Blog

Repairing a Jumbo Jet While In Flight

Mike Fitzgerald
Insurance Experts' Forum, February 19, 2010

We have daily discussions with insurers about how to balance the tasks involved with the maintenance of a legacy system environment with those required for strategic system renewal. It brings to my mind the analogy of “fixing a plane in mid-flight.” Most IT shops have neither the capacity nor the skill sets to do both with their in-house staff. These needs have created a large market for ITO, BPO, and system integration services. In observing this expanded sourcing model in action, it occurs to me that the whole organizational design of information areas is undergoing a change.

Most “shops” were built on a manufacturing design. The work was handled like this: “You, Mr/s. Insurance Business Person, tell me what you want (give me the specifications) and I will have my craftspersons (programmers) build it. We will then test it and deliver it to your “door.”

Many efficiency and effectiveness improvements have been realized by insurance IT areas adopting production techniques such as TQM, Six Sigma, Lean, etc. However, instead of a manufacturing paradigm, the multiple vendor and relationship management challenges faced in 2010 brings to my mind more of an air traffic controller analogy – multiple planes in the air with the common objective of getting to the destination safely (first) and on time (second).

This would all be a cute analyst musing except that the skills involved with delivering in these two environments are very different. Manufacturing requires a technician’s precision; air traffic control requires a detailed understanding of flight (but you don’t have to be a pilot) and a keen sense of anticipation of what is likely to happen next. The people in the tower must be able to guide without their hands on the controls, must be able to see several steps ahead, and must have an effective guidance system.

For executive leadership in an insurance company, the analogy leads to a different search profile for a CIO. It is not necessary to fill these positions with the best technician, but is critical to have someone in place with the required “soft skills” to coordinate effectively.

(BTW, why are “soft” skills so hard to develop?)

Readers are encouraged to respond to Mike using the “Add Your Comments” box below. He can also be reached at mfitzgerald@celent.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

 

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

Global Supply Chain, Local Problem

As a technology provider, your clientís ability to deliver products and services to their customers, when and where they need them, is at the heart of their business success.

Legacy Systems Are Increasingly a Competitive Handicap

Legacy systems, while reliable, increasingly hold insurers back, a new study finds

From Her to Watson, and What’s Next?

Imagine a learning system that can replace the performance of your best employee to provide the same level of support across the organization.

Five Reasons to Software-Define Your Operations

It may be possible to provision key services with the click of a mouse, but benefits go well beyond that.

3 Policy Admin Conversion Considerations

Insurers would be wise to learn these lessons before formulating a strategy to convert policies to a new policy administration system.

Boyle’s 4th Law - Response Time Matters!

Why many companies donít do a good job of measuring the thing that clients value the most.