Insurance and IT Projects

I have been associated with the Insurance domain for over 12 years now and all my projects management related articles are based on my insurance projects background. This article tries to understand the relationships that exist between Insurance and IT and how to successfully execute IT Projects in the Insurance industry.

Insurance Industry Project Management relationship:
Insurance companies have a need for IT project implementations mainly based on their business requirements wrt speed to market a product, to align the organizational, cross divisional efficiencies, to reduce costs, to optimize processes across organization etc.
Insurance industry has a vast paramount level of experience wrt the business knowhow, but when it comes to the project management, there is required a specific skillset that will get the job done right, the first time.

Business need:
To execute projects in Insurance domains, the first and foremost thing that has to happen is to understand the business value expectations by clearly articulating and understanding the business requirements. Once this is defined, it is necessary to understand the current state and future state of the business processes so that it will help to optimize or leverage the technology solutions that can make the transformation possible.
Once the Technology solution is defined on paper atleast in a draft version, it is necessary to develop a high level roadmap taking all the stakeholders and project sponsers in confidence and develop a high level implementation plan. This takes into account and aligns the Program/Project level goals wrt Scope, time, cost, quality and resources.

Project Types:
Insurance projects vary from small size and budget to mid size - product implementations to enterprise level transformation Initiatives. Depending on the project types, the application and business needs, the project management processes and methods are decided.

The most common project categories of Insurance IT Projects are,
 - IT System or enterprise level system consolidations
 - Insurance Product implementations
 - Application development, maintenance and Outsourcing
 - Systems integration
 - Pure IT Outsourcing

Methodology:
Projects in Insurance IT can follow any and all methodologies of execution. This entirely depends on the organization culture, project size, type, budget etc.
Traditionally Projects have been following the waterfall methodologies and in the new age either lean towads the RUP or Agile execution methodologies or a mixture of the two.

Project Manager Success criteria:
For a Project Manager to be successful in the Insurance IT Domain, he has to have Insurance business processes, operational knowledge along with Technical knowhow and skills
To elaborate,
Business Process knowledge
Understand the insurance domain industry, atleast the functional area with which the project is associated - either policy, billing or claims
Understand the various roles played by the stakeholders, SMEs and end users like Customer service (CSR), Intake, Accounting, Underwriting, Billing and collections, Operations, Sales, Marketing etc

PMO:
Successful Execution of Projects in the Insurance domain industry is based first and foremost on laying proper groundwork in terms of having a proper Project Governance plan or setting up a formal Project Management Office (PMO). PMO based on the project scope will divide or structure the project by LOBs based on business efficiencies to be achieved.
Another point to note is that since Insurance is a highly competive industry, driven by business needs, project Management exposure even if it exists will be in cross functional areas or even in deep departmental silos. So what this means is, the PMO has to first allocate and then align the Organization resources towards the common objective set and goals. For successful execution, the PMO should have a common and consistent approach in executing the projects. only this will ensure a common platform and lay the basis of future project success.

PMO functional areas:
PMO in Insurance IT will have to deal with Vendor management, project planning, budgeting and structuring, project communication and risk management planning.
PMO has to keep in focus the enterprise level impacts of the project being executed, be cognizant of the project management and execution costs wrt scheduling and planning tools, development and status tracking tools, configuration, testing and issue resolution tools. 
The roles of the executing body have to be well defined as a part of the planning process.The Team has to be made aware of the various phases of project management, the dependent roles and parties involved e.g. requirements, development, infrastructure, testing, QA etc
Scope creep and cost overruns need to be managed very carefully to ensure project success