Client’s challenge
The CFO and the head of IT applications for one of the largest non-profit U.S. health insurance providers wanted a better approach to IT management. Most top executives in the company—especially those responsible for sustaining its core revenue stream—were chronically dissatisfied with IT’s performance. From an IT perspective, it wasn’t just that the IT organization never seemed to have enough resources to address the needs of the business; it was also that the group had trouble explaining to business executives why delivering IT services took so long.
PricewaterhouseCoopers Advisory solution
Tasked with uncovering the roots of the problem, PricewaterhouseCoopers (PwC) Advisory quickly confirmed that the company’s oversight and management over IT spend and project prioritization was stronger in name than in function. Interviews conducted separately with key business and IT managers revealed telling gaps between what the IT organization thought it was doing on behalf of the business and what the business entities believed IT was accomplishing.
PwC Advisory’s inquiry uncovered other symptoms of IT inefficiency. While the company’s business and IT executives collaborated regularly in a formal review of proposed IT projects, this planning exercise was conducted only once a year during the annual budgeting process. Moreover, funds approved for specific projects were often diverted to support IT needs that flared up unexpectedly.
At the center of many of these issues, PwC discovered, were two systemic problems. First, beyond the company’s infrequent focus on IT projects, it had no capability in place to manage the majority of IT spend dedicated to covering ongoing IT maintenance costs—and by extension no ability to manage total IT spend.
The second problem was that the business units lacked ownership of the IT projects and therefore—unaware of resource constraints and the frequent need to reprioritize projects—placed the blame at the threshold of the IT organization when IT projects went awry. These findings led PwC to recommend that the company develop and implement total IT spend and project management capabilities without delay.
Impact on client’s business
The CFO and the head of IT applications used these findings to hasten the implementation of a more formal IT governance and project management process. Welcomed at the highest levels of the company, this critical step improved the overall confidence of the executive management team in the IT organization’s ability to help the company meet its business objectives.
