Insurers Move Warily Beyond the Waterfall
Insurance Networking News, February 1, 2009
Now, however, project managers within insurance companies are finally giving agile development methods, such as Scrum, PRINCE2 and others, a look. As a result, IT departments long accustomed to sequential development are being warned to tread carefully as they enter these new waters.
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The reasons underpinning failed or budget-busting projects are as varied as the insurance companies that undertook them. Yet, generally, much of the blame tends to emanate from one of two sources: insurers ignoring or misapplying development methodologies, and insurers failing to adequately reconcile the project at hand with the underlying business need.
"For a long time, insurance companies have not been disciplined on the IT or business side about doing projects," says Mike Fitzgerald, senior analyst at Boston-based Celent, acknowledging things are improving in this regard. "In the last 10 years, the insurance industry has done better at taking an engineering-type approach, rather than just smart people doing good work."
Identifying and adhering to the proper methodology can help insurers avoid the time, cost and resource implications of badly run projects, says Rachel Alt-Simmons, research director in the insurance practice at Needham, Mass.-based TowerGroup Inc. "What's really changed over the last few years is that companies have recognized the value that process and discipline bring."
OVER THE WATERFALL
While the predominant methodology in project management has been the waterfall, or sequential method, agile methodologies first seen in software development are beginning to take hold.
In a waterfall project, members of the IT development team query business users at length over requirements, and then depart to build out the solution. Traditionally, this method has proven effective, but it runs the risk that when the project nears its end, certain components will not work together or, worse still, will not meet the current needs of the business, which may have shifted during the development process. "Nobody wants to work on a project that doesn't help the business - that's not anyone's goal," Fitzgerald says, adding that in a large organization, it may end up happening.
"There's a realization the traditional view of IT project execution where the IT teams sits back and interviews colleagues from sister functions to determine requirements, then IT goes off and builds it, flat out doesn't work anymore," says Mike McGarry, CTO of Richmond, Va.-based Genworth Financial Inc.
Alt-Simmons agrees that waterfall methodologies can often exacerbate the gulf between IT and the business. "The business often doesn't clearly articulate what the project requirements are," she says. "The IT department doesn't know what questions to ask."
GETTING AGILE
Conversely, agile development methodologies are designed to break deliverables into smaller chunks. Development sprints run concurrently and can last as little as a day. This incremental approach keeps business users more actively involved in the project, and development goals more closely aligned with ever-fluctuating business objectives.
Examples of agile methodology include Scrum and PRINCE2 (PRojects IN Controlled Environments), which organize project teams illustrative of agile development as a whole.
Scrum roles are divided into two primary roles, pigs and chickens. Pigs are employees, from both the IT and business side, who are primarily responsible for the success of a given project, while chickens are end users, managers and other stakeholders. The names are derived from a joke about a ham and eggs breakfast: whereas the chicken is merely involved in the offering, the pig is fully committed.
The cross-disciplinary nature of Scrum teams may go a long way to alleviating misalignment between IT and the business side. The constant contact demanded for agile development ensures that technologists keep business objects firmly in mind, while business users are afforded a better sense of what the technology can actually deliver.
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