Download the authoritative guide: Cloud Computing 2019: Using the Cloud for Competitive AdvantageAs recently as 1998, Zurich U.S. Insurance, a property-casualty insurance giant based in Schaumberg, Ill., routinely engaged in tedious data gathering exercises that, by today's Web standards, seem arcane.
Every month Zurich would produce for each major corporate client a compact disc of the past month's claims (workplace injuries, accidents, etc.), then package, stamp, and ship it.
On the receiving end, corporate risk managers would install the CD on a computer, called the Risk Manager Workstation. They would then run a handful of pre-defined reports to spot patterns of claims activity -- say, whether a certain factory was seeing a high number of back strain injuries.
Once trends were spotted, the companies' risk engineering departments could start prevention programs, such as more training, to lower the rate of claims. By reducing claims, they could cut the cost of their insurance (for which they pay millions of dollars in annual premiums) and improve productivity.
It was also expensive: Gathering the loss-analysis data, built with PowerBuilder software, and shipping the CDs to hundreds of corporate clients was costing Zurich about $400,000 a year. Also, the software had limits, allowing clients to see data presented in only a small number of different analysis reports. "We needed a broader breadth of reports, delivered in a more timely way," Colletti says.
So, spurred by requests from clients, in early 1998 Zurich began searching for a Web-based solution to streamline data analysis and delivery.
Nothing To Show
Colletti recalls that even at that late date, few software vendors were ready to deliver business intelligence applications via the Web. He says several vendors told him, "We're thinking about it, but we don't have anything to show you."
The only company that stepped up with a potential solution (which at that point was still being tested) was Business Objects, which Zurich was already using for software that created in-house reports.
Founded in 1990 and based in France, Business Objects has built a healthy business by leveraging the Web to deliver business intelligence and analytics software. (It started out making client-server software for data analysis.) The company typically helps clients set up intranets and extranets that don't require specialized technical skills to navigate and generate reports. (It claims to have coined the term "e-business intelligence," or e-BI, in 1998.) Today, Business Objects has more than 13,100 customers in more than 80 countries. Revenues for 2000 were $348.9 million. Other players in the space include Cognos and Brio Technology.
Many of Business Object's customers are like Zurich, which was looking for tools to help customers delve into its existing (and constantly updating) claims database to mine key information in order to make wiser business decisions, with the goal of running more profitably and efficiently.
A New Way of Doing Business
Zurich saw the technology as more than just a flashy application. Zurich approached the installation as a whole new way of doing business, adding value to its relationships with clients by empowering them to make rapid decisions based on real-time analysis.
So, using Business Objects' WebIntelligence software, Zurich launched a customer extranet in November 1998. Called RiskIntelligence, the extranet lets risk managers quickly analyze data located on Zurich's mainframe.
Clients log in with a password on Zurich's homepage. From any Web browser, authorized managers can access and run more than 100 standard reports on data updated daily. Colletti says, "We took a 45-day window and turned it into a single day."
Zurich claims it was the first such extranet in the insurance industry. Today, RiskIntelligence serves 3,000 users at 600 companies.
Since RiskIntelligence is a premium service, Zurich charges annual fees to its clients and per-seat charges for each user. Additional seats cost about $200 per year; one client has 23 seat licenses.
Zurich has gone further to add value to the system. In addition to the standard reports available online, the insurer employs 16 staffers who can help clients further customize reports. The added revenue from these services pays for the staffers.
To illustrate the software's ease of use, Colletti says, "We don't hire technicians, we hire claims experts and train them on the tool. They know what to build (for reports)...It's all drop-and-drag, graphical interface."
Zurich says the benefits have been far-reaching. The company has won several awards for the way it helps clients use their data and lower insurance costs, improving its profile in the industry. And Colletti said the investment has led to significant new and recurring business.
"None of our competitors back in 1998 had anything like this," the vice president says. "We had customers as part of their RFPs asking to give them this type of" service.
Business Objects sells the majority of its business intelligence software on server-based systems. Pricing for InfoView (the business intelligence portal technology that includes WebIntelligence software) starts at $125,000 for Windows NT. On Unix, the price is $187,000 per server.
As a result of its experience in the U.S., Zurich's $45 billion parent company, Zurich Financial Service Group, has plans to roll out a version of the extranet for international corporate customers.