We're still climbing out of the recent economic downturn, and times are still challenging. However, forward-looking insurance companies need to position themselves for the next growth wave ahead. Unfortunately, things won't get any easier as the economy starts to grow again; instead, markets will get even more competitive, customers will get even more demanding and margins will get even thinner.
How can a company rise above all this? Effective deployment of information technology will make the difference. That's the view of Syama Sundar, global client director for the insurance practice at Tata Consultancy Services. Sundar recently fielded some of my questions about the new economy for an upcoming special report in INN. As he put it: “ IT is one of the driving forces behind competitive advantage in the marketplace. Insurance IT executives must think about how they can bring new value from championing investments in IT that will create and sustain future business value and speak to the needs of the consumer.”
The era of IT-as-usual ended with the recent economic downturn, Sundar says, observing that productivity and cost reduction are now on the agenda of many insurance companies. However, there's a growing emphasis on enhancing customer experience and operational effectiveness that is driving new investments. Sundar expects to see areas such as policy administration transformation, business intelligence and analytics receiving top-most priority at a large number of insurers.
Expect to see more resources move to newer areas such as cloud computing and analytics, as insurers seek to achieve greater agility and operate smarter. “Cloud computing and analytics have received much needed audience within insurance companies,” he points out. “There are a good number of activities being carried out by insurers to understand 'what?,' 'when?' and 'why?'”
How can technology leaders and managers within insurance companies better work with the business in this new hyper-competitive environment? Sundar is an advocate of portfolio management and business–IT alignment. But projects need to deliver results extremely quickly to get the support they need. “Projects that can start yielding results in two to three quarters are presenting better viability to sponsors than multiyear large transformational initiatives,” he points out.
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.
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