Tim Schaefer, CIO of The Northwestern Mutual Life Insurance Co. talks about why the company continues to fuel IT spending, how three key investments have demonstrated business impact from IT, what the company is doing to move up the IT maturity scale, how the company makes IT investment decisions, and what two things CIO’s can do to achieve business impact during this economic downturn. Despite the economic downturn, Northwestern Mutual isn’t about to rest on its financial strength. In fact, this company has continued to invest in areas, such as information technology, that can provide great value in terms of productivity, improved businesses processes, and revenues. Schaefer has used the economic downturn to make radical changes in the way IT is perceived and operated. An asset portfolio management framework the company uses to get a return on its $3 billion investment in technology.
Q-1 By changing the way his group talks about IT investments, CIO Tim Schaefer is trying to change the way the rest of the company sees IT. Why do you think this is necessary? What would be the prevailing mindset about IT in his company, such that he needs to do something about it? Provide some examples of how IT may be regarded in this organization. In Northwestern Mutual Life, “IT and business” are considered as “our business.” But Schaefer has asked 150 leaders to commit to being business leaders not IT leaders. If IT continued to behave in exactly the same way it always has. Then the result would remain same that at Northwestern Mutual, a life insurance and investment company with more than $155 billion in asset, IT has not. Schaefer goal is to get IT system to be viewed as business asset, with the value as real as the building and the land as the company owns. At last Schaefer got $3 billion to invest in IT by the company and to show this worth as investment not as cost of