Strategic Initiatives Biggest Area of Impact for Insurance CIOs

Recent Novarica report examines how IT leaders create enterprise value.

Supporting strategic initiatives outpaces pure efficiency and cost reduction elements in terms of the highest goals among insurance industry CIOs. That’s the takeout from Novarica’s latest research report: “Creating Enterprise Value as CIO.”

Novarica polled CIOs on what they perceive to be the area of highest impact on the company as a technology leader and nearly half—45 percent—listed “supporting new strategic initiatives” as the top response.

“It shows the CIOs have strong participation in a company’s strategy and execution,” says Matt Josefowicz, partner and managing director for Novarica.

Responses to the question on the areas of highest impact vary, depending on the philosophy of the companies the various CIOs work for.

“It’s going to depend on whether expansion and new strategic initiatives are part of the highest corporate goal or whether a company is in more of an efficiency mode to protect their position,” says Josefowicz.

Twelve percent of CIOs answered that driving innovation in operations is their area of highest impact and another eight percent responded with driving innovation in products or services, according to Josefowicz.

“Having 20 percent of respondents list innovation as their highest area of contribution is frankly more than I expected,” he says.

Josefowicz believes the report shows the evolution of the CIO as a “strategic business executive” as opposed to someone with specialized skills.  Twenty-two percent of CIOs rated their relationship with business leaders as the most important factor in a CIO’s ability to deliver with another 17 percent responding “business alignment.”

Only 16 percent rated their technology knowledge and skills as their most important skill.

“It would be interesting if you did this study with CFOs and you got a comparable response on meeting with line of business leaders vs. accounting and financial management skills,” says Josefowicz. “That result wouldn’t surprise anybody. Even though CFOs have specialized knowledge, it is more natural to see them as contributing to overall strategy. CIOs definitely are on that path, though.”

The study looked at how CIOs view their business counterparts in the area of understanding what exactly the IT department does. Having CIOs gain a better understanding of what the business side does appears to be more important than having the business understand IT. Only 11 percent of respondents feel the CEO or president of their company understands the mission-critical systems operating within IT, with 41 percent responding “not well” to the question.

“This was expressed very clearly to me by a CIO: If the CIO and the CEOdon’t get along anddon’t understand each other, who gets fired?” says Josefowicz.

Good senior business executives make an effort to understand key issues in terms of the technology underpinning their business the same way they understand financial management issues, HR issues, or any other issues that are critical to the business, according to Josefowicz.

“Certainly with insurance as an information business, understanding the information technology capabilities and key issues is important,” he says. “That being said, I was heartened that only 24 percent of CIOs felt that [such a lack of understanding] was a problem. That’s still a significant percentage. Twenty-four percent of CIOs are fighting uphill against their business leaders’ lack of understanding.”

Josefowicz believes that points to the need for CIOs to communicate more effectively the importance of IT issues rather than “wishing it were otherwise,” he says.

“Unfortunately, it’s the CIO’s responsibility to make sure the CEO understands well enough not to be an inhibitor,” says Josefowicz.

The study also asked where the future leaders of IT will come from. Josefowicz points out there are differences between traditional IT leaders and someone who looks to do things differently.

“An innovator, by definition, is someone who looks to shake things up and do things in a new way,” he says. “They aren’t always the most popular leaders with their own staff or the business staff. Driving change is hard.”

Josefowicz found it interesting that those who see driving change as the biggest way to create value are more interested in “cross-pollinating the IT department with business folks rather than focusing on people with an existing, well-understood set of technology skills and perspectives,” says Josefowicz.

“Innovation often comes from mixing perspectives,” he adds. “The pure heads-down coder is rarely going to be the effective organizational leader. It’s more a matter of the perspective of the leaders to bring in different perspectives and build better leaders within who are going to have the ability to drive change within the business.”

 

Page 1 of 2
Comments

Resource Center

View All »

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

Get $100 in leads with $0 down!

NetQuote's detailed, real-time leads have boosted sales for thousands of successful local agents across the...

The Growing Role of Excess & Surplus Lines in Today’s...

The excess and surplus market (E&S) provides coverage when standard insurance carriers cannot or will...

Increase Sales Conversion with this Complimentary White Paper

This whitepaper will share proven techniques - used by many of the industry's top producers...

D&O Policy Definitions: Don't Overlook These Critical Terms

Unlike other forms of insurance where standard policy language prevails, with D&O policies, even seemingly...

Environmental Risk: Lessons Learned from Willy Wonka and the Chocolate...

Whether it’s a chocolate factory or an industrial wastewater treatment facility, cleanup and impacts to...

More Data, Earlier: The Value of Incorporating Data and Analytics...

Incorporating more data earlier in claims lifecycles can help you reduce severity payments by 25%*...

How Many Of Your Clients Are At Risk Of Flood?

Every home is vulnerable to flooding. Learn four compelling reasons why discussing flood insurance with...

Gauging your Business Intelligence Analytics Capabilities and the Impact of...

Big Data, Data Lakes and Data Swamps, How to gauge your company's Big Data readiness....

Extending Contact Center Capabilities Across the Insurance Enterprise

Today advancements in technology are making a big impact on business and society. To yield...

Tech Digest eNewsletter

Technology related insights for insurance professionals including key developments, solution providers and news briefs from the carrier front – FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.