Investing Wisely in Digital Transformation

The American Armed Forces Mutual Aid Association (AAFMAA) was facing a need for new digital services to attract a new generation of members. However, the business was anchored in legacy IT systems, and a rip-and-replace project was deemed too costly and risky. In 2005, AAFMAA needed to innovate and change because the old ways of doing business simply didn't appeal to the new digital generation. Digital business transformation was the answer, but IT could barely handle current business needs. Rip-and-replace projects often seem like the only answer. But getting rid of old systems means losing decades of investments. Worst of all, these expensive multi-million dollar projects come with no guarantee of success. As a practiced investor used to managing risk, AAFMAA didn’t like these odds.

The American Armed Forces Mutual Aid Association (AAFMAA) is the longest-standing not-for-profit military aid association. It provides current and former military families with affordable financial solutions, including life insurance, wealth management, mortgage services, and Survivor Assistance Services. Its service-focused employees manage investments in excess of $1.2 billion. Forty-two percent of AAFMAA’s employees are military related. Members were paid more than $88 million worth of benefits in 2017 alone. The member-owned AAFMAA serves “soldier, airman, sailor and marine”— more than 90,000 of them actually. And its services are crucial. In 2017 alone it helped more than 16,000 survivors obtain 100 percent of their entitled benefits. AAFMAA provides all its services, including investments, without charging a single cent in commission. Keeping operating costs low and services efficient is, therefore, business critical for AAFMAA. Not only that, but every dollar saved goes directly back to work for its members.