The consumerization of IT is having a significant impact on every insurer and most certainly on every insurer's IT department. There is no escaping the effect. Basically, there are two options for the IT department—try to control it, or work to harness its power. But, the best approach is probably a combination of the two.

The "consumerization of IT" means different things to different people. SMA takes a broad view, defining it as "the abundant availability to the general public of a wide variety of easily used information technologies."

The consumerization of IT is not just about mobile; it's about bring-your-own devices, bring-your-own apps, build-your-own applications and websites, and use-your-own computing infrastructure (made possible via low cost computing and cloud-based services). It's also about fostering innovation through ideation and crowdsourcing, and the ample availability of tools that provide new insights from internal and external data. The individuals that are leveraging these capabilities are customers, employees, business partners, and other third parties—essentially everyone.

Some CIOs perceive this consumerization to be a real threat that must be aggressively managed. They see potential disasters stemming from security breaches, the lack of standardization, and inefficient use of funding. And, many worry about the declining influence of IT. While these concerns are valid, they reflect an inside-out view of the world.

There was a time when technology was the province of a cadre of experts in the IT department—specialists who conceived technology solutions, and then designed, implemented, and managed them. These technology professionals felt that they knew what was best for the organization.

But that time is long past. The IT organization continues to have a vital role to play, but innovative insurers are seeking to capitalize on the forces brought about by the consumerization of IT. They are adopting an outside-in approach. They are effectively balancing how to unleash the power of individuals to create and use technology, while addressing the real concerns in this new environment.

CIOs need to think about policies concerning technology use; they need to identify architectural implications for network bandwidth, storage, and data privacy and security. Instead of a 'build it and they will come' mentality, they need to think about unleashing the creativity and innovation made possible by the ubiquitous nature of technology—not only on the part of IT developers, but also for all employees, customers, and business partners.

This grand vision can be a challenge for many organizations. Some of the specific ways we see insurers harnessing the power of the consumerization of IT are:

Experimenting with organizational constructs and social media tools to drive innovation
Increasing collaboration with business units to capitalize on analytics
Defining and implementing BYOD policies
Piloting cloud-based services
Providing tools to facilitate collaboration among business units and distribution partners
Rethinking outsourcing to improve resource utilization and tap into new sources of expertise

It is clearly more challenging than ever for CIOs and IT departments. Yet the opportunities to partner with business units and to make a significant contribution to overall business results have never been greater.

(Mark Breading, a partner at Strategy Meets Action, is well known for his perspectives on innovative uses of technology in insurance and the future of the insurance industry. He has exceptional knowledge and experience in all aspects of advanced technologies and solutions that provide value across the insurance enterprise—including data and analytics, customer communications, enterprise content management, and mobile technologies.)

Special Reports /

The Consumerization of IT: What It Means for Insurers

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