Approximately 3 minutes reading time
As your business races to embrace the latest, increasingly sophisticated digital offerings, essential to remaining competitive in today’s marketplace, the chances are that your IT landscape has started to resemble a kind of "spaghetti architecture". Multiple systems and back office solutions are intertwined. Data, instead of being centrally stored, is all over the place. You are losing control of your IT landscape, and, if you imagine that such a landscape will enable you to play at the top of the digital insurance market, you should think again.
Technological developments, rising consumer expectations and regulators demanding more transparency are putting greater pressure on CIOs and CTOs. Despite the urgent need for technological innovation, 79 percent of organizations are still in the early stages of their digital transformation. This is evident from McKinsey's IT strategy research from 2018. The "legitimate factor" (as McKinsey calls it) for this slow progress is the "mind-blowing" complexity of legacy systems. In addition, McKinsey believes that many CIOs and CTOs do not yet realize that their role is changing, beyond the essential cost and performance responsibilities. Ultimately, it's all about the end customer, but, for many CIOs and CTOs, that insight is still a long way off.
Understanding the business from within
McKinsey found that the best CIOs and CTOs are those who are more involved in what goes on ‘on the shop floor’, as opposed to those who only meet with the C-suite or attend strategy meetings. The best CIOs and CTOs take the time to talk to their people on the ground in order to gain in-depth insight into the day-to-day reality in the workplace. They do everything they can to get a nuanced and detailed picture of the customer's challenges. In practice, this is done by continuously studying customer satisfaction reports, monitoring telephone calls from customer service and participating in user groups.
The companies at the forefront of the market are those able to adopt a multidisciplinary approach at an early stage. Both the IT and business side of the company see it as a priority to attend panel discussions so that they can effectively guide their teams in developing products that best meet the needs of the end customer. It could be said that tomorrow's winners display a different mind-set, one which looks beyond or simply ignores business silos, with an eye on the end customer. Call it agile working.
What now?
Escaping from "spaghetti architecture" demands more than just an agile mind-set. A future-proof and flexible IT landscape is required, with COBOL programmers becoming a thing of the past. Modern technology is vital. The pitfall that then lurks in waiting is the hastily chosen so-called "rip and replace" solution; old systems out, modern technology in. The dangers of rushing for a "rip and replace" solution include:
- A long-term freeze on innovation due to lengthy implementation. Ultimately, you are relieved of your legacy burden, but in the short term the new system restricts your power to innovate.
- It’s not for nothing that your current IT landscape is so complex. Nobody deliberately opts for complexity. But, choosing a "rip and replace" solution doesn’t do justice to your current environment, and it’s very possible that some important IT issues get overlooked.
The best move that CIOs and CTOs can make is to transform their current systems into a "system of records". Next, an enterprise platform needs to be added. The platform will extract all the data from the "system of records" and harmonize it in a new cloud environment. At the same time, as a CIO or CTO, you are able to phase out your current legacy systems and integrate a new back office application. The new environment enables insurers to transform their organisation into a truly customer-oriented business, where access to data is centrally coordinated.
An important precondition for an enterprise platform is that it comes with built-in knowledge of insurance and industry-standard processes. That makes it directly applicable and deployable. To ensure far-reaching flexibility and future-proofing, it is important that the platform allows you to add external data or partner solutions.
In short
The future-proof insurer not only has an agile mind-set with an in-depth understanding of the daily reality in the workplace. The future-proof insurer is also aware of the complexity of its IT landscape and recognizes the short-sightedness of a "rip and replace" solution. An enterprise integration platform ensures that complexity is phased out gradually. In addition, the insurance company is immediately in a position to start innovating (using innovative partner solutions) in order to meet customer expectations and (as data is recorded centrally) are able to provide compliance officers with direct insight into audit trails.