Most IT purchasing decisions made by insurance companies put careers on the line. Don't start a project until the costs and payback can be reasonably defined.The insurance industry has been exposed to much hype about new technologies. I believe executives should avoid this urge to jump on the next technology bandwagon.

The term "bandwagon" is the perfect euphemism for the hype. In the old days, when the circus came to town, the bandwagon-with its pipe organ and eye-catching acts-wended its way through the streets of the town, drawing people to follow it to the circus. The goal was simple: Get people to the show without giving them much detail about what the show entailed.

Many technologists today use that same tack-they lead you to the party, set you up with a drink, tell you to enjoy yourself, and then they head off to the next whiz-bang idea. No one sticks around to make sure that you had a good time.

By way of example, I know a person (not me, of course) who has six or seven different electronic organizers sitting in his (not my) office drawer with no earthly use other than to gather dust. (Okay it is me, and I just can't bring myself to throw these $200+ gizmos away.) Each was touted as the ideal way to organize my life. But each came with batteries, which go dry or have to be recharged. And each required more attention than I was willing to give.

That's a perfect example of jumping on the bandwagon. While the hard-dollar outlay for each system was easy to understand and accept, I find in retrospect that I didn't truly understand the real cost of using the technology: the time investment needed to learn how to use it properly, to maintain it "like new," and to figure out how to meaningfully integrate it into my life. In this case, the real cost proved to be more than I was willing to shell out.

Risky Decisions

For insurance companies, where software and hardware decisions rarely involve less than seven-figure price tags, we aren't talking about standing alone at a party or hiding a bad decision in a drawer. Most technology purchasing decisions made by insurance companies put careers on the line.

Yet, even in the face of such risk, the statistics on the abandonment of technologies are staggering. Many factors cause this, and bandwagon buying is one of them.

The biggest aspect of bandwagon buying that we don't face is that every technology choice constrains us from considering alternatives. And you can bet next week's hype will be a 180-degree turn from our decision.

As such, bandwagon or concept buying can leave us with that sinking feeling of "Oh my, what have I done?"

Another invisible issue with bandwagon buying is that products are perceived to be ready for general availability, when actually only one or two implementations are in productive use. The music gets loud and convincing, but it has been proved that even the 25th implementation causes stress to technology if it is encountering a new situation-and stressed technology carries with it tremendous costs.

We should never stray away from good old corporate finance and the return on investment (ROI) calculation. Don't start a project until the costs and payback can be reasonably defined.

I ran into a consultant with a great ROI calculator for technology projects and products. It was an insightful look at software and hardware acquisition costs, as well as support and maintenance hard-dollar costs. However, he included a number of obscure points. Many factors in his spreadsheet were not intuitive. Many items in his model were based on the school of hard knocks.

Wireless technology is receiving a lot of hype right now-yes, I think I see that clanging, brightly colored bandwagon coming into view. But before we get on board, let's make sure that the ultimate value proposition is why we hop on.

Stephen Abbott is president of Fiserv SIS.

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