There's been plenty of discussion across the industry lately about the advantages of short, rapid-fire IT projects as the path to fast and furious innovation — versus the long-term, months and years-long mega-projects that have characterized enterprise IT. Anyone involved in the deployment of policy administration systems can understand the depth of planning and months of work needed to upgrade or move to new platforms.
The need for fast-and-furious IT innovation seems evident. Competition is growing more intense, and customers are growing accustomed to a world in which online services are delivered instantaneously. An insurer with a slow and lumbering IT process may eventually see its business eaten away by a web-based competitor.
Whether to invest heavily in technology change is a matter before companies in all industries, and Bent Flyvbjerg and Alexander Budzier, both with the University of Oxford, recently explored the ramifications of pumping IT with “steroids” to help meet these new competitive realities.
In a survey of 4,300 IT managers, they conclude that the quicker the turnaround of IT projects, the less risk. Longer projects may run “out of control and incurs massive cost overruns and schedule delays. Every year of additional project duration increases the odds of a project turning into a black swan (an unforeseen event) by 27 percent.”
Two trends in the IT space are helping IT managers and professionals keep the pace of change accelerating. First, there is the rise of cloud-based platforms, tools and applications that are making resources readily available at a moment's notice. Second, there has been a continuing movement to the agile development model, in which teams of IT and business professionals work together on rapid iterations of solutions. So far, so good, Flyvbjerg and Budzierwrite.
However, there may be unintended consequences as well, they caution. The efforts to deliver short, iterative projects may result in “a preference for small, piecemeal innovations,” and even create too much of a focus on IT cost cutting, versus long-term innovation. Sometimes, it takes long-term mega-projects to move things in the right direction, Flyvbjerg and Budzier write.
Overall, it appears that there's plenty of upside to fast-and-furious IT project delivery. However, insurers need to design and adhere to an enterprise architecture — based on input from the business and IT — that ensures that rapidly delivered projects are part of a greater vision.
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.
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