Future-Proofing Your IT Investments: Lessons from the Industry
Historically the insurance industry has had mixed success at future-proofing. One might say the industry has done a good job, with many insurers running systems that are multiple decades old that are still serviceable. On the other hand, participants in the industry are facing increasing technology change and are challenged with where and how to invest.
In the new report Future-Proofing Your IT Investments: Lessons from the Industry, Celent suggests that future-proofing should be concerned with getting faster at change and positioning for flexibility. The key challenge to change speed and flexibility in insurance is legacy.
Celent presents five “legacy makers,” behaviours that increase the likelihood of creating new legacy. Sometimes the symptoms of legacy are hard to spot. Celent advises insurers to look for activity that is missing:
- The business units no longer requesting change.
- The systems no longer seeing change activity.
- The alternative routes to change that don’t exist.
- The software products that see no upgrades.
Agility or speed of change isn’t something found solely by avoiding legacy; rather it is something that must be designed into the organisation. The solution is part technology and automation, part who makes the change and with what tools and under what governance. Insurers must design for the expected speed of change, and must do so by reducing the decision points in the change processes where needed, and deploying automation and self-service for change where necessary. The prize for improving agility is differentiation for the insurer.
“Ultimately future-proofing is about preparing the insurer for an uncertain future,” says Craig Beattie, a senior analyst with Celent’s Insurance practice and author of the report. “The future will bring new requirements for change. The future-proof insurer will be able to better differentiate themselves by implementing novel options and responding to requirements faster.”
The report is 32 pages and contains four figures and two tables.