Saturday, May 22, 2010

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


Anonymous said...

It is alright for insurance companies
because it is not their money but the policyholders', mah.

Anonymous said...

What is tens of millions when they have billions?

There is one Japanese restaurant at the RWS. Their menu has only 3 sets of prices, $300, $450 and $750.

Obviously these cater to those so rich that such prices are like $30 or $40 to folks like me.

Similarly for those sovereign wealth funds, including Singapore's, losing a few billions must be seen in the perspective of the hundreds of billions that are still there and safe. Of course the citizens see it differently and may even be angry.

Parka said...

They should hire consultants who are specialized in hiring value-for-money consultants.

Anonymous said...

If you are senior management, who would you rather trust?

a) a $100 million dollar IT system set up by a big name consultant firm


b) your own staff

If senior managers depended on their staff, it means the staff is in control. And you will have to pay and treat them well.

It's never about the money or cost. It's all about power and control.

Another example.

I'm a CEO. I overpay my senior managers with million dollar salaries. Where are their loyalties? To the shareholders/citizens or to me?

Anonymous said...

pay them well to do your bidding.
give the agents high commission adn they will do for you anything, from lying to cheating.Money is power.

Anonymous said...

to anon 10.54pm,

You have given me the answer to be a consultant.


I will try to join a consulting firm.

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