Many insurance companies may have huge data centers and a lot of IT assets, but a weak or non-existent digital strategy.
That's the thinking of Gartner's Mark McDonald, writing at the Harvard Business Review blogsite, explaining that too many companies think they have a “digital strategy” when actually what they have is an “IT strategy.”
“While your company may have a business or IT strategy that incorporates digital technology, an IT strategy does not equal a digital strategy,” he points out.
What's the difference? Is McDonald splitting semantic hairs here?
Purely IT strategies don’t go far enough in transforming the business, he says. “Most IT strategies treat technology in isolation,” but IT strategies don’t enhance the potential connectivity between people, places, information and things that are part of a digital strategy.
“A digital edge is different from digital automation,” McDonald points out. “Organizations looking to create revenue from digital technology need a strategy that is more powerful than digital substitution. They need to create a digital edge, where digital information and physical resources combine in new ways to create value and revenue.”
That means tracking customer behaviors and preferences with converging technologies such as the telemetrics used for automobile insurance tracking, along with geo-location technologies, social media and weblogs. Digital goes far beyond the investments in servers and platforms, he says, emphasizing that the goal of digital is to drive business outcomes. It has to be more than just “feeling digital,” he adds.
McDonald didn't discuss the emerging role IT departments need to assume in this new digital era, but it will be a prominent one. Behind all the digital strategies that forms the successful 21st century insurance company is a well-organized and governed IT infrastructure, whether it relies on internal systems, cloud resources, or more likely, a combination of both. It is no longer just one part of the business; IT is the business. IT is expected to understand and be a vital component of the business, and thus will step forward to lead the digital charge.
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.
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The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.
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