We have daily discussions with insurers about how to balance the tasks involved with the maintenance of a legacy system environment with those required for strategic system renewal. It brings to my mind the analogy of “fixing a plane in mid-flight.” Most IT shops have neither the capacity nor the skill sets to do both with their in-house staff. These needs have created a large market for ITO, BPO, and system integration services. In observing this expanded sourcing model in action, it occurs to me that the whole organizational design of information areas is undergoing a change.

Most “shops” were built on a manufacturing design. The work was handled like this: “You, Mr/s. Insurance Business Person, tell me what you want (give me the specifications) and I will have my craftspersons (programmers) build it. We will then test it and deliver it to your “door.”

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