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 may account for this, including: alignment of business and IT legitimizes 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 to achieve profitability, and regardless of what that requires specifically, all roads lead back to IT. According to an August Gartner report, the insurance sector actually is trending a bit upward despite problems at some carriers and the soft P&C market. “Looking ahead, the insurance sector demonstrates new awareness of the innovative possibilities related to IT. Innovative business goals range from wealth management initiatives in the life and disability sector to more disciplined product life cycle management in the property and casualty sector,” predicts Gartner.

Nevertheless, with budgets largely holding flat, insurers, like consumers, face the challenge of trying to buy what they need within budget constraints. While always important, effective vendor management 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 spent weighs heavily on the other.

That said, negotiating with more than one vendor and letting them 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 envisioning what a project ought to be and scaling it down without losing the essentials enlists both the vendor's and the carrier's creativity–and spotlights which vendors are your true partners and not the fair weather kind.

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

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