Datos Insights recently held our annual conference of 90+ senior executive IT leaders across the insurance industry. Surprisingly, technology was not the only top of mind topic for the attendees. The challenge of business and IT alignment continues to be an obstacle despite years of Agile transformation and robust governance programs. It’s not a new theme or story. However, it’s becoming a crucial capability for carriers to thrive in an ever more turbulent world.
Why do insurers struggle with the basic business concept that technology forms the corpus of their business? It’s not ancillary. Technology has gone a long way from being a backroom function that delivered green screen systems and kept computers, networks and PC’s running. Technology is reshaping industries daily. Why not insurance?
In speaking with our attendees as well as my own experience in the industry, there are simple suggestions for improving business and IT alignment. These actions are targeted to the business community, not the IT community.
- It’s not OK to be comfortable with technology ignorance in the 21st century. Business leaders need to understand technology and the opportunities it creates. You don’t need to know how to code, but technology capability acumen is crucial. It encompasses everything we do in our daily lives. Business strategy needs to embrace the transformation technology brings. It’s working for the TSA, it can work for insurance.
- Reach out to your IT partners to spend some time in their world. Understand the financial challenges of running a multi-million dollar operation that includes people with different skills to support the multi-generational technology footprint supporting multi-generational products and processes along with the software, hardware, licenses and third party services to keep the operation running.
- Understand that IT is a business within a business. IT is responsible for functions that are segmented in the business. I often helped my business partners think about how IT functions relate to insurer business functions. IT is responsible keeping the business running, appreciate the complexity of managing an operation.
| Carrier Function | IT Function |
| Sales and Distribution | Program Governance |
| Underwriting | Architecture and Design |
| Operations | Application Development |
| Customer Service | IT Service Desk |
| Claims | Production Support |
| Risk Management | Security and Business Continuity |
| Facilities | Infrastructure |
- Recognize that IT is a profession, just like legal, finance, underwriting and claim handling. IT professionals go through years of continual training in technologies, computer languages, frameworks, infrastructure etc. Appreciate the education and fortitude it takes to learn and apply knowledge in constantly evolving field. Just because your grand child can use a smart phone, doesn’t mean they are an IT professional.
IT can help the business thrive, compete effectively, and deliver outstanding results to stakeholders. Carriers who have created effective business and IT alignment have a sustaining competitive advantage.
