Enterprising Developments

The Difference Between Digital and IT Strategies

Joe McKendrick
Insurance Experts' Forum, December 4, 2012

Many insurance companies may have huge data centers and a lot of IT assets, but a weak or non-existent digital strategy.

That's the thinking of Gartner's Mark McDonald, writing at the Harvard Business Review blogsite, explaining that too many companies think they have a “digital strategy” when actually what they have is an “IT strategy.”

“While your company may have a business or IT strategy that incorporates digital technology, an IT strategy does not equal a digital strategy,” he points out.

What's the difference? Is McDonald splitting semantic hairs here?

Purely IT strategies don’t go far enough in transforming the business, he says. “Most IT strategies treat technology in isolation,” but IT strategies don’t enhance the potential connectivity between people, places, information and things that are part of a digital strategy.

“A digital edge is different from digital automation,” McDonald points out. “Organizations looking to create revenue from digital technology need a strategy that is more powerful than digital substitution. They need to create a digital edge, where digital information and physical resources combine in new ways to create value and revenue.”

That means tracking customer behaviors and preferences with converging technologies such as the telemetrics used for automobile insurance tracking, along with geo-location technologies, social media and weblogs. Digital goes far beyond the investments in servers and platforms, he says, emphasizing that the goal of digital is to drive business outcomes. It has to be more than just “feeling digital,” he adds.

McDonald didn't discuss the emerging role IT departments need to assume in this new digital era, but it will be a prominent one. Behind all the digital strategies that forms the successful 21st century insurance company is a well-organized and governed IT infrastructure, whether it relies on internal systems, cloud resources, or more likely, a combination of both. It is no longer just one part of the business; IT is the business. IT is expected to understand and be a vital component of the business, and thus will step forward to lead the digital charge.

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at joe@mckendrickresearch.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 (1)

We're trying to marry IT and digital strategies with our business in marketing. Independent agents have access to so much rich data and information on their customer base, there's great opportunity to use it to communicate more effectively and proactively with clients to generate leads and retain business. I would be interested to hear your opinion on our product and how we are working to provide a better digital marketing solution for our independent clients. Here's our overview video if you would like to view it... http://youtu.be/GDGas2ScYNg

Do you have any more examples of some some insurance companies with successful digital/IT strategies?

Posted by: Marie C | December 6, 2012 12:40 PM

Report this Comment

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

IT Spending is Healthy, But Where's the Money Going?

IT leaders expect more money for cloud, virtualization and mobile — but no staff increases.

To Quantify or Not — That is the Question with Modernization

Making the quantitative case is a long-practiced ritual in many insurance organizations.

3 Reasons DevOps Matters

Every insurer needs to compete on products and information turned around in light-speed fashion.

Coordinate Coverages to Manage Social Media Exposures

The bottom line is that no one policy will cover all the exposures in the social media realm.

The Internet of Things: Helping Insurers Make Better-Informed Decisions about Risk

The IoT is a major game changer for the insurance industry, and will likely affect every part of the insurance value chain. After all, insurance is data-driven, and that’s exactly what the IoT can deliver—relevant, actionable, real-time data that can provide an accurate picture of what is being—or may be—insured.

Software-Defined Everything

What does it take to virtualize all the key components in your data center?

Advertisement

Advertisement