During the 1990s, spending on IT, both in insurance and in general, grew steadily. Since 2000, however, the trend has been toward flat or declining budgets. Many valid reasons have been offered for the slowdowna weak economy, concerns about terrorism, the bursting of the dot-com bubble, and the end of Y2K-inspired spending.

There is another factor that has not been given enough attentionmanagement has lost some of its faith in the ability of IT to deliver reliably worthwhile results. In this case, the pain is self-inflictedIT projects have earned a poor reputation by failing too often to meet expectations.

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