During these dynamic economic times, many Property & Casualty business partners are adjusting to shifting markets and thus demanding even more services from their IT departments. However, IT budgets are not able to keep pace with the increased demand. This article discusses how IT leaders can implement key strategies to provide for these evolving business needs while controlling expenditures.

As insurance products continue to become more commoditized, IT departments are pushed to provide features that can create competitive market differentiation. Property & Casualty companies now require more frequent rate changes, new product line rollouts, varied product distribution channels, agent and consumer web portals, and other creative IT initiatives without a commensurate increase in their budget.

In many cases, operational IT budgets are shrinking to offset the poor performing investment portfolios and the deteriorating loss ratios resulting from a prolonged soft market. Clearly, CIO's must find areas of operational efficiencies in their existing systems while investing their limited capital budgets into new technologies that will ultimately reduce labor costs. Such savings are often realized by delivering real-time and automated point-of-sale underwriting, binding, policy processing, and consumer self-service.

Selecting a quality IT Services vendor is also a key to implementing any new technology on time while correctly allocating internal resources to the proper initiatives. For most organizations, attempting to do everything with in-house resources is not only difficult, but also creates complexity in differentiating between operational and capital expenditures. CEO's want to see lower operational costs while verifying that capital investments are paying off. Proper selection and utilization of IT Service vendors will allow expedient implementation of new technologies while also easily tracking operational vs. capital costs.

The selection of IT Services vendors should focus on candidates that already know or focus exclusively on the insurance business, provide high-end analysis services for requirements gathering assistance, implement end-to-end projects under varying contractual arrangements, have developed in-house centers of excellence for technology competencies, maintain global resource delivery capabilities, and are recognized as successful partners to other insurance companies & vendors. Partnership with the right IT Services vendor is a significant key to success.

Finally, efficient IT spend requires attention to Project Portfolio Management. This entails a holistic approach to the management, coordination, and organization of the various operational and capital projects within IT. It is an important aspect of success and is often overlooked within dynamic IT shops.

It is not unusual for vendor augmentation staff to work with internal resources on operational and capital projects simultaneously. This often blurs the distinction between new and maintenance projects. Under these circumstances, it is more difficult, but not impossible, to produce meaningful data to business sponsors that proves real progress in reducing maintenance expenses while successfully rolling out new technologies. Without solid Project Portfolio Management, the business sponsors often perceive an increasing IT budget without results.