New York — Business vs. technology—this often seems to be what executives face. Each side has their perceptions of the others' functions, and a new study reveals CEOs' thoughts about technology.
P&C insurance CEOs tend to focus on the impact of technology on distribution and service while undervaluing the potential impact on product development and marketing, according to "Insurer CEOs on Technology: Property/Casualty Survey Results 2008," a report by New York-based research and advisory firm Novarica, a Novantas Company.
"Insurers recognize that technology has created significant value in improving and streamlining communications over the past few years," says Matthew Josefowicz, director of the insurance practice at Novarica and author of the report. "CEOs across the industry recognize the returns on their investments in agent portals, policyholder service capabilities and internal workflow systems. The next stage for insurers is to turn their attention to fully leveraging technology in data analysis in order to improve product and customer profitability."
Key findings from the report, based on a survey of 59 P/C insurer CEOs conducted in January 2008, included:
* Small and midsize insurer CEOs are often unfamiliar with new technology areas such as SOA and Web 2.0
* Nearly all insurer CEOs underestimate the technological savvy of their customers, ranking them below their own employees and agents
* Insurance companies where the CIO reports to the CEO or line of business president are more likely to be more optimistic about the value of technology
* Companies where the CIO reports to the CEO are more likely to value technology highly and have larger percentages of their staff devoted to IT than companies in which the CIO reports to operations or finance.
Nearly all respondents said they regard IT as a key strategic partner in running and growing their businesses.
CEOs in other industries would likely agree, and add that IT need not be a proactive leader in innovation, according to a survey from Cambridge, Mass.-based Forrester Research Inc. Forrester surveyed 75 global CEOs to find out how CEOs feel about IT/BT now.
The survey revealed that 60% of CEOs are satisfied with the overall performance of IT/BT. While some may conclude from these numbers that CIOs are in pretty good standing with CEOs, says George Colony, chairman of the board and CEO at Forrester, the fact that 60% of CEOs believe CIOs are doing a satisfactory job is bad news. "If only 60% of your top executives were satisfied with the performance of the CFO, that would signal meaningful distrust in the financial operations of your company," he says.
"The fact that CEOs are not looking to the CIO to be a proactive leader in innovation and process is not bad news," Colony says. "Rather, it is a frank assessment by the CEO that the CIO should not be, indeed cannot be, the driving force in these two areas."
When it comes to business innovation, the CIO is again not the proactive driver, Colony says, but rather the steady partner with business executives who are chartered to lead business innovation. "For business executives to effectively drive process change and innovation, they must have a solid understanding of technology," he says. "The CIO must be in the business of educating and teaching the businesspeople so that they can make the leap."
Sources: Novarica and Forrester Research Inc.
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