Budget Busters: IT Spending in 2011 Part 4

The demands of the legacy systems range from being able to have more visibility into the data, being able to have the system more flexible when it comes to workflow, and being able to put products on it quicker.

"It's getting harder and harder to work with the legacy systems," admits Harris-Ferrante. "They are asking how they can reduce the cost of running these big, bulky systems. A couple of years back they were asking about the mainframe. Now, it's how do they get the data out of the systems and make the systems perform better. It's turning from a hardware situation to a systems application situation."

Harris-Ferrante also sees continuing interest in the investment in core insurance systems. Still another big spike—almost a 30 percent increase—is in business intelligence and data initiatives.

"People are telling us they have a lot of data but don't know if they are getting the maximum value from it," she says. "Investment is going up drastically this year as companies say they have more data than they possibly need and how do they get the value out of it. It's through mining, and making sure they have everything they need."

Cutting Expenses

Insurers still aren't done cutting expenses, which is why business process management is such a priority in the industry.

"People start to externalize the processes from some of these legacy systems," says Harris-Ferrante. "You can buy a BPM system to sit beside a legacy system and it will allow you to take out the business logic and move it into a separate application. It also allows things to go faster through business process orchestration."

Insurers also can turn BPM into an active development tool.

"You can build a claims application for workflow on top of BPM," says Harris-Ferrante. "There are so many different value propositions for insurance companies. We're going to see a lot of BPM investments and people asking about BPM reuse. How can they use it in different ways? It's an opening of the minds as people bring it in as an enterprise initiative."

Channel Management

There are many different strategies being thrown around the distribution channels, points out Harris-Ferrante.

"If you are in the life insurance area a lot of [insurers] are talking about how to build relationships with the distribution staff, how to get them better tools, and holding conversations around commission systems and licensing appointments."

Property/casualty insurers are having conversations around how to make the direct channels more effective, direct marketing, and how to do more customer conversation.

"Everyone's talking about how they can strengthen the sale process, whether that's through direct sales or an intermediary-based sales force," says Harris-Ferrante.

Some of those conversations eventually get around to mobility.

"If you are agent/broker based you are getting pressure from the people who want to be mobile so part of it is what are the basic things that your sales people will want—accessibility, straight-through processing, how to do what needs to be done from a day-to-day basis, and keeping up with the next generation," she says.

That will involve mobile technology, performance management, real-time visibility, and opening analytics to the sales people.

"We're right now dealing with the tactical and the next thing we'll be dealing with is long-term strategy around analytics," says Harris-Ferrante.

Security Measures

Carriers are still trying to figure out how to give people what they need and what they want without opening security risks. There's no firm agreement on the problem, though.

"Some people say it is critical some say it is nice to have," she says. "We anticipate the investment in mobility to go up drastically in the next 12 months. Where it might be nice to have for some, when you look at the proliferation of smart devices mobility is quickly moving from a nice to have to have to have. That should be a key priority on most companies' agendas."