Insurance CIOs need to be able to provide high-impact business capabilities to their organizations by delivering successful projects. Fulfilling this role not only helps the business, it also gives CIOs the credibility and respect they need to take on more strategic responsibilities. Without a solid record of project success, the CIO is unable to build the trust required to deliver value as a strategic executive.
We recently analyzed more than 40 successful initiatives at a range of U.S. insurers as part of our annual Novarica Research Council Impact Awards project. Whether the initiative was the adoption of a new practice, a quick hit project, an expansion of current capabilities or a wholesale transformation, every successful project shared a few common characteristics.
Articulating the business value in advance is critical for projects resulting in the creation of new business capabilities. Both business and IT need to agree on where the goalposts are, what will be included in the initial implementation, or postponed to future phases. Without a clear articulation of these issues up front, CIOs increase the risk of project failure and scope creep. A clear articulation of expected business value also helps keep the IT team's focus on results rather than the process itself.
While this is most obvious in new business capabilities projects, the same is true of projects focused on infrastructure-level investments or the implementation of tools that improve IT efficiency. By clearly communicating expected outcomes in terms of business benefits (reduced risk, improved project delivery time, improved transparency, etc.), many CIOs in our group were able to secure funding for these types of projects.
Consistent Executive Sponsorship
An additional advantage of clearly articulating business value is that it helps secure consistent executive sponsorship, which was cited in nearly every high-impact case study. Without consistent executive support, projects are extremely vulnerable to budget pressures, nay-sayers, and being killed at the first sign of trouble. This last risk is very common, since nearly every one of the successful projects we reviewed ran into trouble at some point. Challenges included lack of planning for change management, unexpected costs, midstream realizations of technology limitations or unanticipated user requirements, and lack of sufficient access to business resources. Secure executive sponsorship was a critical asset in weathering these challenges in every case.
Maintaining consistent and frequent communication across all stakeholders (business, IT and vendor partners, if any) is an important part of keeping that executive sponsorship and addressing challenges as they occur.
CIOs must make sure that business collaborators, not just executives, remain invested in the project. Clear, consistent communication about expectations and results is an important part of securing and maintaining attention from business collaborators. Whether the communication comes through a steering committee or from a project leader, all stakeholders should be kept current with bi-weekly reports at the least. This enables early recognition of small issues before they become big issues or, worse, big surprises.
With the buy vs. build pendulum seemingly stuck at the buy end of its arc, most significant projects are likely to involve vendors. Project teams need to collaborate closely with their vendors and regard them as partners in delivering the project. This means vendors should be selected for their technical capabilities or product specifications, as well as their ability to collaborate on delivering successful projects. In the cases we reviewed, close collaboration with the vendor was nearly always cited as an important success factor.
Clear, easily communicated success metrics are important for managing the project effectively and for demonstrating its value once it is complete. Some of the success metrics in the projects we reviewed included increased transparency of information, increased positive user feedback, increased revenue and customer retention rates, reduced time to market, increased straight-through processing rates, reduced time-to-issue, and other key performance metrics. Being able to document these metrics was critical in claiming victory for these project teams. It also helped secure additional credibility for the IT group in general and the CIO specifically.
In a time when all of the major strategic issues facing insurers are directly or indirectly related to changes in information technology, it is more critical than ever for insurer CIOs to build their track records of success and make their voices heard and respected at the top table. Delivering effective projects that solve current business problems positions CIOs to help their organizations succeed in a world that demands so much. Some of these demands include: better use of data in marketing, claims and underwriting; improved modeling capabilities; and improved communication and workflow capabilities. All of these are dependent on a company's information technology abilities, which depend in turn on effective and influential technology leaders.
Matthew Josefowicz is a partner and Managing Director at Novarica, a research and advisory firm focused on business and technology strategy for insurers. He can be reached directly at mj@novarica.com. The Novarica Research Council Impact Awards nominees were profiled on insurancenetworking.com in October 2012.
