Approximately 3 minutes reading time
For years we have being talking about digitization, digital transformation or being a digital champion. To get there, all eyes within the company have been on IT to automate internal processes. To the outside world, we talked about AI, IoT, chatbots and blockchain. Until recently, these internal and external worlds haven’t been in harmony with each other, but, fortunately, the gap between them is now closing.
According to KPMG ‘Digital is now mainstream in every business and across every sector’. This is also true for the insurance industry. Some say that, by 2022, 80% of the revenue growth will depend on digital offerings. For the IT function of the future, as KPMG states, this means your organization can live or die by the way it delivers technology services, responds to issues and manages expectations.
Many people seem to forget that, in this digital world, we still have to deal with our legacy. Actually, according to Gartner, legacy maintenance is one of the CIOs’ largest annual investments, leaving little left over for digitization. True innovation will come when CIOs and CTOs are freed from huge annual investments in legacy maintenance. As there are only a few options and true solutions that will set you free you from legacy maintenance, the current situation represents a shift from arguing about what digital means to actually using it to deliver some real value.
From legacy to a new now
KPMG signaled a trend whereby companies that have existed for decades are starting to undergo successful digital transformations. So, even companies with a huge legacy have been able to make the transition; integrating their front-, middle- and back offices into what KPMG calls the connected enterprise, which is laser focused on the customer. So, if you as CIO or CTO have been thinking that there is no end to the legacy tunnel, you couldn’t be more wrong.
CEOs are taking notice and taking action, trying to transform their company into a more customer centric one. One challenge that needs to be solved is the transformation of legacy systems into systems of records; it is crucial to move intelligence from the legacy system into a new digital world or, even better, a digital platform. Why is that important? Well, legacy systems are champions in performing existing core business processes (policy management, claims administration etc.), but they are not designed for the digital world (AI, IoT to name a few). Whether it is called disruption or digital transformation, the future of IT will be inexorably intertwined with this concept of the connected, low-maintenance enterprise. A digital platform empowers insurers to make a true step in digital transformation, enabling them to serve their customers as they should be served. As these new digital platforms not only honor your current legacy but also open up a whole new world of insurtechs or data providers, the light at the end of the legacy tunnel burns ever more brightly.
Closing the gap
Fortunately, we are at the beginning of a new era. There’s no longer a distinction between business strategy and technology strategy. There’s just strategy, and technology is driving it. A lot of companies are trying to overcome their legacy with a rip and replace solution for their existing core systems, but such an approach won’t set you free, because it won’t make you agile enough to respond to any changes within the company or competition. As mentioned, legacy systems need to be transformed into systems of records. Let the champion be the champion (a.k.a. the legacy system), and add a new intelligent layer (a.k.a. a digital insurance platform) to your IT landscape with AI, IoT possibilities.
If you are curious to learn how this can be realized, download our whitepaper, ‘Smart Mid-office’, and learn how the gap between the internal and external world is about to close.