Step by step: project management is the instruction manual companies use to get from initiation to completion of IT ventures.

Key Points

* Project management outlines necessary steps in developing an IT project.

* Five project management phases include initiation, planning, executing, controlling and closing.

* A No. 1 priority is making sure companies have the right people on the project.

The excitement of a furniture purchase can quickly turn to bewilderment when hundreds of seemingly incongruous pieces pour out of the box in need of "some assembly." Fortunately, the box also includes an instruction manual to spell out each step necessary to finish the job.

Developing an information technology project is similar, with project management operating as the instruction manual that gets the project from initiation to completion with no extra pieces left over.

Three 2006 A.M. Best Co. E-Fusion Award finalists know that firsthand. While each ventured on a unique journey to develop an IT project, they agree that critical steps include defining a need, planning, working as a team, managing risk and having management buy into the project.

Assessing the Need

Project management involves defining and achieving targets while optimizing the use of resources such as time, money and people. The nonprofit association Project Management Institute identifies five stages that guide the process: initiation, planning, executing, controlling and closing.

Organizations that haven't delved into project management sometimes question its importance. The answer is simple: Without project management, it's difficult to know not only a project's goals and how the process is progressing, but also how to perform tasks and how much time it all will take.

It all begins with initiation. For Ohio Mutual Insurance Group, the need for simplification ascended into a defined project: development of e-Quip'd, which allows agents to issue policies in their offices. The idea came to Assistant Vice President Scott Mackey when he saw a policy administration system able to immediately print information needed to complete a policy. "It was then that I saw the future," Mackey said.

BlueCross BlueShield of South Carolina's need to develop an online pre-certification tool came from a different source. Prior to the development of Web Precert on My Insurance Manager, the plan received thousands of provider transactions a month via its Web site. "Providers wanted us to take that a step further for precertifications," said David Boucher, assistant vice president of health care services.

Web Precert, accessed through the SouthCarolinaBlues.com Web site, allows providers to determine in real-time if a patient is a health plan member and whether a group-specific pre-certification is required, and if so, to get a precert number or a pended status.

The desire to move traditional catastrophe management into a different realm was the impetus behind Magna Carta Cos.' creation of its Exposure Management and Analysis Project. "Most companies work with reinsurers and retrospectively look to see what policies they're on if a catastrophe hits. We wanted a system that allows companies not to get on policies in the first place. Underwriters conduct analysis up-front and see if companies are overexposed in a particular area" said Chief Operating Officer David Lawless.

Studying measurable goals and the project's conceptual design are just parts of the initiation phase, Boucher said. Financial analysis of costs and selection of key stakeholders are also critical steps in the process.

Through the Looking Glass 

Planning is at the heart of project management. South Carolina Blues' quest for online precertification began with providing high-level cost estimates to its Commercial Web Steering Committee, comprised of members from various internal departments. IT then developed a granular scope document, designed mock-up screen shots and solicited provider feedback.

Magna Carta took a different approach. Although the company lacked a specific project management plan, Lawless said it took an "evolutionary" approach. "We knew what we wanted at the end and then built it." Planning began prior to Sept. 11, 2001, with the company exploring ways to clean up addresses in its database. "We decided to look at the data on a location level rather than a policy level, looking where a policy is actually located as opposed to where we mail the bill or policy. With multiple locations, we need to divide up exposures so addresses get tagged appropriately," he said.

Project Management at Work

Each company's venture into project management was unique.

For Ohio Mutual, the definitional phase was just that, the defining moment in the process, said Mackey. "That leads you to your estimates, time lines and delivery dates."

Magna Carta approached project management by separating the process into four projects, the first of which was the address overhaul. "We implemented an address verification software into our policy management system to ensure address accuracy," said Lawless. The company partnered with QAS and ESRI to accomplish that task. It then built a real-time exposure management database to track its active book of business and the associated exposure each policy represents.

"After 9/11, the project turned from a nice-to-have into a requirement," Lawless said. The project was designed and built to provide underwriters a real-time analysis of exposure based on in-force policies, from a geographic perspective. Every quotation generated in the policy management system automatically generates a PDF document displaying a street level map with existing policy locations highlighted and the associated total exposure within a half-mile radius of the quotation location. The map is then automatically transferred to ImageRight, a work flow and document management system for underwriter review before a policy can be issued.

Nothing is set in stone, however, and it's important that organizations realize plans can change. "We went into the process with the understanding that if something needed to slip for a week or two, it wasn't a big deal," said Boucher. He noted the difference from the recent Health Insurance Portability and Accountability Act transaction, code set design and National Provider Identifier undertakings where the company faced specific "go live" deadlines. "We had the luxury of some flexibility with this project," he said.

Project management is a continuous learning process, said Mackey. "For us, there was no project management experience in-house; rather, that experience came from our vendor. We went through a collaborative iteration process. Our business analysts had no Web experience. Instead, that sat with me and several coders. Business process experience and knowledge rested in the underwriting units," he said.

Teamwork

A Web-published article excerpted from the Handbook for Human Performance Technology suggests project managers acquire the best people they can and then do whatever it takes to keep the garbage out of their way.

A team of key individuals was the crux of Ohio Mutual's successful IT project, said Mackey. "There were no one or two individuals with all the answers. We built a team heavy on the business side." The challenge, he said, was asking underwriters to forgo having actual applications on their desks.

Along with internal IT and business units, eight select provider groups from different specialties were pertinent to South Carolina Blues' development of Web Precert. They provided usability testing of the system and helped in the pre- and post-implementation stages. "That allowed us to work with IT to make changes and begin coding the project," Boucher said.

Trust among team members is also critical, he added. "We agreed from the beginning that we weren't looking for a perfect product out of the gate, and we weren't going to blame each other; instead, together we celebrated minor failures or hurdles."

Sometimes success comes in small numbers. For Magna Carta, having an IT staff of only a dozen members allowed for easy identification of the right person for each task, said Lawless. "That allows you to get much accomplished within a short period of time because you don't have a lot of layers in your operations. We didn't have a lot of barriers to go through and got to focus on the things that really mattered." He said the company didn't spend much time celebrating successes or preparing presentations to display progress, but rather focused on any obstacles.

Homeward Bound 

Project monitoring or control--keeping a project on track, on time and within budget--is a vital phase in the project management process.

Keeping with established deadlines and delivery dates allowed Ohio Mutual to roll out its first project in nine months. "We have a tendency to be forced into some high-level ballparks, like completing this by the end of the first quarter," Mackey said. "But the squeeze forces us to get it done." New product rollouts are now completed in less than 120 days.

South Carolina Blues and Magna Carta were also on target with most deadlines and budgets, but that's not always the case. The Standish Group's 1994 Chaos Report found that of 175,000 major IT projects in diverse businesses worldwide, only 16% were completed on time and within budget. Fewer than half of all projects delivered the intended functionality, and nearly one-third were canceled before completion. Poor project management was identified as the biggest factor contributing to the high failure rate.

Much of that can be avoided by assessing and warding off potential threats and risks. For Magna Carta, creating a real-time exposure management database was the biggest hurdle it encountered, said Lawless. "We needed to ensure 100% accuracy of the data because it changed on a daily/hourly basis." The answer? Dividing the project into smaller pieces and stabilizing each component before proceeding with the next component, he noted.

Misunderstanding the importance of project management can be another hurdle faced by organizations, Mackey said. "The challenge on the IT side was understanding and respect for project management structures and processes. On the business side, the problem is that the process can be viewed as bureaucracy and not recognizing that it's a benefit to everyone," he said.

South Carolina Blues came up against a different challenge in developing its $1 million project--securing the needed IT hours to get the project approved. "We listened to what providers were asking for and conducted an e-survey to examine if they would use it. That helped demonstrate the internal business need to proceed with the project," said Boucher.

It's important that companies stay as high level as possible to accomplish a task, said Mackey. "There's a tendency to get so detailed in your task assignments that you'll spend more time recording times and efforts. However, if you're dealing with people who know what they're doing, you can label it as an activity and all individual tasks then are understood," he said.

ROI 

While companies may not always relish project management, Mackey said, "it's a necessary evil, and we have to have some sort of structure to accomplish the process."

Companies are seeing payoffs. For Ohio Mutual, e-Quip'd is now part of the daily landscape. "Every product developed now includes the system. We don't want to return to paper, and we don't consider anything delivered until the agent can use it," said Mackey.

The Web is the portal for more than half of South Carolina Blues' precertification requests now coming into the plan. Adoption rates have exceeded initial projections: 94% of Web Precert requests are resulting in completed transactions (i.e., automatic approval, precert not required, duplicate requests) with only 6% pending for additional information. "It's service before self, and we knew that if [providers] would use Web Precert, it may ultimately pay us dividends in the long run, and it has," said Boucher. The company is taking the project a step further and will incorporate its STATchat Voice-over-Internet Protocol functionality as an avenue for provider questions.

Magna Carta's Exposure Management and Analysis Project is accomplishing its goal of focusing on geographic exposure concentrations. Lawless said in hindsight he wouldn't do anything differently in the process. "The parts rolled out nicely." The project is providing reinsurers and other constituents the confidence of what risk exposure and risk tolerances exist, he said. "Reinsurers are happy with the level of detail we can provide when pricing reinsurance from them, and the better the data, the more confidence they have in us."

Learn More

Blue Cross Blue Shield of South Carolina

A.M. Best Company # 01727 Distribution: Independent agents, brokers, consultants, direct sales reps, direct

Magna Carta Cos. A.M. Best Company # 02945 Distribution: Independent agencies and brokers

Ohio Mutual Insurance Group A.M. Best Company # 03348 Distribution: Independent agencies

For ratings and other financial strength information about these companies, visit www.ambest.com.

The Road to Success: Steps to Project Management Ohio Mutual Insurance Group

Project: e-Quip'd Project management steps:

1) Established need.

2) Gathered information.

3) Developed collaborative "iteration process."

4) Developed definitional phase.

5) Rolled out initial product; followed by rollout of other products.

6) Instituted ongoing improvements and fine-tuning based on continuous user feedback.

Scott Mackey "There were no one or two individuals with all the answers. We built a team heavy on the business side."

Magna Carta Cos.

Project: Exposure Management and Analysis Project

Project management steps:

1) Identified need.

2) Developed and implemented series of small projects.

3) Partnered with software vendors.

4) Developed map.

5) Continued fine tuning and developed "traffic light metaphor" to determine risk.

David Lawless "[Having a small staff allows] you to get much accomplished within a short period of time because you don't have a lot of layers in your operations."

BlueCross BlueShield of South Carolina

Project: Web Precert on My Insurance Manager

Project management steps:

1) Identified need from provider community.

2) Designed tool.

3) Requested high-level estimate on potential costs from Commercial Web steering Committee.

4) Worked with IT to develop granular scope document.

5) Received and approved final cost estimate based on estimated hours.

6) Designed mock-up screen shots; solicited feedback from eight select provider groups.

7) Made changes, began coding and final rollout.

David Boucher "We went into the process with the understanding that if something needed to slip for a week or two, it wasn't a big deal ... we had the luxury of some flexibility with the project."