iValue
Develops Common Framework For Evaluating Cost/Benefits Of
Nationwide’s IT Projects
Nationwide
Insurance and Financial Services headquartered in Columbus, Ohio embarked
on an ambitious effort in 2002, dubbed “Project Valuation,” to develop a common
language for evaluating major new IT investments.
The program was initiated by Nationwide’s Chief Information Officer
Council and IT Steering Committees.
“Our
goal was to provide rigor to the process of identifying benefits and costs
for upcoming projects,” said Jack Probst, Associate Vice President of IT Process
and Governance for Nationwide. “Each
of our Nationwide subsidiaries had its own funding mechanisms and metrics
for decision-making. Without a common framework in place we could
not ensure that all relevant factors would be considered before making a major
acquisition.”
Chicago-based
iValue, an independent, multi-disciplinary consulting firm, provided the services that helped Nationwide value its enterprise-level IT investments.
“Nationwide’s
Project Valuation comprised three distinct phases,” noted Ray Trotta, iValue
partner and co-founder. “First, a
detailed interview process was held with nearly 30 Nationwide staffers and
decision-makers, which helped us understand the existing landscape. Next, iValue
principals facilitated a series of best practices workshops to identify
global procedures and metrics.
“Finally, a formal presentation to Nationwide’s IT and
financial executives enabled us to validate the evolving model with what the
stakeholders considered doable and appropriate,” Trotta said.
Concluding
its four-month effort in late July, iValue developed a comprehensive framework
of tools for corporate IT decision making, designed to accommodate a range
of situations or objectives. “The
framework included a risk model, a benefits toolkit, a repeatable process,
and a TCO (Total Cost of Ownership) checklist,” said Christopher Gardner,
iValue partner and the firm’s other co-founder.
“Together, these give Nationwide a uniform base from which to apply
its performance valuations. They also set the stage for increasing the
sophistication of the analysis over time.”
The
framework enabled the CIO Council and IT Steering Committee to show the value
of IT projects in a common way. As
Nationwide continues to review and improve its internal decision-making, Probst
and his team consider this framework to be a core process for IT project evaluation.
“All
our technology infrastructure is in place, and we have buy-in from our internal
constituents, said Probst. “Our plan
is to continue modifying the existing tools and add new ones as needed to be ready for the 2004 planning cycle, which
begins later this year.”
Probst said this
effort will ultimately give Nationwide a basis for showing the value of its
IT investments. “This framework will
be used primarily for new acquisitions. As such, it’s important that we assure all
critical factors are considered,” he noted.
“We are now more cognizant
of what factors make for good, repeatable
IT decision-making.”