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In the world of insurance and financial services, American International Group -- more commonly known as AIG -- is an industry giant. And from an I.T. standpoint, sustaining that giant -- with offices in nearly 140 countries around the world and a staff of some 92,000 employees -- represents a difficult undertaking, to say the least.
Heading up I.T. at AIG is Mark Popolano, senior vice president and global chief information officer. In his role, Popolano must operate as the I.T. equivalent of a jack-of-all-trades, ultimately responsible for the company's entire technology infrastructure.

Popolano, also president of AIG Technologies, joined the company in October 1994 and has held several leadership positions during his tenure. He has spearheaded projects ranging from massive call centers and data warehouses to e-commerce systems and supply-chain technologies.

Under his direction, AIG's I.T. is focused on speed, reliability, and integration. Popolano spoke with CIO Today about the challenges I.T. leaders face in today's business climate.

CIO Today: What are your top concerns as CIO?

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Popolano: I think our general concern is the agility of the organization. We have very diversified business models that require upgrades and new techniques. They require rethinking the middle, front, and back office. They require the ability to bring in new technologies that facilitate growth and maintain those things that make your company strong.

If you look at it from my side of the fence, it is a question of how to keep as agile as possible to go into new markets and at the same time maintain dominance in existing markets, retaining customer- and client-centricity and keeping your client portfolio rich and deep.

So those are the concerns from a business perspective -- getting technology to be an enabler, not distracting from extending services and permeating new marketplaces. That's what keeps me up at night. Our business models become the cornerstone of how we extend ourselves both inside and outside our network edge. Ultimately, it excites me because it will change the way we actually do our operational functions and the way we deliver to our customer a richer experience.

One of the things that is very exciting is the ability to create a greater mobile workforce -- the ability to distribute our information, as well as our applications, to any type of pervasive device. All of this depends on the backbone that is being established now for video, voice mail, instant messaging, and collaborative integration between the front and back office and external clients, customers, agents, and brokers. That I find very, very exciting.
CIO Today: How has the I.T. environment changed at AIG from five years ago?

Popolano: I don't think of it so much as change but as a journey. We've put in better processes and controls over many of the structures we have in place. What is also happening is that we've embraced newer technologies that deal with video and voice, IP telephony , and mobility , and we have strengthened our ability to respond to natural and manmade disasters. All of this allows us to be more responsive. We have not so much changed as strengthened our portfolio to be able to respond. Disaster recovery has been very key.

You can move your staff quickly. You can do satellite links. You can do integration to your back office. You can use mobile phones. You can bring in mobile computers. Those are changes that allow your business to extend itself, in some cases out to the street to actually work claims processing where people need that the most. I think that is the change we've seen in the infrastructure along the company.

Video, IP telephony, messaging, tablet PCs, and the ability to work with PDAs are all significant. The ability to extend our network or our building to the end-user -- to a customer of one -- becomes very critical. And providing knowledge to individuals to make intelligent decisions becomes very, very critical for a company of our size.

CIO Today: How have new legislative demands affected the I.T. department and you in particular?

Popolano: What these demands are doing is ensuring that the privacy and the controls are in place. They are allowing us to at least benchmark ourselves against the industry, against what's out there. They are creating standards in the industry about how companies need to protect themselves and their policyholders and clientele -- ensuring that trust relationship doesn't get broken.

Where it affects me is that it allows me now to sit with my compliance officers to understand the importance of data-retention and data-control policies. Setting up policies for people to follow is more work, obviously. And it's work that we need to be responsive to.
In terms of identity theft, you need to be able to put the appropriate controls in your organization. AIG sells a large book of identity-theft insurance. We were one of the first market leaders with identity-theft products. We now have mechanisms whereby we investigate our applications and make sure that, to the best of our knowledge, they are protected.

I think all companies -- not only insurance companies -- need to have an awareness about these issues because you have to protect your shareholders and your policyholders. It's on everyone's mind.

CIO Today: Which enterprise component or technology will be growing most in terms of its slice of AIG's budget?

Popolano: If you look at a component, it's going to be DASD -- or direct access storage device. We're capturing more information at more levels, and we're retaining a lot more than we've done in the past. The richness of the data allows you to react to your customers' needs as well as invent new products. We're storing more than we ever have before -- and we need to.

I don't know if terabyte hard drives excite me, as I only think about when that drive disappears how much we're going to lose. If the price points are better, they have the reliability, and there is recovery software that is built around them so in the event of a failure those drives is supported, then I'm very excited.

It's really the support structure around this stuff that is most concerning, not so much the technology and the media you store your information on. How do you now do a disaster recovery and distribute this information over long hauls in order to keep it pretty much in sync?

If you look at the compression ratios, the ability to compress software, the ability to compress information -- that is more of an interest. The ability to encrypt information, to control it, to secure it -- those are things that, again, being an insurer and a risk manager, are things that most concern me when looking at new technologies coming around the corner.

CIO Today: Can you walk us through the decision-making process of implementing a large-scale business-process management initiative?

Popolano: We have a series of processes in our organization that go from discovery to delivery. We have a process that, when a business initiative occurs, first we have our standards and general council look at it. They create a building permit, which is a series of questions about technology, risk, disaster recovery, and control. In that is the business process and requirements gathering. Basically, this is the process they go through for the analysis.
We then create the business case with the cost, which goes through levels of management all the way up the senior management, where it gets presented. Once approved, then we do managerial tracking. We use software to track the project and then look at it going through its stages to the end delivery. And then there are committees that review the steps, especially in very large projects, ever week or every other week until the project goes live. At that point, then it gets tracked after completion to see if we've really gotten the ROI.

The length of the process depends on the size of the project. Some of them go on for two or more years. And what we do is break them into small milestone steps. We do them in 90-day deliverables to get the process and the value business earlier and then grow along the chain, but we track the project from end to end.

CIO Today: What are one or two software or hardware products your company uses that you would describe as outstanding?

Popolano: On that one, I have to defer because we use so many products out there in the marketplace with so many companies. And if I actually say, "This is the great one," I'm going to probably annoy most of my friends. I'd get a few e-mails saying, "How come you didn't think of me?"

What I'd say is that we work with the IBMs, Microsofts, Hitachis, Suns, Ciscos, and EMCs -- and there are others -- on creating new products that help us evolve our operations to get the best delivery and agility within the company. We also deal with a lot of the carriers as well -- Avaya as well as Lucent, Verizon, and Mobile One. We have a lot of alliance partners on technology that give us many products that we leverage.

CIO Today: Which emerging technology do you see as most important to the enterprise?

Popolano: Pervasive and collaboration technologies are going to be critical. They are going to be the underpinning for transformation in the enterprise. A phone is no longer a phone. A PC is now simply a device that links into it. What we call search engines will be much different somewhere down the line, fostering a lot of the changes that will help transform companies and allow them to become more knowledge-sensitive.
We're going to see technologies that allow information to become very specialized to the customer. The portal designs that are coming around the corner -- those are the transformation agents of the next generation. They will allow us, in two to three years, to really service our policy holders.

I think these things are going to become key: tablet PCs, converged mobile devices, short message service, and instant messaging. Talk to the current generation and no one uses a phone, they IM themselves to death. Text messaging, collaboration, video conferencing, SharePoint in the back end -- there are other technologies we use in addition to those, but that's going to be the transformation you're going to start seeing in the field.

And you're going to start moving your applications up into what is called the network cloud, away from computing, per se, to a more distributed design of network services. I think virtualization clearly will have an impact here. We've been virtualizing a lot of our infrastructure -- both in our hardware space and the virtualization of the DASD -- that will allow us to do more distributed designs and extend ourselves further to the end customer. It's going to create new services. It's going to change the way we work through on-demand computing.

The mobile workforce is here today. More and more, the norm is that the brick and mortar will become invisible. You're going to start creating what is known as the transparent office. Nearly 30 percent of our workforce is mobile.

CIO Today: Where do you go to do your research on new technologies?

Popolano: We have a really intensive research group that works for me in the office of the CIO. We look at information that comes on Reuters and on CNN. We have a whole research group that does extractions for me on all the key products we look at.

We also have labs where we test the products as they come from the vendors. This way we can prove that they do what we think they will do. I think that's what allows us -- before we move them into the mainstream -- to know the weaknesses and strengths of the products so we can work with the vendors to improve them prior to deployment.

That's a strategy I put into place for the last eight years. We need the information so we can map against the business plan 36 months out. That's how we do it.