“IT departments spend 25% of their time planning and 75% doing. That’s why their projects invariably go over budget and miss the mark.”

This said yesterday by a Cleveland-based CIO sitting next to me on a plane from Dallas to Cleveland. “And because they didn’t plan ruthlessly and get buy-in, they can’t say ‘No.’ when the guy upstairs comes at them with a great idea to add to the project. Then they blame budget over-runs on scope-creep. But if they had planned effectively, they could then stick to the plan, and put new items in the next Phase. Simple stuff…”

Boy, if that doesn’t say it all. I think of the project we started last Summer. At the time an MGA, sitting on top of a huge agent-distribution network for MedSupp, asked his primary carrier to Web-enable his agent-enrollment, quoting, and application process. So they hired us to spearhead the effort. Fast-forward to two weeks ago. I heard through the industry grapevine that the same MGA had recently called up another client of ours asking if they could sell their MedSupp product through their site which we built for the other client two years ago because, “We hate the site — xyz — set up for us.” So what happened between last summer and two weeks ago? Let me tell you

Unfortunately, the IT department of the parent company of our new client found out about our project a few weeks after we started design and development. Within a few days, the CIO flew down and literally threatened the president of our client company with his job — either turn over the reins of the project to us or else. Why? The CIO was on a mission to “cut costs” and “standardize” all Web development for multiple insurance brands into a single platform developed and administered by corporate IT. The CIO then called me in and said, “We’ve been bugging them for two years to let us develop this kind of functionality.” I spoke plainly, “I gotta tell you. We were told, ‘Corporate built an agent portal for us. It’s klunky, slow, and difficult to find anything.’” No wonder the client didn’t want to use corporate IT. The CIO brushed off the comments. He was a man on a mission.

So IdeaStar was moved from the mound to right-field on the project. The original scope involved agent enrollment, agent portal, MedSupp quoting and enrollment, and senior life quoting and enrollment. IdeaStar was to use existing software, proven/award-winning stuff, and customize the end-product using the client’s forms and ratings.

In comes corporate IT. “We already have the agent portal (but users say it stinks) and we built an agent enrollment solution for another product line. So all we have to do is the quote engine and you guys can to the e-app workflow.” Like I said, platooning in right-field…

So why is the high-profile MGA looking for another carrier now?

  1. Our original launch date was November 1st, in time for the massive Part D offensive. When did the finished site finally launch? February 1st or 6 months versus 3 months!
  2. What was the impact on the development cost? It’s hard to measure internal costs, but with a team of 10 different people working on the project versus our 2, one can only think the final cost was $300k+ versus our $95k estimate. But the dagger in the heart is:
  3. The single biggest distribution channel is now shifting their marketing muscle to another carrier. How much will that cost?!?!?!

Here’s the thing: Everyone knows in-house IT departments CAN build Web sites. But can they hit the mark? Can they stay on budget? Can they make the deadline? As I said before, the rare exception is Yes on all 3 counts. I’ll admit — IdeaStar isn’t perfect. But at least we’ve proven many times we can finish on-time, on-budget, and on-target.