Whether constructing a building or deploying new IT systems, developing good and credible estimates is foundational to any process that leads to committing resources for achieving a business goal. Developing estimates is at the core of effective IT governance, but IT organizations are frequently viewed as poor performers in this area.

For CIOs, the best defense is a good offense: Managing the estimation process can markedly improve performance, and executing the following best practices can help CIOs deliver on strategic plans.

Foster a strong working relationship with key partners. As service providers, CIOs and their teams must understand issues from the perspective of each business leader. To foster dialogue, CIOs can encourage exchanges of ideas over meals or invite speakers to join town halls or staff meetings to demonstrate interest in building working relationships.

Open the estimation to outside inspection. To many executives, the estimation process is yet another black box that sits in the IT world. Develop an explainable methodology to illustrate the process and any planned or evolutionary challenges. This will facilitate the education of business partners and training for IT staff.

Document estimation vs. actual performance. Support those discussions with data that illustrates past performance, operational challenges and initiatives that worked well. Categorize the IT project portfolio to distinguish between discretionary and production-oriented efforts. It's valuable to show how projects will be evaluated across their life cycle, through change requests and into final implementation.

Routine reporting. Evaluating performance should be the norm, not the exception. The ability to assess the performance of investments in a portfolio of technology projects is vital to IT's credibility. A reporting dashboard that includes current-period performance and long-term trends can illuminate underlying issues and be invaluable to oversight committees.

Fund a project to develop meaningful estimates. There are times when project requirements or other available options are vague. By funding a project that plans the bigger initiative, the right talent can fully vet the effort and better assess available alternatives.

Review the software development lifecycle. An English-language clarification of key events helps ensure appropriate participation and ownership. While a formalized SDLC offers clarity around roles and responsibilities, as well as a road map for how and when things take place, the reality is that they bring technical and unfamiliar lingo to line-of-business partners. Establish clarity around the intent of process phases and confirm a shared understanding of terms while looking for cross-functional empowerment.

Build a clear, controlled IT governance process. Business sponsors need to feel shared ownership of, and investment in, the governance process. Create an effective and flexible model for apportioning technology resources to the business units' various needs. The more engaged your business counterparts feel, the greater the opportunity they will have to align resources to the carrier's needs. Invite groups to frame a model collaboratively. That experience can offer clarity around the real questions, before people become emotionally or financially committed to a specific answer.

Remember organizational change management. Organizations frequently focus on the difficult technical and financial aspects of major project implementations and neglect the people side. Organizational change management has implications early in a project's lifecycle, and CIOs must factor in cultural change. Change comes slowly to organizations and management, even at the level of governing aggregate IT spending and resource allocation.

Integrations require collaboration. Agile development can improve delivery and functionality, but collaborate and coordinate from the beginning. Illustrate outcomes and reflect collectively on the impact agile has on estimates and outcomes. Working with peers to learn more about what works can increase confidence in an iterative estimation process model.

Review lessons learned. While moving a major project from inception to closure and post-production support, capturing insights about areas that need improvement should be routine. It facilitates a mindset of continuous improvement, and identifying root causes for deviations in the moment can be tremendously insightful. Brainstorming can be an effective way of distilling this information from a team while the experience remains top of mind.

Insurance companies are critically dependent on IT resources and systems. By considering these factors, CIOs can squarely face competitive threats and expense pressures and get their IT governance models right, creating the foundation for stronger and more easily understood estimates for future initiatives.

INNSight is exclusive commentary from Novarica. Robert McIsaac is a principal focusing on life insurance, annuities and wealth management at Novarica, a research and advisory firm focused on business and technology strategy for insurers.

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