Innovation is a hot topic in insurance, and that's a good thing. It's refreshing that a growing number of insurers recognize the need for transformation and are taking seriously the requirement to infuse the ability to innovate into their organizations. The impetus to innovate is affecting everything from distribution strategies to policyholder interactions to claims handling. It's reflected in insurers' accelerating embrace of the cloud as the platform for mission-critical projects and the focus on core systems transformation to improve customer experience -- the focus of articles in Insurance & Technology's most recent digital issue.
[Insurers should turn down the hype about innovation so CIOs can concentrate on what the best have done throughout their careers – getting things done that add value to their organizations, urges X by 2's Frank Petersmark: What's So Innovative about Innovation?]
But regardless of the sincerity behind these initiatives, they cannot succeed without effective implementation or execution. How many high-profile projects fizzle out or fail due to poor execution? Execution is the hard process of making something work, and all the vision and passion in the world doesn't matter if meaningful results can't be delivered. It's ironic that with all the advances in technology around open and modular systems, automation, digitization, collaboration, and mobility, technology implementation hasn't gotten any easier than it was 10 or 20 years ago. If anything, it has become harder -- or at least more complicated. That's partly because a growing number of technology projects are being led by business units. According to a recent CEB Research study "Business executives now spend an additional $0.40 on technology for every $1 managed in the traditional corporate IT budget... [and] more than 70% of executives are now willing to run their own technology projects."
[Do you think IT can be a primary source of advantage or do you believe that great IT is just table-stakes in an increasingly technology-driven world. Join the discusssion at the Interop New York panel that will debate Is Great IT a Competitive Advantage or an Equalizing Commodity? on Thursday, Oct. 2.]
Implementation challenges can't be blamed (entirely) on tech-empowered line-of-business executives. Nor can they be assigned to technology vendors (although sometimes new systems are not up to the job) or budget constraints (which, of course, can be a legitimate issue). As Novarica managing director Matt Josefowicz put it at the analyst firm's recent Impact Awards event, insurance IT strategy is influenced by three dynamics: change, legacy, and disparity, all factoring into "a period of tremendous change across the industry." It's imperative to "re-evaluate everything," Josefowicz said. "There are lots of things we do because we used to have to do them that we don't have to do anymore," which calls for "re-evaluation of product, distribution, and service strategies." The projects represented among the Impact Awards finalists and winners, he noted, share common themes -- clear articulation of expected business value, consistent executive sponsorship, consistent and frequent communication during the project, clear use of success metrics, and close coordination with vendors.
Successful execution depends on a dynamic mix of leadership, process, resources, partnerships, technology, and business case -- which helps carriers reach the implementation goal even when obstacles arise.
These kinds of challenges -- and how resolution of them is critical to insurers becoming more agile, responsive and competitive -- will be the focus of Insurance & Technology's upcoming Executive Summit, November 9 through November 11, 2014, at the St. Regis Bal Harbour in Florida). With a keynote session featuring Brian LeClaire, CIO at health insurer Humana focusing on How to Be a Winner in the New Competitive Environment, and presentations from other top insurersincluding Lincoln Financial Group, Oregon Mutual Insurance, Zurich North America and Millers Mutual Group, Executive Summit attendees will gain timely and exclusive insights into what it takes to become an agile insurer. For more information and to register, please visit the Executive Summit website.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio