Expensive computerisation projects

I heard about companies spending several tens of million dollars in computerisation projects. This is far too expensive. Most of the money goes towards paying consultants to advice on workflow and customisation of system.

My friend, who worked in a large insurance company, told me that they spend more than 100 million to computerise their operations and the new computer system is still not working well. This is mind boggling. The money comes from the bonus of their policyholders!

Sometimes, I wonder if the board and top management is happy to spend so much money and if they are preapred to consider a lower cost option, if available. I believe that a large organisation can cut its computerisation budget by 50%, if they adopt a sensible approach towards computerisation. Apart from the cost savings, they will also be able to implement the new system more quickly, have less hassle and a higher chance of success.

But first, they must be keen to explore this possibility. If they prefer to spend big budget, there will always be the opportunity to make a big splash.

Tan Kin Lian