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11:40 AM
Kathy Burger
Kathy Burger
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Why Is Insurance IT So Hard?

The hardest thing about IT isn't programming skills. Rather, the stumbling blocks have much more to do with interpersonal skills, objectivity, organization, budgeting acumen and communications.

It's with no disrespect intended that I have to say that many years of covering insurance technology have convinced me that the hardest thing about IT has little to do with programming skills or sophisticated knowledge of computer science. Rather, the stumbling blocks have much more to do with interpersonal skills, objectivity, organization, budgeting acumen and communications. The human factor is a big reason why effective management of budgets and resources is a perpetual challenge for insurance IT executives, although the nature of the challenge varies depending on the organization, the business climate, competitive considerations and even technology innovation.

Sometimes it's about not enough money — IT budgets pared to the bare bones. Sometimes the challenge is too much money — projects that are generously funded but doomed to fail because they are funded without checks and balances, or for the wrong reason (such as catering to the boss's latest enthusiasm). Sometimes the challenge has to do with a vendor partner that promised too much or that failed to provide the necessary support. Sometimes it's about a lack of consensus within the management team around goals, strategies and processes. And sometimes it's all of the above.

Regardless of the reasons for dysfunctional IT, the costs are extremely high. According to recent research from project management consultant PM Solutions, approximately 37 percent of corporate IT projects are "at risk." Another way of looking at this is that the average company in the PM Solutions study faces $74 million of at-risk projects each year. The causes, the consultant reports, include "unclear, … contradictory, ambiguous, imprecise" requirements; resource issues; schedules ("too tight, unrealistic, overly optimistic"); poor planning; and risks that are "unidentified or assumed, not managed."

We've all encountered these issues; but addressing them does not have to be rocket science. After all, according to the PM Solutions research, the top action to recover a troubled project is "improving communication/ stakeholder management." To that end, the Insurance & Technology editorial team has produced a timely IT Resource Management Guide as part of the March 2012 print issue. We've examined critical disciplines — including project management, budgeting and benchmarking — to identify the best practices and strategies insurance companies of all sizes are using to optimize their IT resources and position their organizations more competitively.

The bottom line is that, while making the most of IT resources — whether they are scarce or plentiful — is difficult, it doesn't have to be as difficult as it often is.

[For more project management tips, read A CIO's 10 Rules of Project Management.]

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio

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