Price is important to European, Middle Eastern and African insurers selecting an IT service vendor. However, becoming increasingly important is the growing sophistication of IT service relationships, with goals such as flexible capacity, access to new skill sets, and strategic IT advice allowing insurers to tackle long-term projects that would have otherwise been out of reach, according to recent research from Celent.
“IT Services Vendors Solutions Spectrum,” Europe, the Middle East and Africa Version, 2010 contains 28 profiles of vendors with a focus on European presence. Celent has categorized the key services provided by vendors as:
• Custom Development
• Package Implementation
• Domain Consulting
• Strategic Consulting
• Infrastructure Operations and Management
• Architecture Design
• Business Process Outsourcing
According to the report, in the past 10 to 20 years, offerings by IT service vendors have dramatically increased. A mantra for many insurers has been to focus on core competencies—meaning they look to third parties for opportunities to increase IT capability. Large (and growing larger) firms in India have helped revolutionize the space, relying on process and standardized methodologies to make up for distance.
The analyst firm reports that increased competition has lowered prices, which is great for insurers, but the IT service relationship is more important to insurers. In Celent’s view, the best partnerships are those that are long-term, strategic engagements, where a vendor is leveraged to bring in new expertise, adds both technology and domain knowledge to the business, and is relied on as a true partner.
This growing need from insurers has resulted in a significant expansion of companies serving the insurance IT market. A significant amount of the business goes to large consultancies and software vendors because of their experience and depth of client base, but—as the vendors profiled in Celent’s report demonstrate—many of the businesses that have been formed to meet demand are small or niche players, able to focus on different strengths and offer different kinds of business relationships.
Vendors profiled in the report include:
• 3i Infotech
• Aegis BPO Services
• EXL Services
• HCL Technologies
• L&T Infotech
• Mahindra Satyam
• Tata Consultancy Services (TCS)
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Corrected November 10, 2010 at 4:33PM: yes