SOURCE: X by 2

X by 2

December 09, 2011 01:18 ET

Insurance Company IT Failures Diagnosed by X by 2's Sundaram in Best's Review

FARMINGTON HILLS, MI--(Marketwire - Dec 9, 2011) - Insurers' IT transformation projects often implode, levying devastating costs in time, money and morale, K. Ram Sundaram, senior principal of X by 2, writes in the November issue of Best's Review.

"One in every four insurance IT transformations will fail completely, and many others will fall short of expectations or waste company time and resources," writes Sundaram, whose Farmington Hills, Mich., firm specializes in enterprise and application architecture for the insurance and healthcare industries.

He lists four causes.

  • Inexperienced People
    Insurance companies often have inexperienced leaders and teams to run their initiatives. Inexperienced leaders turn to mechanical hiring processes. This leads to a team of "fine-grained" specialists: technologists who know the intricacies of one or two specific systems, but are unable to grasp the bigger picture.

  • No Solution or Project Architecture
    A clear, comprehensive up-front architecture -- a logical, elegant framework for organizing complex requirements that describes the elements of the solution and how they interrelate -- is indispensible. But instead of a well-articulated vision, most projects will produce either too much documentation or none at all.

    Successful architectures must provide clear definitions of a project's desired end-state. "If the vision of a successful outcome can't be articulated in advance, it's highly unlikely to be achieved," he writes.

  • Inflexible Development Processes
    Even companies taking the agile approach sometimes overstress the rituals of agile methodologies. Successful processes, in contrast, remain open and flexible -- emphasizing short bursts of activities resulting in testable and usable working software.

  • Lack of Executive Involvement
    Senior executives often see formation efforts as merely "IT initiatives," which can seem impenetrable. Many executives will see only a technology problem, when there's a substantial business threat.

Having the right team, the right architecture, the right agile process and the right executive involvement makes for success.

"With these elements, there's a much better chance that the promises made will indeed be kept," Sundaram concludes.

"Choose Wisely" can be read in full at

Best's Review magazine is published monthly by the A.M. Best Co. for insurance professionals.

X by 2 ( provides architecture design, planning, oversight, and turnaround services on transformative enterprise-scale business technology initiatives. Clients include national and regional life, health and property-casualty insurers, and healthcare organizations.

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