The Art of the Possible

By Clay Ricord
Senior Consultant

There is a strong likelihood that from a few to several IT projects have been cancelled at your company this quarter. These are projects that you were counting on to deliver operational improvements to your department. For the first half of the quarter, some research firms were suggesting that, while mutual insurers were more immune to postponements and cancellations, they were still pulling back and stock companies were making more aggressive pull-backs and delaying more decisions. On the list of delays are the major systems-replacement projects for policy and claims enterprise systems—ones that no doubt took many hours to get to the decision point and would take many more before installation even began.

The original business case for these projects usually includes both IT benefits from retirement of legacy systems, reduction of outdated skill sets, and improvement in interoperability and reliability. For a business, it is all about increasing competitive advantage, increasing operating efficiency, and making better use of staff skills. It was around these three pillars—competitive advantage, efficiency, and staff productivity—that most of the ROI was built that justified the effort and the initial cost. So, delays can be a real limitation on the performance of operations. Let’s focus on the business area: where do you go from here? What is possible?

Let’s start with the work already done to develop the RFP; it very likely focused on processes and needs related to information presentation, decisions, effort duplication, visibility, and getting closer to an STP state.

In some cases, you really do need that new system to deliver the full result, but from our experience with hundreds of companies, very impactful improvements in each of the three key areas mentioned above can be achieved in a short period. In some cases, this can be done with very little IT impact, and in other cases, it is possible to leverage and use existing solutions developed by other areas of the company, but perhaps in a totally different way. These changes typically will not be the high-profile types of changes associated with new systems, but rather changes at the point of work to help deliver targeted performance improvement. However, there are some basic pitfalls to be aware of in this process.
Waste, even a small amount of waste, cuts the benefits and payback times of organizational changes, so care in planning and execution is extremely important to mitigate risk exposure. This means avoiding pure throw-aways unless you can justify an ROI in a short timeframe, and it means supporting long-term process and performance behaviors and goals. Also, don’t invest undue time and energy improving low-volume/low-value sub-processes which do not yield significant benefits. By far, the biggest risk is the staff change factor: Is the new design easy?; is it consistent with the behaviors and the values you are trying to establish over the long run?; and does it add measureable value in the short run? Will the staff embrace the change? Do they see the value in it?