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By PATRICIA VOWINKEL, who has worked for national media outlets for more than 20 years

A risk management information system (RMIS) can run tens to even hundreds of thousands of dollars depending on the size of the organization. For most risk management departments, it is one of the most expensive items in the budget after insurance purchases.

For some risk managers, disappointment with previous systems keeps them from stepping forward and asking senior management for a new RMIS. It's one thing if a system has met expectations, but if not, no one wants to have to admit that they were the one responsible for the purchase of a lemon.

Even if they were not burned in the past, some worry about what move to make next. That can lead to paralysis, and so some risk managers resolve to just stick it out another year and make do with what they've got.

"A lot of folks hold on to their old systems a long time," said David Tweedy, practice leader of Albert Risk Management Consultants risk information consulting practice. "There's still some DOS system out there. I kid you not. I've seen them. There's still some green screens systems out there. It brings you back to the late 1980s at least."

But there is a way forward. It turns out that most of the time, when there's a problem, it's not the fault of the RMIS itself. Instead it's because of poor planning, Tweedy said.

Most of the problems in system selection come down to poor planning and execution of the needs assessment. In other words, if they don't know what they want, they'll never get it.

Part of the challenge in planning for a new RMIS is that so many of the business processes that currently exist have developed over the years as a result of the parameters and limitations of the older systems.

As new systems emerge with new capabilities and fewer limitations, it can be hard for buyers to even imagine what they can ask of the new system. It forces buyers to have to think, and think hard, about how they want to do business and what the best business process might be.

"That is where they drop the ball," Tweedy said. "They don't think that one through properly. They're so busy doing their jobs that they don't do the upfront thinking."

Buyers may have a vague idea of what they would like their RMIS to do, but if they are not specific, that leaves the vendors with too much latitude. Without a clearer picture of what the buyer wants, the vendor thinks one thing when the buyer wants something else entirely.

That's why it's important for clients to have an upfront needs assessment with the vendor. "The No. 1 reason that systems fail is not necessarily because the system is bad," Tweedy said. "It's because the planning and the configuration and installation of the system was not done properly

"The system didn't fail, you failed," Tweedy said.

September 1, 2010

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