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SYSTEMS DEPARTMENT CAN BE A STRONG ALLY

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SANTA MONICA, Calif.-Not long after The Walt Disney Co. purchased an early-model, computerized safety tracking system in 1984, the system's vendor quit the business.

That was discovered when installation troubles ensued and a telephone call for assistance revealed that the vendor had decided to sell avocados instead of safety software, said Tim East, risk manager-business process for The Walt Disney Co. in Burbank, Calif.

"And then she had the gall to ask me who Disney bought its avocados from," he recalled during Business Insurance's Fifth Annual Workers Compensation Conference, held in Santa Monica, Calif., last month.

As a result of that experience, Mr. East said he thinks it is important that risk managers establish strong alliances with their corporate information systems departments.

An information systems department can help evaluate a risk management information system's quality and its compatibility with other company software and hardware, Mr. East said. That type of bond between Disney's information systems and risk management departments didn't exist when the company purchased the safety system in 1984 and during its subsequent problems.

"So now the information systems manager, who is responsible for corporate and treasury functions, is my business partner," Mr. East said. "He owns as much of the responsibility for the success of our claims system and our corporate risk management information system as I do. We have a strong partnership."

Risk managers who attempt to go it alone, installing systems without the appropriate help "are going to be in trouble," Mr. East said. Additionally, he noted that business trends point to more horizontal integration within a corporation, so that risk management increasingly will be working as a team with other departments, such as information systems.

Another RMIS belief of Mr. East's-one he said he is passionate about-is that risk managers must build partnerships with risk management information system vendors.

Make the vendors team members so that they help the risk management department solve its problems and reach its goals, he said.

"We don't buy a system, say goodbye to the vendor, and then just call them when there is something wrong," Mr. East explained. Instead of just calling the vendor when a crisis arises, Disney enlists the vendor's help whenever necessary to meet its objectives or solve longer-range problems.

Following or exceeding a vendor's hardware and software requirements is another issue Mr. East said he is passionate about.

"Not that we have always done this," he said. "But it is our goal, and we do it now because we have learned that you really need to work their product on the platform that they designed it to work on."

A vendor's hardware and software requirements may not match those that an information system department approves for use within the corporation, Mr. East said. So risk managers may have to work with the information systems department to develop a strategy on how to make the two fit.

Finding a solution is an issue the risk manager may need to be firm about when information systems personnel say the RMIS is incompatible with the company's system, according to Mr. East.

"But there are some things you have to be flexible on, and I really encourage you to push back and say, 'Why can't we go with the vendor's preferred configuration, because it's going to save you a lot of trouble?' "

Mr. East also advises providing RMIS vendors access to your computer system so they can properly service and support their product.

That can be a scary prospect for some managers within a company because of security concerns, Mr. East said. It may also become a battle that risk management has to fight with the information systems department, he added.

However, he said, if a vendor does not have that access, it can only guess what the problems and solutions might be when system problems arise.

"There are security systems that can monitor (vendor) activity and watch where they go (within the system) and what they do," Mr. East said. "I think you can overcome the problem."

When negotiating for a new risk management information system, buyers should make system speed a priority equal to performance and functionality.

When vendors demonstrate their models, they often explain that the one you purchase will be faster if their demonstration system is slow, Mr. East said.

Or, if the presentation of a system is really fast, it may be because the vendor is using a server built into its demonstration model; that may not be the case with the one they sell you.

So don't sign a contract until establishing exactly how fast the RMIS will be when it is set up with your configuration, in your office and with the platform you have agreed on, he advised.

"When we have had concerns with this, we have signed temporary agreements where we can actually test the system in our configuration before we make the final purchase," Mr. East said. "Speed is really important, because despite all the things that is does, if it does them slowly, my people are not going to use it. They are just going to walk away from it and ignore it."

Michelle T. DeLizio, president of Costa Mesa Calif.-based CompReview, and Scott Lund, marketing president for SAC 3 in Huntsville, Ala., joined Mr. East.

David P. Duden, national RMIS practice leader for Deloitte & Touche L.L.P. in Hartford, Conn., moderated the session.