Oleksiy Mark - Fotolia
It is Vastela’s belief that IT should embrace a more communications-orientated approach – and he practices what he preaches.
“When I joined the company, the merger of Lähivakuutus and Tapiola Group had been completed in a business sense, but the ICT merger had not yet even started. There were two versions of every system,” says Vastela. “It was clear from the start that this role is not about small issues, but a large transformation – the creation of LähiTapiola’s own ICT.”
During his first 18 months at LähiTapiola, Vastela has focused on building the insurance group’s architecture, ICT strategy and updating sourcing and resource management guidelines. But his biggest challenge has been less technical – to build an understanding of the upcoming changes across the entire company.
“To keep people motivated and committed to change, you have to create a clear thread for the transformation, which explains what we are doing, why we are doing it and what the goals are,” he says.
Vastela describes ICT as a narrative: “We need a story to tell, both to business directors, who make the investment decisions, and to employees, who will actually use the tools. They have to understand why we are doing what we are doing.”
Vastela says mergers always include a danger of ICT getting trampled by other issues and left unmanaged. He has been determined to avoid this at LähiTapiola.
“The first thing I wanted to introduce was control. To make it clear that these are the cards we have been dealt and this is how we are going forward. The message seems to have been well received, both by our personnel and stakeholders,” he says.
Outsourcing is always asymmetric
Before joining LähiTapiola, Vastela worked for several banks, both in Finland and Sweden, including in the role of CIO at the Finnish Saving Banks Association. The finance sector has always appealed to Vastela, who studied economics with a minor in computer science.
“It has proven to be a good combination, as my career has not been very technical or technology-orientated. Instead I have always worked between business and ICT,” he says. “My role has been to translate the needs of business into the language of ICT. My career has been focused on change management.”
“I have always worked between business and ICT. My role has been to translate the needs of business into the language of ICT”
Mikko Vastela, LähiTapiola
At LähiTapiola, Vastela is leading change through an internal IT team of approximately 100 people. The team specialises in ICT architecture, modelling and project and continuity management. Almost everything else is done externally by a handful of strategic outsourcing partners and over 100 smaller IT partners.
While this approach relies heavily on partnerships – LähiTapiola’s ICT strategy stipulates that 10% of IT is done internally and 90% externally – Vastela doesn’t entirely agree with the recent trend of outsourcing everything except the core business.
“A sourcing strategy should start from understanding not only what is important to do internally, but also what you want to do yourself. This can include functions other than the core business,” he says. “In IT, someone else might do managed services or application management more efficiently, but you may want to keep application management internal because it brings business benefits or is used for market differentiation.”
He believes there are always conflicting targets because the company is looking for service quality while the supplier is looking for a good profit margin.
“You can do all sorts of outsourcing, insourcing or rightsourcing agreements, but you need to have a strong vision of what you are trying to achieve and this needs to be clearly communicated to your partner,” Vastela adds. “Otherwise there will be conflicts.”
The myth of a stagnating finance sector
The finance sector has a reputation for being old-fashioned and slow to innovate, but Vastela believes this comes from people not understanding the realities of the industry. It is not that the finance sector doesn’t want to move fast but that it needs to adhere to strict regulation both on national and European level.
“Among other things, we are not allowed to take data outside the EU. It means we cannot do outsourcing agreements where all services would be provided from somewhere like India or the Philippines,” says Vastela. “It adds an extra level to agreements, as we always have to ensure that regulations are followed closely. Otherwise we can end up in trouble with our regulator.”
Vastela believes regulation does not necessarily make IT difficult, but brings complexity to many processes which can lead to inefficiencies. However, LähiTapiola demonstrates that this does not need to stop the industry from innovating, as the corporation has implemented its own agile development system – the competence centre model.
“It is based on agile teams that have a few people from LähiTapiola, typically from the business, architecture and data security side, but most team members and all developers come from our partners,” says Vastela. “This means we get lots done with a small resource investment while the developers aren’t left alone with the project.”
Mikko Vastella, LähiTapiola
The key to the competence centre model is constant dialogue, which is made possible by sharing the same physical working space. LähiTapiola has previously experimented with shared virtual tools, but has found them less efficient as there is a higher barrier for open and impulsive communication. Now the company has earmarked a whole floor for agile teams to work for the duration of their project.
“In addition to our own people we might have two or three service providers involved in the same project. When people are in the same working space, there is constant discussion and project sprints are more efficient,” says Vastela. “There are no ‘Chinese whispers’ where the service provider is not sure what is expected of them.”
Omni-channel has come to stay
While the IT transformation is occupying a large chunk of Vastela’s time, LähiTapiola is also preparing for the demands of digitisation and 24/7 services. The big question for the group is creating an effective multichannel strategy. LähiTapiola has more than 200 bricks and mortar branches around Finland, which are already mainly used to advise customers in complex insurance and finance issues. But everything else is moving online.
“In the future our branch network won’t cater for basic insurance needs, only for the most difficult and important cases. We will continue to have branches, but it doesn’t reduce the need for digitisation,” says Vastela. “You should be able to start the insurance process online, continue it over the phone and finish it at the branch, for example. That hasn’t happened yet, but digitisation in the insurance sector means a coherent management of this process through all the channels and not having any anomalies.
“We talk about omni-channel. You can slowly start to deal with an issue, hop between virtual, physical and self-service channels, and it all works together,” Vastela concludes.