iValue Develops Common Framework For Evaluating Cost/Benefits Of Nationwide’s IT Projects
Nationwide Insurance and Financial Services headquartered in Columbus, Ohio embarked on an ambitious effort in 2002, dubbed “Project Valuation,” to develop a common language for evaluating major new IT investments. The program was initiated by Nationwide’s Chief Information Officer Council and IT Steering Committees.
“Our goal was to provide rigor to the process of identifying benefits and costs for upcoming projects,” said Jack Probst, Associate Vice President of IT Process and Governance for Nationwide. “Each of our Nationwide subsidiaries had its own funding mechanisms and metrics for decision-making. Without a common framework in place we could not ensure that all relevant factors would be considered before making a major acquisition.”
Chicago-based iValue, an independent, multi-disciplinary consulting firm, provided the services that helped Nationwide value its enterprise-level IT investments.
“Nationwide’s Project Valuation comprised three distinct phases,” noted Ray Trotta, iValue partner and co-founder. “First, a detailed interview process was held with nearly 30 Nationwide staffers and decision-makers, which helped us understand the existing landscape. Next, iValue principals facilitated a series of best practices workshops to identify global procedures and metrics.
“Finally, a formal presentation to Nationwide’s IT and financial executives enabled us to validate the evolving model with what the stakeholders considered doable and appropriate,” Trotta said.
Concluding its four-month effort in late July, iValue developed a comprehensive framework of tools for corporate IT decision making, designed to accommodate a range of situations or objectives. “The framework included a risk model, a benefits toolkit, a repeatable process, and a TCO (Total Cost of Ownership) checklist,” said Christopher Gardner, iValue partner and the firm’s other co-founder. “Together, these give Nationwide a uniform base from which to apply its performance valuations. They also set the stage for increasing the sophistication of the analysis over time.”
The framework enabled the CIO Council and IT Steering Committee to show the value of IT projects in a common way. As Nationwide continues to review and improve its internal decision-making, Probst and his team consider this framework to be a core process for IT project evaluation.
“All our technology infrastructure is in place, and we have buy-in from our internal constituents, said Probst. “Our plan is to continue modifying the existing tools and add new ones as needed to be ready for the 2004 planning cycle, which begins later this year.”
Probst said this effort will ultimately give Nationwide a basis for showing the value of its IT investments. “This framework will be used primarily for new acquisitions. As such, it’s important that we assure all critical factors are considered,” he noted. “We are now more cognizant of what factors make for good, repeatable IT decision-making.”