tony Griffiths recounted an anecdote:

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"In a management meeting, an Account Manager beamed and said They wanted
to give us an orange, but I was able to negotiate with them into giving us a green.
That's fair, cause sometimes peoples' expectations need a bit of managing.' But
we pursued it and said 'Why did they want to give you an orange? What was
driving that?'. And he said 'Well, because they were really upset that the
acceptance test system had been taken off-line, but I explained to them that the
system wasn't part of the service contract.'

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"And it was lovely to be able to get hold of that and to turn it round
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you telling me that the acceptance test system really is quite important
to them?'.
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"Yes, I guess so."

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"Then dont you think we should make it part of the service contract? Cause if
these guys are sitting there seething, really cross about it, and were saying "hee
hee hee, gotcha - its not in the service Contract!" thats not about being customer
focused, putting yourself in his shoes and thinking from his perspective."

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While managers from customer divisions admitted that the dashboard and the associated
report were not disseminated widely enough in their divisions, they did feel that the report
was useful. Roger Wadey pointed out:

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"The big benefit is when there is a serious problem, when for example I do report
a red or orange, then I get a full report of each of the things that have caused that
particular problem: This is what happened; this is why; this is whats being done
to stop it happening again. Which we didnt get in the past. I get that on all major
incidents, which Im very happy with. It proves were addressing an issue, trying
to understand it, and to that extent weve a far better communication and
understanding."

Evolution of the Dashboard

The components of the dashboard evolved over the following months. (Exhibit 4 depicts a
copy of the dashboard from July 1998.) For example, Account Managers soon noticed that it
was difficult for customers to give a meaningful answer to the overall service provided by
ISD. Tony Griffiths explained:
"We started to see that our customers would say that delivery, response times etc,
that was terrific, but the way you delivered those PCs to my five new employees
was terrible. So how can I say Im satisfied, or dissatisfied? Youre asking me to
add apples and pears."
It was decided to separate out the service contract from all other services provided by ISD.
The new measure was called Solutions Delivery and represented everything that was not in
the service contract, such as customer satisfaction with the delivery of a new printer or with
the fixing of some system. Solutions was a useful measure for building good relationships
with customers, but was not seen as a mature and objective measure. There was ongoing
discussion within ISD about the need to further refine measures related to Services and
Solutions.

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Each month a report containing the dashboard was circulated to all employees within ISD.
Everyone could see the overall evaluations by customers. Of particular interest was the
commentary which went with the dashboard and explained the reasons for the exceptions, the
oranges and the reds. Each quarter ISD produced an analysis which measured its performance
against targets for the year, and also from with last year (see Exhibit 5). That whole set - one
page and a half - represented the total balanced scorecard for the performance of ISD. This
report was circulated to all ISD managers and also to Friends Providents general
management.

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As ISD focused in on the problem areas and fixed the oranges and reds, most of the
evaluations turned to green month after month. This raised the issue of whether the color
coding had served its purpose. Were they being reported as part of an ego trip and without a
function in the change and performance improvement programme? The process of obtaining
feedback from customers had changed and become an integral part of the management
processes of ISD. Was it possible to remove the measure from the dashboard? Or if it was
removed, would things drift back towards oranges and reds and the measure have to be reintroduced? This was an important question in the future evolution of the dashboard.

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The European Quality Model
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In an effort
to set best-in-class performance improvement targets, ISD decided in May 96 to
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assessment was conducted during a two-day workshop with about a dozen people from
different managerial levels and functional responsibilities across ISD and its customer
divisions. A facilitator was used to force the group to question their assessments and to
provide evidence in support of the proposed scores. These workshops provided a useful forum
for questioning existing practices and generating ideas for improving the performance of ISD.
Tony Griffiths elaborated:
"What is management here for? We spent a long time chewing that over, but it
was out of that discussion that we began to see that whilst wed done the
management processes1, theyd been done haphazard. Wed never given them the
same degree of attention as we had to building systems or worrying about e-mail
software. Once we saw it, and we started to see that if we did these things better,
then the whole of ISD would work better, then it gave us a reason to be there, and
we could answer the question of what value do we add."
By late 1998, ISD was obtaining scores of 430 (out of a total of 1000 possible points) in the
European Quality Model; a good progress from its initial score of 243, but still quite distant
from the scores of 700 to 750 typically achieved by winners of the European Quality Award.
The goal within ISD was to turn ISD into one of the best IT shops in Europe. The European
Quality Model stimulated ISD managers to start viewing their unit as a business and to
consider the use of a wider set of measures in particular measures related to staff
satisfaction and core process analysis. The European Quality Model score was represented on
the dashboard and served to outline additional areas for improvement.

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During the first assessment workshop using the European Quality Model, the facilitator
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a question which was fundamental to the Quality Model: "What were the
for
Okeypprocesses
ro were.
ISD?" Participants spent more than two hours arguing about what theIkey processes
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1 Aspects such as providing resources, developing staff, encouraging coaching, recognizing achievement,
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building relationships, managing resistance to change, listening, setting
objectives,
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Process Analysis

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Soon it became clear that there was not sufficient clarity and understanding about the core
processes of ISD.

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So a procedure was established
identifying at quite a detailed level within the ISD
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organization the individual processes,
ownership, their current status in terms of quality
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and the time of last
the key processes for ISD was not easy. At a certain
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level, ISD wasT
seen as having
three core processes: delivering services, delivering systems
and improving
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a ebusiness. There was significant intellectual debate whether other
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processes, such asrthe change management process, were key processes or not. Eventually, the
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effort resulted in
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skill sets and
outputs (see Exhibit 7 for details of these processes).
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o key ISD processes were not represented explicitly on the dashboard. The
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late
1998,
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Stuart Reed, a manager who led the process mapping efforts, explained why:
"Processes are not represented on the dashboard. The dashboard is, I suppose, if I
think about it in European Quality Model terms, about the results side. Without
fixing the enablers, you cant get good results."
Staff Satisfaction
The first staff satisfaction survey was conducted in 1996. The questionnaire was designed by
a team who, under the leadership of Stuart Reed, went out around ISD in a formal, structured
way and asked, "What matters to you about things that are going on at work? What are the
important things as far as youre concerned?" They had a huge list of 200-odd items which
they boiled down to about 20-odd items which had come up time and again. Then they
constructed a questionnaire, which was meant to say to staff: "Youve said these things are
important, now tell us how well theyre done in your bit of ISD."
The results of the staff survey were interesting for ISD management. They found some things
which they had not really noticed before, e.g. that 75% of ISD employees had been with
Friends Provident for more than 6 years. On the big bottom-line "Overall Satisfaction"
question, 84% of the respondents said that they were very satisfied or satisfied. It was a bit
disappointing to note that only 135 employees (out of a total of around 240) took the time to
reply to the questionnaire. Later anonymous probes into the reasons for the moderate response
rate received two major messages: "I dont believe it is anonymous. If Im critical, Ill get it in
the neck!" and "I dont believe itll make any difference anyway. This is just more
management propaganda". Tony Griffiths commented:

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"I thought there was nothing I could do to fix those attitudes, other than prove by
responding to the survey, doing something about it, that it does matter."

The results of the survey were instrumental in helping to identify important areas for
improvement for ISD management, especially with regard to the transparency of certain
management processes. Tony Griffiths gave an example:

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"We got a large raspberry for terms and conditions! The immediate reaction was
Oh Christ! We'd better pay them more.' Happily, that's not what we did. I think
what we really did was we took all the wraps off the pay determination process;
we made it very visible, and we let everybody join in. Previously it had been
behind closed doors. We took the wraps off and put the process out into the
public. It stopped some of them complaining that their salary was inadequate.
They feared it was inadequate. They didn't know it was inadequate. But once we
showed them with comparative industry data that actually it was OK, that started
to disappear as an issue. So you don't have to solve the awkward problems with
expensive, obvious answers, it's really about treating people properly."

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The staff satisfaction surveys were repeated in 1997 and 1998, but progress in overall staff
satisfaction ratings was not evident. The response rate in 1998 was still 75% (252 responses
out of a total of 334 questionnaires) and the overall satisfaction ratings (of people who were
either satisfied or very satisfied) had decreased to 79% (the figure for the 1997 survey was
around 81%). Tony Griffiths perceived this to be a problem of changing expectations:

"Everybody in ISD will tell you that things have got better because of things that
we've done to address particular problems, and the score hasn't shifted one jot. I
think that's about expectations. I think that as we've started to crusade on these
things and talk about them, and talk about the importance of staff satisfaction,
peoples' expectations of what was necessary to be satisfied have increased."
A concrete response to the staff satisfaction survey results was a decision by ISD management
to submit itself for an external assessment of people management processes as part of the
Investors in People accreditation, a nationwide (UK) award. Tony Griffiths added:
"We didn't do it in order to win the award. The value of the exercise was going
through it. We were having our eyes opened to things we thought we were doing
well and also to which we're not doing so well."
ISD management could take some satisfaction from being awarded the Investors in People
(IIP) Accreditation in 1998.

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Issues

ISD's change programme had progressed a long way since its start in 1994. Though at the
start ISD managers and employees had felt some reservations about taking time out for
performance improvement activities, such as process analysis, in the face of tight deadlines,
these programmes had increasingly come to be recognized as necessary and routine parts of
day-to-day activities.

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While the number and sophistication of several measures had increased over the years, some
data still proved elusive. A good example was supplier satisfaction, an important component
of the European Quality Model. Tony Griffiths realized:

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"There was little trust with suppliers. We went out with a questionnaire
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and we asked our suppliers about how satisfied they were withotheir relationship
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with Friends Provident. I suppose the response was predictable, because if IBM
thinks we are really horrible to work with, theyre not going to tell us so! They
would have to be really confident that we would take this honestly. I dont know at
the moment how to get quality data in there, how to convince them that its safe."

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There were also some "unusual" trends in some measures. One such example was "problems
per user". It was noticed early on that people would say they didnt bother reporting things to
the helpdesk, because they knew nobody would do anything about it. Once ISD refocused
their customer service, word slowly got around and more people began to report problems.
Consequently "problems per user" went up! There was some debate about whether it was
necessary to construct complementary and/or substitute measures to better understand the
underlying phenomenon.

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and measures on the dashboard. For example, a major thrust of Friends Providents strategy
was to increase its presence in the corporate pensions sector. While the IT system for pensions
administration was being tracked like other IT projects in terms of dates, costs, etc., measures
related to new business generated in corporate pensions was not reflected on the dashboard.
Tony Griffiths was not convinced of the value of introducing such measures into the
dashboard:
"The dashboard is not everything and we use a variety of other measures to track
IT performance in more detail. But more business delivered on the back of an IT
system is a very peculiar measure - I would want some convincing that it was a
useful measure of whether or not the IT Shop was effective. There are too many
other powerful business levers such as commissions affecting new business in
pensions."
Roger Wadey gave the view of his division on ISD's performance since the start of the change
programme:
"What I'm going to say is that the Customer Services Division (CSD) now feels
that ISD takes problems and issues more seriously than they did. In terms of the
actual service being delivered, then I think there are all sorts of issues there which
I think relate to none of us, and I think that's true of ISD as well as CSD. None of
us really appreciate the complexity of the overall system, or expect too much from
PC technology in relation to reliability and service to some extent."

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There were no links between the dashboard measures and performance reviews. ISD
management realized that this was an issue which needed to be addressed in the future.
However, there were some risks to be managed. Tony Griffiths explained:

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"At the moment I believe that reports that we get as a management team is a good
representation of reality. There's honesty, I believe, in there, about oranges and
reds, because people have learned that when they report that something's been
going wrong, it's a matter of interest of how can we help fix it. It's not a matter of
pointing fingers and firing people. Now, I would worry that if you started making
it an important and obvious determining factor in their pay, there would be a
motivation to maybe be less honest, to show the greens and yellows."

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There had been relatively little effort thus far in observing and analyzing trends. Tony
Griffiths noted:

ti
c
"We dont have aN
formal u
process for seeing whether the same thing keeps on
d
popping up over and over
again. We do sometimes sit up and say Hey guys, last
Oan orange
o for networks from these people. The month before it was
month we got
I
r
networksT
for thoseppeople. Networks featured two months before that. Shall we
have C
a review R
ofewhats going on in the networks world? Are there any common
factors amongst
the different services that seem to be giving us trouble? But its
r
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o
ad hoc and informal, and probably could be improved."
F
P
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AS
database
tool was being implemented to log problems and analyze them. The overall aim
o
toN
be able to observe trends and eventually to foresee problems before things actually
INwas
started to go wrong.
Also important was the fact that several different performance improvement programmes
were being run simultaneously. Stuart Reed gave his view on the different programmes:
"I think they overlap and underlap. My personal view is that you feel your way as
you go. For example, while running customer and staff surveys we discovered it
was good to have them close together, and also close to the EQM assessment,
because similar messages come out. So the actions you develop can come from all
of those strands. If you try and over-co-ordinate these things, you end up with a
big programme which is difficult to manage. I think our way was to say We want
to try something. Well put it in and learn from that, and then move on."
Tony Griffiths felt that a sense of ownership of problems across the members of his senior
management team obviated the need for a formal systemization of the change programme
initiatives:
"I think weve positively resisted trying to systemize all these things and bring
them together into some grand schema. I feel OK about that because of the nature
of the senior management team and the way it meets and discusses things.
Everything is up for grabs, and everybody owns everybody elses problems. I
dont know quite how weve created it, but now I think about it, all of the
managers are capable of talking about anything thats going on anywhere inside
ISD. They share the problems. And the sorts of discussions that we have around
the managers table are people being critical of each others areas performance
and people being helpful Have you thought about trying this? I dont think we
need a system."

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8th Largest insurer for Life

Pensions, Unit Trusts and
PEPs
based on New Business (1Q99)

Mainframes
(OS/390)

Dorking
Exeter

DASD

3.6 Tbytes

Midrange

FP TECHNOLOGY

FP GROUP

545 MIPS
62 MIPS

Applications

Services

4970

AS400
Sequent Unix

2 Units
2 Units

Corporate Center

759

RS6000

25 Units

Investment Management
(Friends Ivory & Sime)
Total

307
6036

Serveurs

Annual Premium Income

New Business Premium

1,937m
1,532m

Desktops
Windows 95/NT

New Business Policies

Market Share

226,000
3.1%

IBM/Compaq

Claims Paid
Annual Expenses
Funds Under Management

1,543m
283m
31.8bn

PY
COtion
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TI epr
EC or R
SP ot F

IN

FT People
Retail Operations

Customers 2.6 m
InForce Policies 2.4 m

Copyright 2000, INSEAD, Fontainebleau, France.

IBM/Compaq

41000 Units

934 Units

Dumb Terminals

350 Units

People

27.1m

Technology
Capital Depn

14.8m
10.7m

Total

52.6m

IT STATISTICS

101
17,500
8.5m

Systems
Modules
Lines of Code

Help Desk Calls

Transactions

650/day
1.1m/day

Email

32,000/day

Robot Transactions

1,200/day

Telephone

Inbound Calls
Outbound calls

180,000/week
140,000/week

IT People

Development
Service Center
Computer Services
Business Process
Improvement
Scanning, Printing,
Records
Total

191
93
137
40

European Quality

Model Score

474/1000

Customer Satisfaction

1996
1997
1998
1999

66%
74%
79%
84%

170 Units

Laptops
Windows NT

Annual Budget

PY
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SP ot F

IN

Exhibit 1

66
527

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percentile

IN

Exhibit 2
Friends Provident Performance and Practices

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Insurance high

100

Insurance avg.
Friends Prov.

80

Insurance Low.

60

PY
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TI epr
EC or R
SP ot F

IN

40

20

PERFORMANCE
QUALITY
CULTURE
TECHNOLOGY
MEASUREMENTS PLANNING/ESTIMATING
DELIVERY
PRACTICES
METHODS
ORGANIZATION/SKILLS CUSTOMER FOCUS

Copyright 2000, INSEAD, Fontainebleau, France.

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Exhibit 3
ISD Key Performance Indicators July '96

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Source: Friends Provident

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Exhibit 4
ISD Key Performance Indicators July 98

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Source: Friends Provident

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Actual for
1997

Target for
1998

Actual
IQ98

Actual
2Q98

74%

80%

Number
Number
%

4
0
100%

0
0
100%

0
0
100%

0
0
100%

100%

100%

100%

100%

Average 94%
Minimum 71%

>=93%
all year

95%

93%

Average 92%
Minimum 86%

>=90%
all year

90%

91%

0
0

0
2
87%

1
3
66%

100%

100%

Variance
Analysis

Satisfaction with speed of

problem resolution

IN

delivery

PY
COtion
N uc
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TI epr
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Solutions
satisfaction :

- very dissatisfied
- number of fault recurrences
- very dissatisfied & dissatisfieds
improved in next reporting period
- action reports for very
dissatisfied or dissatisfied
customer

Number
Number
%

1
)
)
) not
) measured in )97
)
)
)

100%

100%

Due to problems on
MIT, AUDDIS and NT
pilot

DEV statistics

- target Return on Investment

- implementations to be zerodefect

IBM software development

rating

Ranking

) not measured
) in 97
)
)
40th out of 489

>=15%

28% (1)

25% (3)

>=80%

82% (2)

84% (4)

Top 10%

(Apr28%, May 26%,

Jun 25%)
Figures since June
recalculated on new
charging rates

Note: LeNote: Levels of satisfaction measured as ratings of very satisfied + satisfied

Copyright 2000, INSEAD, Fontainebleau, France.

Description

Determined by annual satisfaction questionnaire to

all customers. Actual for 1996 was 66%.
Indicates how well we are doing against the agreed
service contracts with each Division. The contracts
are built around what is important to that Division
(e.g. WFI for CSD and Quotations for SAM) as well
as availability and response times. They are each
scored by the users at the end of the month and a
"satisfaction" measure derived.

Customer Satisfaction
Service contract quality:
- very dissatisfied
- number of fault recurrences
- very dissatisfied & dissatisfieds
improved in next reporting period
- action reports for very
dissatisfied or dissatisfied
customers
Satisfaction with problem
resolution service

PY
COtion
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Unit of
Measu
re

Performance Measures

IN

Exhibit 5
ISD Key Performance Indicators for 1998
Update at 30.06.1998

Measured by asking our customers, for a proportion

of the problems solved, whether it was done
satisfactorily.
Measured by asking our customers, for a proportion
of the problems solved, whether it was done
satisfactorily.
Measures satisfaction of the Divisions with the new
solutions delivered to them, including DEV projects,
SDRs, technical implementations & end user
computing. They are each scored by the users at the
end of the month and a "satisfaction" measure
derived.

Measure DEV effectiveness. ROI compares user

projected benefits with total development cost. Zero
defects measured by counting the number of APRs
raised in the first three months following a project
implementation.
53rd out of 408 in 1996

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1997

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Points

BQF

Variance
Analysis

Description

AS400 has improved from upper

To upper . PW say our UNIX
rating is in line with others, but our
aim is to raise it.

Measurement of effectiveness of security

controls against an external benchmark.
Target reduced from 9 recognition of
increased exposure due to Internet
activity. Last reported rating was 8.85/10
for 1996.

UNIX
Upper
Internet
?

To be agreed.

6.5%

70%

59%

404/1000

500/1000

430/1000

PY
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%

Quarterly chargeback of all ISD

services

Actual
2Q98

n/a

T.B.A.
%

Actual
IQ98

Overall : 9
MF upper
AS400 upper
UNIX upper

Satisfaction with
new technology
Staff satisfaction

Target for
1998

n/a

100%
complete at
year end

Notes:

1.
2.
3.
4.

12 months to end of March

September to November 1997
12 months to end June
September to February 1998

Note: Levels of satisfaction measured as ratings of very satisfied + satisfied

Copyright 2000, INSEAD, Fontainebleau, France.

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Security rating

Unit of
Measure
Score

Performance Measures

IN

Exhibit 5 continued
ISD Key Performance Indicators for 1998
Update at 30.06.1998

Determined by annual satisfaction

questionnaire to all staff. Measures the
percentage of all permanent staff who are
satisfied or very satisfied. Actual for
1996 was 61%.
Self-assessment against model. Actual
for 1996 was 243/1000.

FI&S complete, RI negotiated.

Pilot in progress, agreement and
tunings in progress.

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Exhibit 6
The European Quality Model

People
Satisfaction

Policy &
Strategy

Customer
Management
Processes

Leadership

Customer
Satisfaction

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PY
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People
Management

Resource
Management

Enabler

Copyright 2000, INSEAD, Fontainebleau, France.

Impact on
Organization

Result

Business
Results

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STRATEGY
Description :

IO pro

T
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Production of the long-term

strategy for systems at FP,
production of architectures and
migration plans, forward capacity
planning.

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S Not

IN

REQUIREMENTS AND
PLANNING
Description :
The identification and
prioritisation of business
requirements needing new I.T.
solutions. A first assessment of
requirements in order to identify
appropriate resource needs.
Planning, from the resource pool,
of work for "Application Build",
"Infrastructure Build", and the
R+D activities of "Strategy",
needed to support those business
requirements.
APPLICATION BUILD
Description :

Production of application
solutions to meet business
requirements, making best use of
the toolset available.
Development, package evaluation
and implementation, feasibility
studies.

Exhibit 7

Skills/Focus :
-

Outputs :
The "Toolset" for
Deliver Solutions
(architectures,
migration plans,
strategy statements)
Feedback to the
office on IT Strategies

Understanding of business
strategies
Broad-based thinking / "Try
and see" attitude
Understanding of
technology, and matching to
business strategy
Innovation in the toolset
Forward thinking (2 to 5
years?)

Skills/Focus :
-

Outputs :

Business focus and

Plans
awareness
Identification of the most
appropriate approach ("the
best for FP")
Effective communication and
liaison
Resource planning

Skills/Focus :

Outputs :

Y
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Innovative use to the toolset

provided by "Strategy"
Focus on implementation to
time and budget
Project management skills
Teamworking, interpersonal
skills

I.T. solutions for the

business

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Exhibit 7 Continued

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INFRASTRUCTURE BUILD
Description :

O pro
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C
E

Re

Creation and enhancement of the

I.T. infrastructure according to
the direction provided by
"Strategy", with the timing of
implementation appropriate to
support application builds.
TRAIN
Description :

P
S

IN

ot

r
o
F

Skills/ Focus :
-

Outputs :
Implemented
infrastructure

Technical skills
Ability to acquire new
technical skills quickly
Focus on implementation to
time and budget
Project management skills

Skills/Focus :

Outputs :

Creation of training solutions for

- Ability to understand the
generic software (e.g. AmiPro,
usage of a new product
HPS). Driven by the introduction
- Identification of available
of new generic software or by
training solutions
recognition in "service center" of
- Ability to produce relevant
a training need.
material for in-house training
SERVICE CENTER
Skills/Focus :
Description :

Training solutions

Customer support for the current

I.T. systems. Installation of new
equipment, including in support
of systems developments (e.g.
rollout of PCs). Support for
appropriate usage of end tools
and the provision of end user
data.
Telephonists.
OPERATE
Description:

Satisfied service
requests

Operate of all current FP

computer systems. Growth of the
current environment within
certain constraints (e.g. new disk
packs). Technical support to
"Application Build" for current
environment components.

- "Help the customer"

- Problem solving skills
- Fast response and follow up
- Broad technical skills

Outputs :

Y
P

Skills/Focus :
-

Technical and operational

skills
Responsiveness ("Keeping
the show on the road")
Ability to effectively monitor
the environment

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