From: Mark Kovarski <kovarski@zooid.guild.org>
Subject: A look at 1992....
Organization: The Zoo of Ids
Date: Wed, 16 Dec 1992 22:05:20 GMT


Journal:   Corporate Computing  Nov 1992 v1 n5 p168(5)
------------------------------------------------------------------------

Talk about  disasters: Hurricane Hugo rips  South Carolina. Windstorms
tear through  Europe. And then  Hurricane Andrew razes  south Florida,
racking up a record $15 billion in destruction.

Over the past  three years Cigna, the third  largest insurance carrier
in the  United States, has shelled  out $160 million for  Hugo and San
Francisco's  1989 earthquake  combined, and  $39 million  for the  Los
Angeles riots. And it now says the 1,300 claims arising from Hurricane
Andrew will cut its third-quarter profits for the year by $50 million.

But  if you  think that's  a disaster,   take a  look at  the flow  of
information within Cigna itself three years ago.

In  one department,  two related  groups communicated  with each other
only through  written memos even  though they sat  50 yards apart.  In
another,  underwriters assessing  the  risk  of insuring  a customer's
overseas subsidiary  never looked at available  information to see how
those  subsidiaries  performed.  And  a  small  systems  support  unit
understood its role as providing applications, rather than helping the
bottom  line by  flagging  fraudulent  claims and  eliminating archaic
underwriting procedures.

By all the signs that count, Cigna  was a business in trouble. In 1987
the  company's income  declined nearly  11 percent  from the  previous
year, and would decline a further  36 percent in 1988. Even today, its
Property and Casualty (PNC) division hasn't made money in three years.
Cigna's stock sells at only 30 percent of its underlying assets.

Cigna's CEO  Wilson H. Taylor  decided in 1988  that something had  to
give. Cigna had to change from  the inside out, from a lumbering giant
to a responsive, data-driven business. It needed to reshape itself, he
decided, into a business with the tools to improve its customer focus,
provide  better  products  at  competitive  prices,  and  improve  its
financial results.

To  make that  change happen,   Taylor chose  Cigna's CIO,  J. Raymond
Caron.  His  charge:  Find  whatever  was  hurting  Cigna's ability to
function competitively, and fix it.

Caron now shepherds Cigna's reengineering  program. The breadth of his
purview is extraordinary. Caron's department looks at technology, yes,
but also at dysfunctional organizational structures. One reengineering
team, for example,  took a look at the  two related departments locked
in memo hell. The solution? Talk to each other.

But much of what has changed at Cigna does involve technology. Through
Caron's leadership,  Cigna is moving  from 3270 terminal  emulation to
client-server systems  accessing gigabytes of  information across wide
areas.  Even  more  striking,  Cigna  has  crafted a fully distributed
system  using OS/2  servers, mainframe  database servers,  and on-line
transaction processing applications written in  C++. It even created a
computerized  model to  help one  division's risk  assessors determine
premium  pricing,  slashing  $25  million  in  operating  costs  while
creating products Cigna can sell to customers.

Drastic action.

Since  Caron  inaugurated  his  efforts,  jobs  at  Cigna haven't just
changed, they've been revolutionized. A former training officer now is
hard at  work on a  strategy to  help  her division earn  a 15 percent
return  on  investment.  A  middle  manager  has  decided to scrap the
planned  automation  of  a  business  group  and  eliminate  the group
instead, melding its functions into a unit that's already automated.

And Cigna  is cutting costs. In  1987, before the company  started its
reengineering program,  expenses in Cigna's PNC  claims operation were
more  than 5  percent higher  than the  industry average.  Today, says
Paula  Federman, a  director of  Standard &  Poor's, They are actually
below the industry  average, and we expect that  will continue because
Cigna is continuing to cut costs.

Early in  1989 Caron presented his  recommendations to Taylor: Flatten
Cigna's  multilayer  bureaucracy,   give  individual  workers  greater
authority, and  provide them with the  tools they need in  the form of
useful  technology. Noting  that what  Caron was  proposing was  not a
relatively simple  techno-fix, Taylor gave  Caron the go-ahead  to try
out his  ideas. I believe that  technology plays a key  but supporting
role in  each of our  business priorities, explains  Taylor. Ray Caron
understands  that  even  the  most  advanced  technology can't improve
performance  if  there  are   fundamental  problems  in  our  business
functions.

But  in his  search for  those problems,  Caron can't  tell a division
president to just sit still while  he finds one and fixes it. Instead,
he has to cajole and convince division heads to let his team in.

Proper presentation is  the key. We look for  enough low-hanging fruit
to pay for  the (total program), says George  A. Bennett, president of
the  Lexington, Massachusetts  consulting firm  Symmetrix, which Caron
chose to help implement his  reengineering project. That way, it won't
be perceived as the same old exercise.

Nine times  out of ten,  the easy harvest  is reduced costs.  And more
often  than not,  the exercise   cuts those  costs by  tackling larger
issues.  Take  the  systems  support  unit  that services PNC's claims
department.  Before reengineering,  the organizational  chart for  the
unit  was rigidly  divided into  five functional  groups. Whenever  an
internal  customer requested  a new  application, the  code had  to be
massaged  by at  least one  person in  each functional  group. It took
months to years to develop  applications, says Sharon Helldorfer, vice
president of the support unit.

After reengineering, Helldorfer's systems staff lost two top layers of
management, shrank by 35 percent,  and was reorganized into teams that
support PNC's  various functions. And  the way they  do their work  is
different. I've gone from doing what  I was asked, to determining what
I need  to  do,  says  Helldorfer.  The  key  was transforming a rigid
hierarchy into flexible, cross-trained teams.

Pamela Rose,  for example, used  to work in  the research and  testing
department.  If users  had a   problem, Rose  would prepare  a problem
report  and  mail  it  to  the  change-control department. That report
eventually would reach a programmer who,  after a few weeks or months,
would devise a fix. The proposed fix would be tested, then returned to
the  production  department  to  implement  with  the  next  scheduled
maintenance releases.  It could take  months and months,  depending on
how complicated the fix was, Rose says.

Those steps have  now been eliminated. Rose heads one  of ten teams of
systems  professionals  who  work   directly  with  claims  department
managers. There  is no change-control office  to coordinate things, no
scheduled maintenance  release. Users ask for  changes, and Rose asks,
Is it worthwhile from a business  perspective to fix it?' I never used
to be in the mode of asking a question like that.

Neither  was Linda  Klimek. The  one-time art  major was  once in  the
training  unit,  but  now  she's  a  systems  designer on Rose's team,
learning  to program  in COBOL.  At a  recent meeting,  a team  member
suggested  a  project  that  could  save  $8  million  throughout  the
4,000-person claims department.  That will hit the list  faster than a
nice-to-have item, she says. We do our share of the nice-to-haves, but
we now  have a vision  of what to  get done to  achieve our 15 percent
return on investment.

Many  other  changes  have  swept  the  department as well. Helldorfer
discovered that, although Cigna's database contained ample information
about double  billing and other  types of fraud,  no one regarded  the
information  as a  systems issue.  We had  the data,  but we didn't do
anything  with it,  she says.   Now a  simple cross-check  of provider
identification numbers  saves $11 million  a year. No  new technology,
just new ways of working.

Reengineering is not downsizing; it  is not tweaking, Helldorfer says.
It's a different focus on business. You must change the culture.

To that  end, Caron has  formed a ten-person  Reengineering Conference
that trains work teams in the  new way of operating. Loretta Raider, a
human  resources director  for Caron,  recently completed  a ten-month
stint as a trainer with the conference. Now she is back at her regular
job  but infected  with the   tenets of  visionary thinking.  Her unit
hasn't  yet been  reengineered, but  she suspects  that will  come. It
affects  everything:  how  we  train  people,  the  different  role of
leadership, compensation, rewards, the team approach, she says. It's a
whole  shift   in  a  lot   of  human  resources   practices,  a  more
participatory approach.

Although reengineering is  under way in each of  Cigna's 13 divisions,
none of  the large ones  has yet been  overhauled from top  to bottom.
It's not  an easy task to  go after an entire  division at once, Caron
confesses. In fact, I'm not sure it can be done.

For one thing, division presidents head operations the size of midsize
companies, and many are loathe to let  anyone in who could muck up the
system. For another,  the job cuts that have  accompanied nearly every
reengineering  project   at  Cigna  have  sown   the  seeds  of  fear.
Reengineering  often  gets  linked  with  job-cutting,  although  that
certainly  isn't the  intention, Caron  says. I  think whenever anyone
hears  that we're  going to  do reengineering,  the first reaction is,
What is this going to mean to me?'

That reaction is  understandable. But Cigna has found  its efforts are
paying  off. In  his own  IS division,  through reengineering  and job
elimination,  Caron  has  reduced  his  annual  budget by $30 million.
Cigna's  reengineered groups  are also  more responsive.  One division
proudly  exhibits  a  95  percent  improvement  in  the time needed to
process a customer's application. For his reengineering efforts, Caron
recently received  the prestigious Partners  in Leadership Award  from
the Society for Information Management.

But Caron cautions that companies  need to approach reengineering with
the proper  attitude. It's not like  it has a beginning  and an end. I
think   [reengineering]  is   something  that   must  be  continuously
available.

Desktop Mainframe Access

A New Window on Client Data

Picture a  division so big,  so sprawling, so  dependent on mainframes
that it rivals many large  companies. Now label that division Employee
Benefits.

This was  a traditional large  corporation with 30  claims offices and
7,000  people, all  of us  steeped in  Management by  Objectives, says
Melvin E.  Ollestad, senior vice  president of claims  administration.
Unfortunately,  many  of  the  7,000  people  shared  a  dysfunctional
corporate culture. One office, for  example, had teams of underwriters
and  their  assistants  who,  although  separated  by  only  50 yards,
communicated with each other only  by memo. Nobody liked communicating
this  way but  they told  Cigna's reengineering  team, that's  the way
we've always done it.

Says Ollestad, Trying to change that culture gets to be pretty tricky.

To   complicate  matters,   Ollestad  managed   a  highly   stratified
organization.  Writing a  customized health  care package  for a Cigna
client could involve  up to 161 separate paper  forms circulated to 47
departments for review and processing. We wanted to get rid of some of
those hand-offs that we had built in, says Ollestad.

Caron called in Symmetrix to examine the division. They didn't spend a
lot of time studying our division--just a quick fly-by through several
of  our  claims  offices,  says  Ollestad.  That  was enough to expose
Employee  Benefits  as  a  monolithic  bureaucracy  that  responded to
customers with glacial speed.

For  the  systems  component  of  the  reengineering  effort, Employee
Benefits has begun a migration  toward client-server and away from the
3270  terminals slaved  to IBM  mainframes at  Cigna's data  center in
Windsor, Connecticut. The  shift is a slow one.  After 18 months, only
about one-third of all the  division's employees have IBM PS/2 systems
running Windows.  But regardless of  whether they are  using networked
PCs or  3270 terminals, Cigna's workers  now have access to  all eight
DB2  databases operating  out of  its Windsor  data center,  including
providers, claims histories, eligibility,  and client information. The
databases  contain information  on nearly  30 million  individuals and
track more than 60 million medical claims annually.

But technology  at Cigna is only  part of the equation.  Employees now
work in teams, each serving a particular client company's total needs,
from  opening the  mail to  auditing the  finished claim.  The goal of
turning  around claims  within ten  business days  is accomplished  95
percent of  the time now, versus  85 percent before. Errors  have been
reduced from 7 percent of claims handled to 2 percent.

We've found customers are a lot happier  with us than they used to be,
says  Ollestad. Staff  has been  reduced by  900 to  a total  of 6,100
workers,  and Ollestad  is halfway   to meeting  his goal  of reducing
expenses by $25 million a year. That's about a 30 percent improvement,
he says.

OLTP on OS/2

Distributing the Risk

For Ray  Caron's first trick  of prestidigitation--changing a  bloated
bureaucracy  with two  grossly  incompatible  database systems  into a
lean, responsive machine--he set his sights on Cigna Reinsurance. Part
of what  Cigna's CIO did  was actually a  card trick: He  made tens of
thousands  of index  cards disappear,  and he  did it  by pushing  the
bounds of available technology.

Situated  in Bloomfield,  Connecticut, Cigna  Re (as  it's called)  is
Cigna's smallest  division, responsible for assuming  part of the risk
held by other insurance carriers. It  works like this: After writing a
$10  million life  insurance policy,  an insurance  company might sell
four-fifths of that policy to Cigna  or other carriers. In turn, Cigna
could buy the remaining $8 million  and cede $6 million to yet another
carrier, keeping  a fifth of  the original risk  and potential profit.
Cigna  Re's  organization  reflected  this  dual  function, with staff
reporting to either the Assumed or the Ceded group.

But Assumed  and Ceded didn't, in  fact couldn't, talk to  each other.
The  Assumed business  was fully  automated, with  dumb IBM  terminals
slaved to a mainframe at one  of Cigna's three huge data centers, this
one  in  Windsor,  Connecticut.  The  Ceded  side  mirrored  Assumed's
organization,  except  that  Ceded  maintained  its data--identical in
nearly every respect to Assumed's--on 27,000 index cards. There was no
link between those two pieces, says Gary M. Wolters, an assistant vice
president of the division.

Cigna  Re knew  it had  a  problem.  The business  of individual  life
reinsurance was  consuming about half to  two-thirds of our [financial
and staff] resources, yet it was a product line we wanted to downplay,
says Wolters. Margins were razor thin, and Cigna Re wanted to focus on
the  more  lucrative  group  and  special-risk  products.  So  at  the
invitation  of Cigna  Re  president  Francine Newman,  Caron unleashed
Symmetrix to analyze  Cigna Re's operation and suggest  the areas most
likely to yield big results.

The  division didn't  know what  it was  getting into.  We thought  of
reengineering as a systems development  project, says Wolters. What it
evolved  into was  a complete  review of  our division's  strategy and
workflow. It ended up encompassing all product lines.

After a quick look at Cigna Re, the reengineering team junked the idea
of building a  new system for the Ceded group.  In fact, it decided to
ditch  the  Ceded  unit  altogether  and  add  that  data to Assumed's
database.

That's exactly what  Cigna Re did, as well  as collapse its hodgepodge
of  17  independent  information  systems  handling  all of Cigna Re's
functions, from  human resources to  accounting, into 5.  The two-year
project consumed the efforts  of 15 information systems professionals.
To meld a unified whole, the team ported all data to a DB2 database on
an  IBM mainframe  in Windsor.  At the  same time,  the team  set up a
distributed  architecture  using--incredibly--a  beta  version of OS/2
running a CICS application written in C++.

The  mainframe functions  as a  database server,  the OS/2-based  CICS
servers handle  on-line transaction processing, and  PS/2 systems have
been set up to construct the queries intelligently before users access
the  mainframe. The  GUI features  color and  pop-up menus. The entire
distributed processing system runs on a token ring LAN.

The team also changed Cigna Re's administrative structure to match the
division's reengineered information system.  Now Cigna Re is organized
into  small groups  with  much  greater responsibilities  than before,
especially  for pushing  the division's  most profitable  lines. In 18
months,  the  reengineering  team  cut  Cigna  Re's  head  count by 30
positions to 115, plunging expenses by 42 percent.

I like to  call this Finding  Waldo,' says Symmetrix  president George
Bennett,  referring to  the popular  books that  challenge children to
find one image among hundreds. When  a company finds its own Waldo, he
says, that's where you invest $15 million and get $50 million back.

New databases, new products

Using Information to Cut Costs

At Cigna, one of the most radical examples of reengineering a division
came  in the  global risk  management unit  of Cigna  Worldwide, which
handles  the   insurance  needs  of   foreign  subsidiaries  of   U.S.
corporations.  Now a  SQL-based client-server  system enables division
employees to take the extreme step of calculating costs before pricing
a product.

When  actuaries  determine  the  price  of  insurance  premiums,  they
typically base their judgments on historical information showing how a
company's  claims   fluctuate  over  time.   Amazingly,  Cigna's  U.S.
underwriters  didn't consult  their colleagues  overseas to  determine
whether  local business  practices should  influence the  cost of, for
example,  insuring  the  German  subsidiary  of  a  client  like Texas
Instruments.   Even   more   surprising,   Cigna   didn't  evaluate  a
subsidiary's actual losses when the time came to renew the contract.

The problem  was a lack of  pertinent information. And the  result was
grossly  inadequate  judgments  about   how  Cigna  should  price  its
premiums. We  were making errors in  how we were pricing  our products
because we didn't  know what the ultimate cost would  be, says John C.
Thomson, the  senior vice president  in charge of  the Cigna Worldwide
division.  Caron's division  was called  in to  create databases and a
network for accessing them.

The resulting  client-server system uses  SQL to access  DB2 data held
locally and in Cigna's Colorado  data center. Communication is handled
by  56Kbps modems.  Besides providing  the capability  to access data,
Caron's group  developed a computerized model  that leads underwriters
through the process of pricing  a premium, compelling them to consider
local conditions and losses as they evaluate a client.

These  new automated  systems have   become the  basis of  several new
products Thomson offers his customers. The fanciest, called Cigna Risk
Information  Service,  allows  multinational  clients  such as General
Motors,  AT&T, and  United Technologies  to tap  into their  own Cigna
files to retrieve statistics about  claims filed against them anywhere
in the world.

We used a lot of classic reengineering techniques to actually redesign
the  process by  which we  do our  work, says  Thomson. These included
surveys of customer satisfaction, and  motion studies, which sought to
eliminate unnecessary hand-offs of work  and to streamline handling. A
third  technique known  as visioning  called for  Cigna's managers  to
articulate the  ultimate goal of the  redesigned process. In Thomson's
unit such techniques  reduced the head count 25  percent, or 100 jobs,
and slashed expenses $25 million, half of the ultimate goal.

The process hasn't been perfect, Thomson concedes. I'm running behind.
To be honest,  the loss ratio has not improved.  The goal was to break
even  by year-end  1992. I  think I  bit off  more than  I could chew.
------------------------------------------------------------------------

Journal:   PC Week  Oct 26 1992 v9 n43 p24(1)
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Title:     CorelDraw to run under OS/2 2.0.

Corel  Systems  Corp.  last  week  threw  its  weight behind OS/2 2.0,
debuting  a 32-bit  version of  CorelDraw that  exploits the speed and
advanced features of IBM's operating system.

CorelDraw 2.5 taps OS/2 2.0's new  32-bit graphics engine -- which IBM
finally  shipped last  week --  to deliver  25 percent faster graphics
calculations  as  well  as   more  efficient  loading,  importing  and
exporting of files, according to company officials in Ottawa.

The drawing package also takes  advantage of OS/2 2.0's multithreading
capability to service multiple requests simultaneously -- for example,
letting users open, save, print, import and export files in background
mode, without interrupting a specific drawing task, they said.

CorelDraw beta testers commended  the upgrade's multithreading support
and improved speed.

"I'm able to print to a printer or a plotter and continue to work on a
[file]," said beta tester Gennady Kleyner, an applications engineer at
American Training Center Inc., a computer-training center in New York.
"I can import  a file in PCX [format] and  continue to work in another
file, because it doesn't take up your resources like Windows does."

Unlike its Windows counterpart, CorelDraw 2.5 for OS/2 doesn't include
the CorelShow  module for producing slides  and templates because OS/2
doesn't support Windows' Object Linking and Embedding feature.

Analysts called Corel's embrace of OS/2 2.0 a smart move.

"Corel has  a very aggressive  cross-platform strategy," said  Jeffrey
Henning,  senior  industry  analyst  at  BIS  Strategic  Decisions,  a
Norwell, Mass., market-research firm. "OS/2  has a great chance, if NT
keeps getting delayed," Henning said. But  he noted that Corel has yet
to produce a long-awaited Macintosh version.

Corel  will have  competition  on  the OS/2  2.0 presentation-graphics
front, he  said. Earlier this  month, Micrografx Inc.,  of Richardson,
Texas,  introduced a  line of  OS/2 2.0  drawing packages, the low-end
Draw and the more powerful Designer illustration package.

CorelDraw 2.5 will feature a  number of modules, including CorelChart,
for charting; CorelPhoto-Paint, for retouching images; and CorelTrace,
which converts scanned images into drawings.

The upgrade imports and exports  Windows BMP, CompuServe GIF and TARGA
TGA  files, besides  31 filters  included in  its predecessor. It also
exports  color  bit-mapped  files  in  GIF,  TARGA,  TIFF, PCX and BMP
formats, officials said.

The OS/2 2.0 version, which is available from Corel distributors on CD
ROM as well as on disk, costs $595, down from $835; upgrades are $149.
Corel's   other   CorelDraw   versions,   including   those  for  Unix
workstations,     have     also      been     reduced     to     $595.
------------------------------------------------------------------------

Journal:   PC Week  Oct 19 1992 v9 n42 p88(1)
------------------------------------------------------------------------
Title:     HP will sell IBM's CICS on its Unix computers. (Customer
           Information Control System transaction-processing software)

Hewlett-Packard Co.  recently became the  first third-party vendor  to
resell      IBM's     Customer      Information     Control     System
transaction-processing software.

HP will develop a full implementation of CICS software for its PA-RISC
processors, including the HP 3000 and HP 9000 running HP-UX and MPE/ix
Unix.  HP  will  distribute,  market  and  support  its CICS versions.
Product details, including pricing, are not yet available.

In moving CICS  to HP processors during the second  half of next year,
the minicomputer vendor will build  on Transarc Corp.'s Encina monitor
for open  systems transaction processing, said  David Stevens, product
marketing manager for HP in Cupertino, Calif.

"This builds on  the Transarc technology and brings  to HP customers a
breadth of applications, tools and  solutions designed around the CICS
environment built up over the years," Stevens said.

CICS, which  currently is available from  IBM only on IBM  MVS and VSE
mainframes and on OS/2,  is the largest-selling transaction-processing
environment in  the market, according  to IBM officials,  who estimate
that  there  are  more  than   20,000  CICS  customers,  300,000  CICS
applications  programmers and  1  billion  lines of  CICS applications
code.

IBM  customers  have  been  asking  for  versions  of  CICS on non-IBM
platforms, said  David Chapman, OEM products  manager at IBM's Hursley
Laboratory in Hursley, U.K.

"In  transaction  processing,  customers  have  been  moving  data and
applications from the glass house to the network," he said. "When they
do  that,  they  ask  CICS  to  provide  the  application enabling and
solutions on a variety of platforms."

IBM has also announced that it  is developing versions of CICS for the
AS/400  minicomputer and  the RS/6000  workstation running  AIX. Other
candidates    for   CICS    development   include    additional   Unix
implementations, Chapman said.

Frank Dzubeck, president of  Communications Network Architects Inc., a
market researcher  in Washington, believes the  next likely candidates
for CICS support are Sun Microsystems  Inc. and OSF/1 vendors, such as
Digital Equipment Corp.

"To  fit into  the commercial  environment, [Unix]  has to  run legacy
applications  that customers  have in  the commercial  world," Dzubeck
said.

In order to simplify the development of CICS applications on different
processors, IBM has created a consistent set of programming interfaces
for CICS  that masks the  difference between processors,  according to
Chapman.
------------------------------------------------------------------------

Newsgroups: comp.os.os2.advocacy