Insurance CIOs: How to Be Secure and Profitable in the Cloud

Many insurers remain cautious about cloud-based capabilities. But many are enjoying the undeniable benefits of externally hosted software through appropriate control and security measures.
September 07, 2012

Look for an Exit

Richard Wiedenbeck (pictured right)
VP, IT, Ameritas (Lincoln, Neb.)

While cloud-based solutions offer many advantages, they also create additional areas of management attention:

Application Management -- Cloud-based solutions must be managed the same as any other business application, complete with service-level agreements and an understanding of application lifecycle and business requirements for modifications/enhancements.

Vendor Management -- Management of cloud vendors on both a technical and a business level is critical.

Understanding TCO -- Understandng total cost of ownership requires looking at the application over, say, a 10-year period. The numbers for cloud solutions look great compared to a three-year amortization schedule for a software purchase, but cloud solution costs are ongoing for as long as the application is in use.

The biggest concern over moving to a cloud-based system (which is similar with IT outsourcing) is having an "exit strategy" and path for getting back home if the relationship does not work out. For the life and annuities industry, core systems administration is not likely to move to the cloud in the next five years. But cloud solutions will continue to grow for non-core admin capabilities. Sales management, CRM and distribution/channel management are a few functions likely to see increased adoption in the next three years within Ameritas.

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