In April 1999, one of Capital Blue Cross’ health-care insurance plans had been in the field forthree years, but hadn’t performed as well as expected. The ratio of premiums to claimspayments wasn’t meeting historic norms. In order to revamp the product features or pricingto boost performance, the company needed to understand why it was underperforming. Thestakeholders came to the discussion already knowing they needed better extraction andanalysis of usage data in order to understand product shortcomings and recommendimprovements. After listening to input from the user teams, the stakeholders proposed threeoptions. One was to persevere with the current manual method of pulling data from flat filesvia ad hoc reports and retyping it into spreadsheets. The second option was to write a program to dynamically mine the needed data from Capital’s customer information control system(CICS). While the system was processing claims, for instance, the program would pull out up-to-the-minute data at a given point in time for users to analyze. The third alternative was to develop a decision support system to allow users to make relational queries from a data mart containing a replication of the relevant claims and customer data. Each of these alternatives was evaluated on cost, benefits, risks, and intangibles.
1. What are three costs, benefits, risks, and intangibles associated with each project?
2. Based on your answer to question 1, which project would you choose?