RMIS-Web Risk & Insurance RMIS Article

"RMIS/Technology Column: Getting out of the Box"

by David P. Duden

April 1999

Risk management information systems (RMIS) development has never been an effort that many organizations would take on all by themselves. And yet today there are many tools that would appear to make that task easier than ever. The illusion created by a graphical user interface (GUI) that systems were becoming easier to use has contributed greatly to this idea. I am still searching for the systems implementor that believes client/server is easier to install and support. The fact is that these systems are far more complex to develop and install, especially for an organization that grew up on older, perhaps simpler technology.

But wait, the new Web technology seems to have taken us back to the older minals, we have surfers and browsers. Now that sounds more “user friendly.” The development of these RMIS tools and the deployment of these new systems must certainly be easier.

Or is it?

I think at times we become too focused on the technology and not the underlying functionality required for the RMIS users. Large insurance carriers and large third-party administrators and even large self-insureds certainly have the resources to develop RMIS. But resources are not the only issue. I think it is a great compliment to the organizations that go outside of their own development group to meet customer needs. It can also mean a competitive advantage for them because of greater speed in their development effort. The issues of skill sets required, available resources, new tools and technology and, of course, cost can lead to the outsourcing decision.

There are many current examples of organizations going outside their own development group. There are an equal number of reasons for this. Many software providers have continued to form strategic alliances to meet customer needs, but now these alliances are also being formed by large organizations to meet customer requirements.

Internal partnerships between information services (IS) and the risk management department can also be a critical success factor. At Wausau Insurance Cos., the organizational structure supports the linkage between these partners. “Obviously we would like to control strategic projects but a triad of resources is usually the approach,” states Jim Pimler, assistant vice president, information services for Wausau. “The team of business specialists, IS professionals, and our vendor partners provide the cross-functional perspective required by projects,” he adds.

In talking with Jeff Hoffman, assistant vice president from Chubb Insurance Group, the issue of going outside was more an issue of focus. “Insurance companies in general must focus on their core operational software, quoting, policy issuance, invoicing, claim payment. Clients are demanding different functions, such as more analytical tools that require a different focus than operational software,” he continued. Indeed, the data structures for data warehousing and data mining are far different from a transactional database.

Web-based tools also require a different perspective from a development perspective. Wausau has developed new Web-based claim reporting capabilities (Rapid Reports) with the help of Walker, West, Wong and Axim Inc., a Boston-based Web developer.

“Speed was the issue for us,” according to Tom Drake, vice president at Wausau. “We needed to supplement our team with a group that has created these type of products already,” he added. They expect to be operational soon. The first report capability will be part of Horizon, which contains a vast array of leading edge, Web-based services.

The bottom line of both of these developments is that the “we can build it here” attitude within large organizations and even smaller companies has been replaced with a strong customer focus. Customer-driven RMIS development using the necessary resources regardless of where they come from can benefit all of us.

David P. Duden is national RMIS practice leader for Deloitte & Touche LLP in Hartford, Conn.