Project Managers Reduce Internal Risks
I was very interested to see a recent report from “Computer Economics,” which noted that IT organizations today are relying more on professional project managers (rather than staffers) than even a few years ago.
The report speculates on several reasons for this trend, including new technology adoption, regulatory compliance issues, outsourcing, and the ever-present mandate to do more with less.
If those reasons sound familiar to insurance industry readers, they should because they are oft-cited as technology issues for our quiet little sector of the technology universe.
The report also points out, “Perhaps the most pressing reason for the growth in project management personnel is that many organizations have a poor record of bringing IT projects in on time and within budget.
Worse yet, many projects fail to meet key requirements, and some never reach completion. Much of the work in IT organizations today is project-based, and IT managers realize that project management is a critical element in delivering successful projects — and thus, value — to the business.”
It’s a well known fact in Information Technology that IT projects fail at a rate of 65 percent or more.
Again, all true of the insurance sector, but I would add that while successful projects are highly valuable to our business, the failure of such projects is a major risk — especially in this time of intense competition and shrinking insurance margins.
Yes, many projects do fail to meet requirements or are never completed, and this can mean losses well into the millions when one considers the time (often years), resources (both human and financial), and software and hardware investments that accompany a major project such as modernizing a legacy insurance system or ripping and replacing all or part of a policy administration system.
It’s a well known fact in Information Technology that IT projects fail at a rate of 65 percent or more. With the sword of that number hanging overhead, it is a wonder that insurers undertake any such projects.
But, risky as they are, IT projects are obviously necessary for insurers that want to deliver products and services more quickly, not to mention those that want to keep pace with their technologically active competitors.
Obviously, we in the insurance industry want to reduce this risk factor, and turning to professional project managers is a logical step toward reducing the possibility of failure.
Prior to the recession, according to the CE report, project management staffing levels averaged a full percentage point lower than they are now. “The data indicate that project management becomes more valued when budgets are tight and projects are being altered or outsourced,” it said.
According to the Project Management Institute, its Project Management Professional (PMP) credential “is the most important industry-recognized certification for project managers, and demonstrates “experience, education and competency to lead and direct projects.”
Isn’t this just what we are looking for to keep our insurance IT projects as low-risk as possible? This is not to say that some of the folks already within our enterprises are not capable, but when failure has such significant implications, we must take whatever steps we can to ensure success.
It makes great sense for insurers to either get their IT staffers certified by one of the bodies that does such certification, or to bring in individuals who are so certified to oversee their critical projects. Whatever reduces risk should be warmly welcomed.