There are at least three options for organizations operating tech; outsource it, run it at the department level or create a hub for innovation. Each has benefits. Each has sprawl.
Liberty Mutual, the sixth largest property and casualty insurer with 45,000 employees worldwide, enjoyed the rewards of relying on a tech hub and found ways to train its engineers to push for excellence amid common tool adoption.
Operating as an "internal software house," Liberty Information Technology touches all parts of the business, and represents about 10% of the overall workforce, according to Dave Anderson, director of technology at Liberty IT.
For many years, Liberty Mutual has "treated technology as a differentiator," a core part of the business, Anderson told CIO Dive. More than a decade ago, the company began thinking seriously about moving to the public cloud.
Modernization hinged on three tenants: Transformation, a journey to the public cloud and taking business along on that journey.
As Liberty Mutual made the decision to migrate workloads to public cloud, it had to think through the treatment of public cloud. "It's not someone else's data center," Anderson said.
"You're basically dealing with a server that's ephemeral," he said. It's a cultural shift.
How to approach the cloud
The insurance industry has become more comfortable with cloud computing, though hangups from legacy systems, and privacy and security concerns linger, according to a 2019 Accenture report. More than half of insurers have an IT operating model which aligns with a cloud transition.
More than two-thirds of insurers have a plan on how to migrate legacy applications to the cloud.
Liberty Mutual runs a serverless computing model, which leaves the cloud service provider (CSP) to run the server and distributed computing resources. Serverless became a part of cloud lexicon in 2014 when Amazon Web Services debuted Lambda, which automatically runs code without requiring organizations provision servers.
It makes way for a flywheel effect, Anderson said. When engineers start on the cloud, they get up to speed quickly. A serverless approach passes responsibility of managing the environment to the CSP, eliminating the burden of infrastructure concerns for software developers. It creates room for focus elsewhere, such as developing software assets.
One-third of organization use serverless computing, according to a recent O'Reilly survey of 1,300 technologists. But plans for adoption are stagnant and many organizations aren't pinning cloud success to serverless adoption. More than 60% of respondents' organizations have no plans to adopt serverless. Almost 20% plan to adopt it within two years.
About halfway done with its cloud migration roadmap, Liberty Mutual approached the cloud in a "holistic way" from the start, targeting not just costs, but deep transformation, Anderson said. Deployment was tied to creating business value for end customers.
The company also had to get the principles of securing and working in the cloud right. While there's different ways of deploying software, training engineers and orchestrating a move to the public cloud, centralized management creates cross-organization consistency.
Between five and seven years ago, organizations on the front-end of the cloud adoption curve created highly-autonomous teams, Ola Chowning, partner at ISG, told CIO Dive. It flattened the organizational structure, distributed IT and had technologists working directly with the business.
"While it sounded really wonderful, it was really expensive," Chowning said. A byproduct of operational sprawl was tool sprawl, and organizations lack the efficiency of a common tool set.
There was a recognition that enterprises "should always have this digital backbone," that is driving consistency and efficiency, with consultation across teams, she said.
The pull now is for companies to centralize core aspects of the technology organization, with technology teams operating like consultants, pulled in and out of lines of business.
Though it appears an overarching technology group might limit flexibility, team structure is not rigid. If a line of business needs to quickly pivot, and management allocates budget, centralized team structures allow for consultation when needed.
The pandemic showed IT should be a driving force of business operations, and it all comes back to automation, George Burns, senior consultant of cloud operations at digital tech consultancy SPR, told CIO Dive. Any IT manager or CIO should look through the lens of flipping problems into processes.
"How can you break your resources down so you can consume them as you need to?" Through it all, cloud is the fabric, he said.
Leave configuration to the CSP
Consider the spheres of influence. Liberty Information Technology manages and operates the technology stack. It leaves the CSP to execute the details of back end. And the business can adapt and innovate at will — moving parts of infrastructure is not their concern.
Though a CSP can manage an environment with serverless, the human element creates a consistent change, one all organization can relate to. Engineers aren't free to code without thinking through output; they still need alignment with the end-product.
It requires engineer excellence, Anderson said. "There's almost a journey we've had to take our engineers on." Engineers need to understand how to build a solution, layering on cloud certification and competence requirements. Then there's the architect lens and ensuring the technologies are instilled with the principles of serverless.
That's cost optimization, security and performance, he said.
At Liberty Mutual, technical teams think of "code as liability."
If you have a large engineering team, you might think of code as an asset, Anderson said. In the new world, that's not the goal. "The less code, the better" because that means teams are using the provided tools.
The better approach is to consider what's the business tools engineers are trying to deliver, and reduce complexity by offering as little code as possible.
In order to create an elegant solution to business problems, it requires a more elegant use of skills, he said. Instead of coders, the business needs software engineers, "engineering software for their end users."