The Technical Underwriting Financial System (TUFS) was said to the largest sole investment project in IT ever completed by Northern Insurance, and it had planned in the transformation for Northern by restructuring the underwriting processes and offering strategic e-business competencies. As per the case study, it can be seen that the TUFS was consuming huge amounts of Northern’s IT budget and resources to solve the underwriting errors that kept occurring. To the CIO’s opinion, the system hasn’t been meeting the basic underwriting needs and it didn’t get a considerable contribution from the underwriters. He mentions that due very tight deadline his team had to defer some of the functionality they had originally intended to include. These extras were gradually reducing at the system’s profits.
As the TUFS was consuming large portions of IT budget, budget execution is very important. Budget execution demands for adapting the execution of the budget to significant changes in the macroeconomic environment, resolving problems arising during implementation; and managing the purchase and use of resources efficiently and effectively. Challenges such as underspending, as well as overruns, is related to insufficiencies in budget preparation and program preparation.
An overestimated budget and unrealistic projections of revenues lead to remaking the budget during budget execution. Most corporations reflect the people in responsibility. If the top is unsystematic, drained, and dispirited, then so is the rest of the operation. Also, the law of entropy ensures that all organizations tend to run down over time and want a periodic transformation.
And, like everything else, such transformation has to start at the top management. Martin (CIO) first needs to ask himself some solid questions. When was the last time he got everybody together to communicate his idea of the company, where it was going, and where it desired to shift resources? Is he good at two-way communication, listening as well as talking? Or has he become so wrapped up in regular activities that he doesn’t have a while to pay close attention to the requirements of the users?Thus, Martin needs to understand the role he plays in setting the agenda and the attitudes of the entire organization. Once he’s dealt with his own role in creating this problem, then he can address the attitudes and participation of others.
The retrospective descriptive study needs to be performed by analyzing what went wrong in the past actions and implementing solutions through proper planning which can make the project succeed in future. TUFS project should create short targets and review the work done. In order to fix the cost savings issue, sound budget estimation along with proper resource allocation is essential.