Time for an Extreme Makeover?

I recently attended a couple of the larger insurance IT conferences. I view them as an opportunity to put my ear to the railroad tracks and gauge where the current train of industry thought is heading. What I heard was, overall, things are going smoothly–the industry has achieved and continues to make some strides in efficiency. In fact, the issue you're now reading is a testament to the industry's increasing efficiency, with features on streamlining the solution process using multivendor alliances, maximizing the benefits of outsourcing, and creating a successful business-IT project team–in other words, how to get IT done well.

But I'm wondering what's next? As efficiency efforts are gaining ground, might the industry be ready to seek a different destination–one that insurance IT really hasn't gone to very often–namely, innovation? I'm sure the notion of insurance/innovation is getting some snickers from readers, but it's critical the industry innovate, since nothing remains dynamic without doing so. And isn't the true reward of efficiency the ability to take formerly wasteful resources and apply them progressively?

The reality, though, is the industry still is grappling with many major, deeply entrenched problems–industry observers at the conferences pointed time and again to data, whether cleaning, integrating, warehousing, or analyzing it. In such cases, however, while technology is solving problems, it isn't offering anything new, they commented.

About a month ago I received a "Council Opinion" titled "Innovation: A Top Priority" from the Cutter Consortium, an IT advisory firm. The council members make some interesting assertions, for example, "after finally experiencing the law of diminishing returns on efficiency improvements, many companies are now placing innovation as a top priority. Innovation requires a different environment and a different culture; most companies will require an extreme makeover in order to be successful."

Cutter further contends while operational excellence has been the mantra, executive leadership now has to be the change agent for innovation. Council members offer several recommendations, among them: Create an IT innovation idea budget–a real budgeting line for IT R&D to fund multiple idea projects. Develop a job position of IT Entrepreneur who would work as an independent agent with business. Devise a performance measuring system that places significant emphasis on innovation and customer value and less emphasis on schedule and cost.

Nevertheless, one council member concludes, "Let's get real. Innovation takes time, and nobody's got time to do it. The people who are capable of innovating are busy covering the jobs of the other people who were let go to save costs. . . . The short-term gain of working the work force harder comes at the price of the future."

We've seen there is truth to this last assertion, but we're approaching a juncture where we need to get past that, and it's up to IT leadership to start to rethink the job of IT. The future is waiting but not for long.

Sharon S. Schwartzman

Special Reports /

Time for an Extreme Makeover?

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