In the last economic downturn, cost cutting was rampant. Today,although companies are holding fast to their purse strings,business is showing more of a focus on value. Several reasons mayaccount for this, including: alignment of business and ITlegitimizes the costs; real needs don't disappear in tougher times;attitudes about IT as a business enabler have strengthened;spending deemed strategic is permissible, if not encouraged; or(hopefully not) the worst hasn't hit us yet.

Despite the recent spate of financial hurdles, companies need toachieve profitability, and regardless of what that requiresspecifically, all roads lead back to IT. According to an AugustGartner report, the insurance sector actually is trending a bitupward despite problems at some carriers and the soft P&Cmarket. “Looking ahead, the insurance sector demonstrates newawareness of the innovative possibilities related to IT. Innovativebusiness goals range from wealth management initiatives in the lifeand disability sector to more disciplined product life cyclemanagement in the property and casualty sector,” predictsGartner.

Nevertheless, with budgets largely holding flat, insurers, likeconsumers, face the challenge of trying to buy what they needwithin budget constraints. While always important, effective vendormanagement becomes critical when dollars are tight (for more, see“The Perfect Blend,” p. 12). In these times, the “relationship”weighs in on one side of the scale, but value for dollars spentweighs heavily on the other.

That said, negotiating with more than one vendor and lettingthem know you're doing it, or starting small to keep the cost down,or periodically reviewing budgets with a vendor all make sense.Asking a vendor how it might optimize project costs or envisioningwhat a project ought to be and scaling it down without losing theessentials enlists both the vendor's and the carrier'screativity–and spotlights which vendors are your true partners andnot the fair weather kind.

Another common sense strategy is to network either face to faceor online. For example, if you visit our Web site(www.tech-decisions.com), you can access our archived onlineconference, “Facing the Future of Insurance,” which just wasWebcast.

Also, share your preferences in the Insurer's Choice technologyranking (www.financial-insights.com/insurerschoice), a survey takenby Financial Insights, an IDC company, in partnership with TechDecisions. Not surprisingly, the more input regarding whichsolution providers are most important to you, the more valuablethis tool will be for all–as in the coming presidential election,every vote counts! Check it out–the polls are now open!