If I Only Had the Nerve: Helping Insurance CIOs Manage Expectations

Economic recovery and increases in insurance IT spending put a lot of pressure on CIOs to make up for lost time.

I’d be brave as a blizzard… I’d be gentle as a lizard… I’d be clever as a gizzard… If I only had the nerve...

As the above lyrics from The Wizard of Oz attest, the life of an insurance industry CIO is a precarious one at best, and one where it can often be difficult to strike the right tone between optimist and realist. The continuing economic recovery, and the corresponding increases in IT spending in the industry, puts a lot of pressure on CIOs to make up for lost time, and the temptation is to try to over-deliver. The trail of CIO tears is strewn with those whose eyes were bigger than their ability to deliver, and many a promising CIO career has been dashed by such overzealousness. The problem is that while the appetite for technology has begun to change in the industry, the fundamentals required to successfully execute and implement enterprise scale IT initiatives has not, and in fact may have increased in magnitudes of difficulty over the past few years.

Frank Petersmark, X by 2

The reasons for this are many, but for starters, many of these systems pose massive integration challenges for most insurers. The kinds of skills required to accomplish these integrations are in short supply in most insurance IT divisions, and many of the newer vendors to the space have wisely stayed away from offering integration or even implementation services, instead focusing on advancing their product's capabilities. That leaves many insurers at the mercy of third party integrators and implementers whose business models don't necessarily align with the effective and efficient implementation of these systems.

Another reason that implementing pent up IT initiatives may prove more difficult is a fairly simple one, but nevertheless true – they have not done it in a while. Many insurance IT divisions have been in 'maintenance mode' the past few years, and are therefore a little out of practice when it comes to the high pressure stakes of implementing complex software platforms. In truth, many insurers struggled with this before the economic lull, and those struggles have not been somehow magically remedied now that insurers are ready to put the pedal to the metal.

These roadblocks and more lead to the current state of precariousness for insurance CIOs. While the temptation is to race full speed ahead, such an approach could lead to the career damaging spiral of over promising and under delivering. That is why it is more important than ever for insurance CIOs to take a breath and focus on the one thing that continues to be more important than anything else – courageous leadership. And what is courageous leadership in the context of the job of an insurance CIO? Let's keep the definition simple – it is the courage to say what is and is not possible, how long it will (really) take and how much it will (really) cost, and what is (really) required of their business partners in terms of resources and commitment.

[Check out this session: IT Is Your Business, Run It Like One at Interop, which runs from September 30 through October 4 in NYC.]

Given all the pressures that CIOs are under to deliver, that is much easier said than done. But in the long run, it may be the best thing for the organization and for the CIO charged with delivering.

So as the song goes...

About the author: Frank Petersmark is the CIO Advocate at X by 2, a technology consulting company in Farmington Hills, Mich., specializing in software and data architecture and transformation projects for the insurance industry. As CIO Advocate, he travels the country meeting CIOs and other senior IT and business executives at insurers, learning about their goals and frustrations, sharing lessons learned, and offering strategic counsel. Formerly VP of IT and CIO at Amerisure Mutual Insurance Company, Frank has more 30 years' experience as an information technology professional and executive. Widely published and quoted, Frank has spoken at American Association of Insurance Services, Society for Information Management meetings, and various CIO and industry conferences. He can be reached at [email protected].