IT roadmaps support strategic opportunities for insurance carriers.
All too often, IT roadmaps become a static tool to support the technology investments of the past instead of a strategic opportunity to pave the way for the future. How many times have you heard, “Our IT department is totally focused on maintenance” or “I can’t get IT to help us compete” or “Why is IT putting in a new system when the old one already does what we want” or “I can tell you what the problem is, the (fill in the blank) business is getting all of IT’s attention.”
And then there’s the ever popular “Why does IT cost so much?”
Well, that last part is simple. It costs so much because today’s IT stands on the shoulders of its predecessors’ investments. As a rule, those systems often were not designed to beat the competition, but to meet it by providing the table stakes necessary to be relevant. When insurance carriers and brokers really want to compete and create new value, they need to spend more attention and focus on what the future holds.
It is our experience that an IT roadmap, updated annually at the least, is the best IT device for enabling an innovative business strategy and then operationalizing it. Insurance businesses can pave the way to the future with IT roadmaps.
An IT roadmap can deliver a consistent focus to business and IT leaders on key dimensions that improve future business returns:
Is what we are working on relevant to making money?
Are we executing well on technology implementation?
Can we plan for and integrate future market-leading cloud solutions?
Do we have the people and IT vendor relationships necessary to create new value?
To address whether what we are working on is relevant, there needs to be a business vision that is informed by competitive analysis. The senior leadership team has to have an understanding of how today’s software and information services innovation are being driven by cheaper computing and the increasing availability of pervasive, fast network access.
This business vision is most successful when management uses an iterative, agile method to develop it. Every answer and every insight begets new questions and then new answers—and new research. In that respect, it’s not unlike selling a complex life policy to a wealthy client or developing a global coverage program for a corporation. There is a constant tension between what is desired versus what is profitably possible. Creating a business vision is a contact sport where dialogue is the most effective means to process information and secure consensus.
Are we executing well? Building an IT roadmap requires that the management team agree on what can reasonably be staged with the resources that can be made available—now and in the future. This dialogue is tricky. It often has to be facilitated by an outside consultant or an internal leader who is not involved in daily operations. Why? Recall that IT has a significant obligation to ensure that the past is operating well today. This generally means that the majority of IT’s resources are either out of position or not yet skilled to work on what the future holds.
Meetings between business and IT leaders can devolve into talking about yesterday’s defects rather than focusing on what IT should deliver in 2020. The end result is an IT roadmap that is a simple, naïve extrapolation of the past. It isn’t about strategy, it’s about controlling for cost and quality.
Do we have the people and relationships we need? It is inevitable that a competitive insurance company is short of the skills it needs because competitive firms are stretching today’s capabilities. For example, there aren’t enough data scientists who really understand both insurance and data to meet the needs of all the insurers who aspire to improve their pricing.
This is reflected both in salaries and where they are willing to work. Critical attention has to be paid to both re-skilling onboard team members as well as making effective use of commercial solutions and service providers. Again, an iterative, agile mindset is good.
In summary, an IT roadmap is a living, breathing document. It serves as a stake in the ground for making decisions and becomes the touchstone for communicating the value of technology. An IT roadmap needs to be viewed as a strategic tool and should be reviewed throughout the year. By using this approach, the IT roadmap will help pave the way for improving the increased profitability and competitiveness of an insurer who intends to leverage what the future holds.
Check out this article in the October issue of ITA