Insurance IT Braves New Frontier in 2009: Defining Innovation
Insurance Experts' Forum, September 23, 2009
Insurance IT shops are about to be tested. Why? Because in addition to something they do very well for themselves and their internal business customers—cutting costs—they’ll be tackling something foreign to many of them: driving business innovation.
Earlier this year, Forrester asked 67 North American insurance IT decision-makers about their big business and IT initiatives for the coming 12 months. Along with the “golden oldies” playlist of IT efficiency and different flavors of risk management, large insurance IT shops are putting equal muscle to bringing new thinking to the business (see Figure 4-2).
But just what are we talking about when we think of what innovation means? Ask the IT team and you’ll get responses along the lines of “it’s a new idea” or “we’ll build some new product” or that innovation is new delivery models like Cloud or SaaS. All these responses are right, but successful innovation is a lot more than just making new stuff or buying new tech. To make innovation initiatives pay off means that these kinds of investments need to deliver new business value.
Translated, that means is this innovation something our customers—employees, agents, groups, and policyholders—will value and even pay for? And figuring this out means that the business needs to be willing to fund some investigation into whether the big ideas will be meaningful and how to prioritize all of this new thinking. Without an innovation plan, insurance CIOS and IT teams could get a black eye, spending scarce budgets on initiatives that do worse than go nowhere, but end up disappointing the broad customer base. Even organizations recognized for business innovations like Apple can fall down—who can forget Apple’s first entry in the PDA market, the Newton?
Before embarking down the innovation path, IT needs to be thinking about the business strategy and whether or not some piece of tech or a vendor solution will deliver that business value. Frameworks like the Innovation Radar can help insurance IT organizations better map this uncharted territory.
Ellen Carney is a senior analyst with Forrester Research. She focuses on how the financial services industry researches, procures and deploys business technology, and is responsible for developing the global forecasts for IT budget and spending forecasts for insurance and banking. She can be reached at email@example.com. Follow her on Twitter at: http://twitter.com/ellenmcarney
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