�by Peter Symons, Managing Partner, OARBIC
Why would any IT Manager (Director, VP) hire a consultant over a full time employee?
On the surface it looks like an expensive way of supplementing resources, a need possibly born out of not enough forward planning.
In reality however, it can be the exact opposite, hiring consultants for specific, targeted, cost justified tasks is an excellent way of managing consistent and predictable staff levels
Work in many insurance companies� IT shops can usually be divided into three types:
Support the Base: Often known as maintenance, keeping the systems we currently have running.
Mandatory: Updating the systems we have with mandatory changes such as legislative requirements, rate changes etc.
Discretionary projects. Those projects that will bring efficiency and market advantage to the company
Many times, insurance companies� IT shops have more work than they can execute in any given year. Generally speaking, the work associated with the first two categories has to be done, which, unfortunately, leaves the discretionary projects, those projects that will improve the company bottom line and improve the company�s competitive position, the last projects to get resourced. And, often times, when the department runs out of resources the IT Manager has to tell the CEO that those projects are going to have to be shelved until �next year�.
But there is another answer, with the use of the management techniques of Portfolio Management and Demand Planning, and the judicious use of consultants; there is an alternative to having to tell the CEO that the projects that will help the company the most have to be shelved.
To ensure their insurance company is getting its best value for IT dollar, many savvy IT Managers practice both Portfolio Management and Demand Planning. Portfolio Management is a technique of subjectively analyzing all possible discretionary work and measuring each project�s cost and value against the corporation�s stated strategic direction. Once each project is ranked, it becomes relatively easy to see which project is most important, which project is the next most important and so on.
Once you understand the relative rankings of each project, then matching and scheduling each project against your available resource pool is the act of Demand Planning. Demand Planning allows you to see how your �supply� (available resources) matches your �demand� (resource requirements).
Demand Planning allows you to smooth the hills and valleys of resource deployment, consider the following graph:
This graph shows both the staffing level and the Demand Planning profile for an insurance company�s IT Department. The graph shows the work load for three discretionary, but important projects that are to be executed this year; Projects �A� �B� and �C�. Each project has had a business case developed for it and each project strongly supports the company�s strategic vision. And, best of all, the CEO is very keen on having all three projects completed by the end of this year and has tied your bonus to the successful completion of the projects, of course, without any permanent increase in head count!
The basic problems with the picture the graph shows are:
There are times throughout the year where there is more work than available staff and other times when not all the staff will be utilized, plus,
Overall, there is more work that staff.
One option is to hire more staff to ensure that all three projects get completed in the year, but the need for the extra staff is temporary and is only present while the three projects are being executed and anyway, hiring them will put your bonus in jeopardy.
An alternate answer is to do two things:
Spread the work out such that the peaks of demand are reduced and the valleys are filled in with work. In the following graph, the work has been spread out as much as possible. Project �B� is now to be executed with fewer staff over more elapsed months. Even though Project �B� will take longer (albeit with the same number of person months) it will still be completed this year
Engage a consulting company, with the necessary in-depth skills of your system, to supplement your team on a short term basis to manage the remaining �peaks� in Demand
Having done both these things, the Demand Planning graph now looks like this like this
The end result, all three projects will be completed in the year, the number of full time staff remains constant, the consultant�s expenses can be justified within the project business case and you�ll be promoted to that corner office you always wanted.
Portfolio Management, Demand Planning and the appropriate use of Consultants help you plan your year and ensure the right projects get done in the right timeframe.
Any you thought I was kidding about consultants being good for IT Manager�s careers.
Managing Partner, OARBIC.
OARBIC Inc. is a specialized IT consulting firm helping the property and casualty insurance industry make older systems behave like new ones – and new ones behave the way they should.
We offer an array of consulting services, plus our OSEA software solution is specifically designed to extend the life of legacy applications to allow them to keep pace with change.
Our in-depth knowledge of the property and casualty insurance industry and our access to a global network of talented, specialized IT professionals, sets us apart from other consulting companies.