The ROI case

The ROI case

In order to get her peers behind the replacement project, one of the first things Rusby had to do was produce a compelling business case. First came acknowledgement that the company did, indeed, need new systems to take its business forward. “We had a very strong business case,” says Rusby. After the original analysis she and her team did a high-level feasibility study and put together a framework and business case that included a lot of assumptions — but demonstrated a substantial return on investment and a certain amount of cost. Rusby went to the board and executive team with her case and said she felt that, with all the assumptions and caveats, she could get a return on the investment within two years.

Next came a request to the board for approval to invest in a more detailed analysis. That analysis, completed four to five months later, showed a further 20% in costs — a figure that did not concern Rusby too much when she could also demonstrate increased benefits.

“We still retained a very, very strong business case and expected to be getting a return on investment, a positive cash flow, within the first year after implementation. And full payback within two years.”

As always, the benefits that Rusby focused on were all about the business rather than the technology. She envisioned productivity improvements and revenue enhancements. Claims were an area where spending was highest and there was a certain amount of “leakage”. That term can cover anything from padding of the bills by suppliers to staff letting payments through when they lack adequate information about what they are actually paying for.

“We also expect benefits from the fact that we would be rationalising our product set and establishing common processes,” says Rusby. “I mean, a car policy is a car policy but currently we have products for each of those channels.” Front-end options will be packaged differently for the customer but back-end management will be rationalised to enable some savings.

“The other thing to bear in mind is that we are moving from two old systems that are running Oracle, Progress and Linc. All of that licensing and all of that hardware will disappear and we will go to a single consolidated system — and that type of environment is typically cheaper. It will deliver some benefit to my cost centre down the line. But the overwhelming benefit is for the run of business.”

Just an IT project?

Rusby knows what it is like when people describe what she is doing as managing just another IT project. She describes how, when staff would come to talk to her about IT solutions, she would stop them in their tracks and say, “What is it? It’s a business project.” They know now that there is no such things as an IT project. It’s all about the business.

In order to get to this point, however, she has had to get the entire company behind her. “I report to the CEO,” she says. “This gets me to the management table, where I can hear and understand the business issues rather than listening to people talk about the technology issues. It’s about knowing where the real challenges are and understanding that the management team knows that you understand their problems. You know, you have to become part of that team, not just a support service. I talk regularly to the managers, and I talk business issues.”

NRMA’s management team have a clear idea of where they want to take the company. Rusby sees her job as helping to facilitate their objectives. “They had a lot of vision about how they wanted to have workflow and automated processes, and they wanted to get rid of a lot of the non-value-add tasks. We applied some business targets over the top of those requirements. That’s part of leadership, to help them meet their objectives.”

As soon as any CIO gets management backing for a project, it is important for the managers to understand that they own the solution — the business solution. Rusby says that while she is the project sponsor, every person on the management team is part of the steering committee for the project. “I have unanimous support from every senior manager — from every staff member, including the CEO.”

Having everyone on board means that the entire company has an incentive to deliver the required results on time and within budget. Rusby knows that the key culprit behind blown time scales and an out-of-control budget is scope creep. She keeps everyone focused on the need to deliver.

Rusby won’t be drawn on the subject of cost. However, part of her strategy has been to conclude a $40 million outsourcing deal with Gen-i, which will manage and enhance NRMA’s IT infrastructure for the next five years.

NRMA’s network is made up of 1250 desktops with two Citrix server farms, a nationwide ATM and frame-relay network and 90 infrastructure and application servers centralised at two high-security data centres. The infrastructure includes disaster recovery with automated fail-over of key systems.

Rusby says the contract includes the transition of NRMA’s current in-house support team to work directly for Gen-i. It’s all about her ongoing focus: it’s the solution, not the technology, that matters.

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