The Case of the Soft Software Proposal

Topics: Artificial intelligence, Expert system, Insurance Pages: 7 (3011 words) Published: April 29, 2015
The Case of the Soft Software Proposal
By: Thomas H. Davenport, senior research associate at the Harvard Business School  
Why should Middleton fund an IS project with "intangible" benefits? But what if it doesn't?
            Middleton Mutual is a large insurance company head-quartered in Philadelphia. Its chief information officer, Dennis Devereaux, and vice president of information systems planning, Max Vargo, are about to request $1 million to develop an expert system for Linda Peterson's property and casualty (P & C) underwriting department. They've discussed the expert system with President Bill Hayes, CFO Hal Atkins, and other members of the capital expense committee and until now have felt confident it would be approved. But according to the messages in the company's electronic mailbox, the project seems less certain. Welcome to Middleton E-mail.

You have 1 new message.
To: Ddeveraux, CIO
From: Mvargo, VP, IS planning
            Finished the paperwork for expert systems underwriting program. Expected benefits are soft - intangibles like more consistent underwriting and faster turnaround - but compelling. Absent any big changes, we can get it to Capital Expense Committee for next week's meeting. Are you checking with Bill Hayes? I'll check if you want. Welcome to Middleton E-mail.

You have 1 new message.
To: WHayes, president
From: Ddevereaux, CIO
            Just wanted to confirm that we will be submitting our expert systems proposal to the CEC next week. We've pinned down the figures, and they're well within the $1 million we budgeted. We've selected a shell program from a first-rate vendor and lined up a top-notch knowledge engineering consultant who specializes in insurance applications. Two of our most experienced underwriters and eight programmers from my department will work closely with the consultant. We're excited about this program and are anxious to get started. Welcome to Middleton E-mail.

You have 1 new message.
To: Ddevereaux, CIO
From: WHayes, president
            Sorry I haven't had a chance to get to you sooner. Given last quarter's results, we're not in a position to approve any projects that don't pay for themselves almost immediately. Be sure your justification form shows concrete and immediate financial benefits. Promises of "better service" won't cut it. Welcome to Middleton E-mail.

You have 1 new message.
To: WHayes, president
From: DDevereaux, CIO
            Bill, this isn't like replacing 50 people, with a computer in the back office. How can you quantify staying in business? I thought we agreed this was the first step to get Middleton on a level IS playing field. You remember the progression: first, the expert system for multiperil, then we take it to commercial auto and workers' comp. Next we'll upgrade the mainframes and connect our databases and other systems with the expert systems. When we’re all connected, we'll be ready for our ultimate goal of letting agents analyze nsk and quote policies on the spot. If we delay, we’ll be left in the dust. I've seen it in other companies - you try to save a few dollars, and you wind up broke. Welcome to Middleton E-mail.

You have 1 new message.
To: DDevereaux, CIO
From: WHayes, president
            I’d like to see you do the project, but we need to know what the payoff is. Everything should have a number attached. If expert systems are more efficient, the committee will want to know how much more efficient. I'm just cautioning you to be straightforward about the financial implications. Welcome to Middleton E-mail.

You have 1 new message.
To: HAtkins, CFO
From: WHayes, president
            Any more thoughts on the expert systems project? Dennis may not be able to document concrete savings, but I keep looking over my shoulder at companies that are getting into this artificial intelligence business - Cigna, Travelers, USAA, Fireman's Fund. I heard about an expert system that analyzed an application and said to write...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Case of the Software Proposal Research Paper
  • Software Essay
  • Precise Software Case Analysis Essay
  • Case Study
  • Track Software Case Study Essay
  • Software R Us Training Proposal Research Paper
  • Software Assignment: Complete SSS Software In-Basket Case Essay
  • Essay about Database Software

Become a StudyMode Member

Sign Up - It's Free