Organisations considering insourcing must be fully prepared for the substantial cultural and structural changes it can bring, according to the CIO of one of Australia's largest insurers.

In a warts-and-all presentation on reclaiming IT architecture from vendors, David Issa, CIO of Insurance Australia Group (incorporating NRMA and CGU), warned a Sydney conference you only ever get one shot at it, although the business benefits of insourcing can be huge.

"My view is that you only have a one in 10-year chance to get [your architecture] right. We took the decision in January [2003] to insource and the cycle takes around 18 months. But we decided it was the best way to go," Issa said, adding the group will save $17 million on business processes alone, before adding IT efficiencies into the mix.

Issa also revealed just how quickly IAG was forced to make the decision to buy its way out of a 10-year facilities management contract with IBM GSA - and what he walked into on his first day at the office.

"The first day I arrived, we [IAG] announced [the merger with insurer CGU] to the markets. The first six weeks were based on figuring out the new business model [for the merged organisation]. The next six weeks were figuring out the tasks…the systems and the time frames," Issa said.

Confronted with three data centres in two states, duplicated sets of enterprise applications, transaction and claims processing systems, legacy systems and premium rating engines, Issa said any task of consolidating the systems of two enterprises had to be knocked over quickly and competently.

"If you miss dates by weeks on a big project, people can understand. It's when you miss them by three months that people start to get annoyed. It's the same old thing where people say 'technology are a bunch of whackos and they don't know what we want'.

"You can't just give a heap of Powerpoint presentations. You have to tell the board what you want to achieve," Issa said, adding that in his case, it meant getting applications architecture to properly reflect the core competencies of the business.

Meanwhile, Issa's frank description of what happens when insourcing meets physical requirements of merging two companies is worthy of reality TV.

"We struggled with operational stability. Systems are there, then they are not… that hurt us a lot. If you move 600 people into a building that held 300 you run into things. In the building we were in, the backbone of the network was copper, not fibre. Then we went to 24x7 from 9am to 5pm, five days a week. The building just wasn't set up for that," Issa said.

Asked if he would do things differently in hindsight, IAG's CIO said integrators on a mission "just have to wear the flack".

"[Given the circumstances] I'd do the same thing again. If you don't do integrations quickly, they don't happen – something else comes along. Business cycles these days are six months; you just can't spend three years [to transition] a legacy system.

All change at IAG

Three data centres consolidated into one.

Three mainframes (IBM) into one (leased).

Standardised and integrated applications architecture including: HR (SAP), general ledger (SAP), transactions and billing (custom build), CRM and pricing and premium engines (custom build).

SOE upgraded to Windows XP.

55 servers to 20.

Storage capability to be consolidated and standardised across "one consistent, preferred technology" across "mainframe, mid-range and NT environment[s]".

XML layer between new Web-based front-end applications and back end.

Data recovery to be outsourced.

Substantial data cleansing, new search facilities and data input rules.