While much of the world has been enamored with the promise of cloud computingwhere you can simply rent time from applications and systems maintained by a third party somewhere else,
I recall speaking with Dilip Wagle, a partner with McKinsey a couple of years back, who warned that cloud computing still required a great deal of integration work, and end users risk losing customization and flexibility. In addition, the good enough functionality provided by Software-as-a-Service (SaaS) applications may not be sufficient for a companys needs, in some cases, he says. In addition, there is risk in situations in which customers data are stored off-premise in a data center owned or contracted by the service provider. In the event of data center failure on the part of the service vendor, the customer has no recourse but to hope that data were appropriately backed up and managed in a secure fashion, Wagle added.
Last week, the folks at McKinsey & Co. poured more cold water on the cloud computing party,
Its not only larger organizations in general that may need to carefully weigh cloud computing arrangements, but also the insurance industry as well. Last fall, I spoke with Michael Goodside, CTO for
Many insurance industry transactions involve large workflow problems, Goodside explained. For an automobile accident, it could literally take years. You might have medical issues two years down the line, which trace back to an original claim. There are really a lot of steps, and theres workflow that goes across large amounts of calendar time. Software-as-a-Service favors simple things: low volume, pay for what you use, generic, low security. Insurance transactions involve very specialized tasks, proprietary information, reliability is critical, and volumes of data.
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology. He can be reached at