Capitalizing on Tech Investments.

While technologies have changed, approaches to implement them effectively are still largely the same.

With the dot-com meltdown and slower market-growth expectations taking hold, the competitive pressures to invest heavily in technology implementation appear to have been reduced. But wise insurers are continuing to invest significantly in methods to better meet the needs of their customers, distributors and employees, while at the same time lowering their cost of service. In fact, e-business applications have become the core technology investments for most leading insurers.

The issue now is how to get more tangible and attractive results from these technology expenditures. As many insurers have experienced, most new technology implementations are deemed to be failures. A recent Boston Consulting Group study indicated that only one-third of enterprise resource planning outcomes are viewed as positive, while Forester studies indicate that 60% to 70% of customer-relationship-management technology implementation efforts are viewed as unsuccessful.

While technologies have certainly changed, the effective approaches to implementing them are largely the practices that chief information and technology officers have used for many years. But the size and importance of these technology investments for insurers require that implementations are pursued with increasing vigor.

The following are seven proven approaches that insurers should consider:

* Establish a well-designed technology infrastructure plan: The technology architecture needs to be well established as the framework for building a well-designed e-business platform. Most importantly, the plan must clarify the standards and core applications that will provide the basis for all working entities throughout the organization.

* Align technology and business plans: Technology plans must be designed in response to business objectives and strategies.Aligning technology efforts to meet clear and well-defined business needs is essential to gain business benefits.

* Create strong business cases and assigned leadership for each project: Each major technology investment requires a clear business case defining the specific costs, timing and financial benefits that are to be gained. Risks should also be explicitly defined and managed. Objective management should review the business case and results must be tracked and discussed to gain the full benefits from this approach.

* Use effective project-management discipline: Both internal and external technology-implementation projects require a strong project-management discipline. For this reason, project management is increasingly being viewed as a core function within leading technology organizations. Creating a series of smaller, well-defined projects and managing the overall effort on that basis produces a stream of wins to build upon, rather than making one big bet on an initiative's success. Insurers also must choose vendor partners wisely and actively manage projects that are delivered by third-party organizations to ensure success. Monitoring progress against specific milestones during the project is critical along with a willingness to reassess subsequent project phases.

* Use packaged applications: While earlier e-business efforts often required customized solutions, now packaged applications that can be used as a basis for insurers are widely available. Success is based upon identification and selection of the best-of-breed packaged applications and then their integration into the overall technology architecture and systems.

* Plan ongoing knowledge capture: As insurers gain experience in evaluating applications and technologies as well as project management, much of the expertise gained is lost due to a lack of knowledge management systems for technology applications. The benefits from knowledge capture are substantial, but often are difficult to measure.

* Establish a talent-management program: The war for information technology talent is well understood by most in the insurance industry, where there is a substantial shortage of the skills necessary to pursue newer technologies. It is necessary to establish a talent-management program to attract, retain and motivate this important resource.

E-business technologies have heightened the need for focus and the speed at which insurers must operate. Being a risk-averse quick follower requires moving at greater speed as well as with greater discipline in making technology investments. Using a quick technology implementation diagnostic of these seven core success factors provides a useful and rewarding exercise for evaluating your current situation for technology-implementation projects. This will assist in evaluating how well your organization is implementing these fundamental approaches to make sure your technology investments truly pay off.

Steven Landberg is an insurance consultant living in Greenwich, Conn.