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I'm more likely to stash my money in a nice, safe money market fund where it can earn a dependable, if boring, 3 percent.

In the IT world, however, replacing outdated legacy systems can seem a lot like playing the roulette wheel at Las Vegas. You put your money down, spin the wheel, and hope for the best.

At least if you are in Vegas and you lose it all, you still might get an all-you-can-eat surf and turf dinner and a show out of the deal.

With the downturn in the economy, no one is in the mood for taking big investment risks these days. And yet certain projects are unavoidable.

Although there's always going to be an element of risk involved in any technology investment, there are some secrets to beating the odds.

Jeff Goldberg, a senior analyst at IT consulting firm Celent, has reviewed about 50 submissions as part of the firm's 2009 annual Model Carrier project and says the insurers with successful technology projects have a few things in common.

One of the most important factors is that the winners had a clear idea of what they were hoping to accomplish with the project and then did a good job of mining data to figure out where the problems were and how to fix them.

Most insurers, it seems, do a great job of mining data when it comes to their insurance operations but somehow drop the ball when it comes to their IT projects.

It's surprising that companies that measure everything in sight through actuarial analysis, computer models and the like, fail to measure enough on their IT projects.

But clearly projects fail and this is one reason. The objectives are too broad, too vague ? there's a lack of specificity and a lack of concrete data to show exactly what needs to be done to fix the problem.

BRING THE BRASS ON BOARD

Another key factor for a successful project: Get buy-in from both senior executives as well as the eventual end users.

Chief executives are quick to want to pass the buck on big IT decisions, deferring to their CIOs so they can maintain plausible deniability. For their part, IT executives forget to do a reality check with the end users and charge ahead with doomed projects. The moral: Projects fail if they executives won't support them and end-users don't like them.

And finally, it's the carrier's responsibility to lead the way--not the vendor's. Companies spend a lot of time worrying about whether they've got the right vendors and IT experts on the job. But a dozen of the best Java developers can be a curse, not a blessing, if the company doesn't have a clue where it's going with the project.

There's no easy money answers here. But technology investments can be a little less of a crapshoot if you have clear objectives, good supporting data, get buy-in from senior executives and the end users, and avoid relying on the vendors for all the answers.

PATRICIA VOWINKEL has worked for national media outlets for more than 20 years.

March 3, 2009

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