How an Insurance Company Rates Its IT Projects


The September issue of Baseline includes a quick account of AFLAC and how it determines whether to send IT work out of house or get it done internally.

A small chart (not available in the online version of the story I reference above, unfortunately) summarizes a sample decision, regarding a new customer management system the insurer was considering. The firm weighed the total project costs related to research, hardware/software, internal labor, and other expenses, then evaluated additional metrics, such as the tangible benefit, completion date and MIRR or "modified internal rate of return" (the measure of the profitability of a project). In the sample, AFLAC kept the project in-house.

A side note about the organization's approach to project decisions: CIO Jim Lester says he'd like to track projects for a year after their completion to see how close they come to meeting the original goals, financial and otherwise.


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