Case Study: IT and Policy (Essay Sample)

Case Study: IT and Policy
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Case Study: IT and Policy
"Technical underwriting Financial System" (TUFS) in Northern Insurance
This paper looks into a Case Study of Northern Insurance company and the utilization of its investment in Technical Underwriting Financial System (TUFS). This system remains the largest investment by the company in terms of information technology (IT). The investment was meant to enhance efficiency and effectiveness of the company by "streamlining the underwriting process and providing strategic E-business capabilities”, hence leading to the realization of opportunities for growth. Within a short-term (2 years) after the implementation of TUFS, it has been discovered that it has become the cost-center of the organization. The company has been losing profits as its expenses are increasing steadily, an opposite and discordant trend as far as the expectations were. In addition, this is the main reason why the company’s CIO, Martin Drysdale’s Job is on the line.
In consequence of the meeting held by Mr. Drysdale and the company’s DFO, Mellissa Freeman, it emerges that there is an urgent need to come up with recommendations for turning the situation around. This is especially since the CFO is required to counsel the company’s executive committee on whether or not to put more money into the TUFS investment. It is also important to note that the total investment into the initiative so far, has not been less than $4 million, including costs to fix problems arising with the system. In light of this, the essence of the following discussion is to provide a number of recommendations to the management (executive committee) of Northern Insurance.
What went Wrong
The use of TUFS by Northern Insurance has undoubtedly failed to produce desired results as a platform for underwriting and assessing reporting functions, it has only been used for double checking functions. As far as e-business is concerned, it can be argued that the limits or potential of TUFS remain untapped. The fact that TUFS has kept on eating on the IT department’s budgets is responsible for a lag behind in upgrading the old system, the company has instead focused on maintaining and fixing constant problems of the system, most of which are due to human error. It is clear that the underwriting personnel lack training and or knowhow of handling the system.
It is clear that Northern Insurance is suffering from a state of declining profitability and increased operating cost, which can be, attributed to problems the underwriters face in using TUFS. All the same, the upgrading of the company’s operation to use TUFS is a good idea, but only if the implementation is done in a correct manner. The root cause of the problem per se, can be traced back to the fact that IT technicians in the company have no cooperation and or coordination with the underwriters. It is clear that the different departments fail to read from the same page. This comes out clearly as demonstrated by the fact that senior underwriting managers keep on insisting on receiving old reports, which require much processing, in preference to online real-time reports; they fail to realize this invaluable benefit of TUFS. As mentioned before there was hardly any cooperation or coordination between the IT and underwriting departments. This trend further extends finance department when it comes to overall designing and implementing the system to ensure it pays for operational costs via savings, an ideal plan (Bonissone et al. 2014).
The fact that the said departments in the company fail to cooperate and or coordinate implies that there is hardly any management by objectives involved in overall decision making in the firm. It is therefore important for the executive committee or company’s senior management, in unison, to note that time and opportunity are at hand. They should hence endeavor to implement and communicate change management as well as organizational structural policies to curb miscommunication and so user-related disappointments with the system. For this reason, it is noteworthy to mention that errors and problems faced by underwriters are preventable if the company’s management would have focused on curbing resistance to the TUFS system by the underwriters. More importantly, there were no provisions of undertaking change management by the company. In fact, coming up with a helpdesk has achieved little success in this regard.
What to do in future
From the information outlined above, one cannot decline to note that a review of the system is vital. If more were needed to illustrate the significance of this point, then it must be understood that the IT personnel and the underwriters as well must equally participate in making changes to the system. In addition, gaps need to be identified in terms of specific needs of the company’s underwriters required to efficiently familiarize with the system. This initiative should be approached with a keen view of resources considerations of budget and time.
Though it has fewer heralds in the case, the importance of IT planning remains an important concern. While most of the top managers agree on the limitations of TUFS, the CIO, Mr. Drysdale holds a different view. Even with cooperation and coordination between the departments, there has to be sufficient resource (human, time and capital) allocated to IT as a whole. An upgrade for the old system is very overdue since integration with TUFS would be much easier. Therefore, the company’s budget in terms of IT ought not only to focus on maintenance but also upgrades. Still, even with a small budget, it is important for the IT department to determine and focus on achieving overall organizational goals. There needs to be a clear determination, quantification and communication of the value TUFS could make the firm realize, not just to underwriters but also to all stakeholders.
Further, it would be better to disregard the e-business aspects of TUFS, at least until the employees comprehend the underwriting process fully. This will as well result in a leaner budget for training and making design changes to the system. This will also offer a systematic approach to managing the crisis facing the company. It will also enable a systematic change from the conventional mechanisms of underwriting, liberating the company and facilitating costs savings at the same time.
On the other hand, it is important to incorporate functions of system analysts (within the IT department) in redesigning, implementing and reviewing the system (Ferreira, 2014). All the same, members of the IT department should endeavor to understand both technical and business aspects of the system over the course of the abovementioned undertakings. Employing the services of analysts would also help resolve the discrepancy between the feasibility and or scope of the project and its scheduling. Important to note is that pressure of meeting strict deadlines was a major fac...