Insurance-Canada.ca - Where Insurance & Technology Meet

Is Integration the Weakest Link in Systems Modernization?

Systems modernization projects continue to occupy the lion’s share of IT time, resources, and budget in many insurance organizations. Two oft-cited reasons for these initiatives are (1) to respond to business needs for rapid access to more and better data, and (2) to support new, customer-facing applications. Several recent reports suggest that there is a part in the middle – integration – that is proving to be the tricky bit linking actions to results. One of these reports lays the responsibility for fixing the problem on IT’s desk.

We’d like to know what you think. Are new, modern systems implementation projects taking integration into account to successfully deliver benefits?

Insurance – challenges are resource and integration

As reported in Insurance Networking News,  a study from SMA – Strategy  Meets Action found that 40% of the 121 insurers surveyed are “currently involved in either PAS (Policy Administration Systems) implementation or the vendor selection/planning phases of replacement.”  The most frequently cited challenges for these organizations fall into two categories are:

  • IT Resources
    • Dependency on IT to make changes (58% of respondents),
    • Competing priorities for IT resources (46%)
    • Resources unavailable to work on older systems (31%)
  • Data/Integration
    • Difficulty integrating other services with core systems (45%)
    • System not able to easily provide information to business (41%)

In our mind, these are two edges of the same sword.  Business users are investing time and money to provide internal and external users seamless access to information and technology-driven resources.  This requires IT staff resources to implement and integrate systems.

Beyond insurance – integration and systems of engagement …

Insurance is not the only industry modernizing technology.  IBM commissioned Forrester Research to study ‘systems of engagement’ (defined as: “mobile applications and other systems designed to customer expectations for personal attention, immediate response, and self-service “) and the capabilities of corporate IT organizations  to support these systems.

Forrester surveyed 423 IT and Marketing decision-makers.  Its report concluded that “integration with back-office systems is the biggest barrier to consumer-facing systems of engagement, and yet most enterprises aren’t investing to remove that barrier.”

The study’s authors conclude that there are three new forms of integration required:

  1. Collection, analysis, and delivery of information in “real time.”
  2. Information delivery to and communications with new devices
  3. Management of interactions across channels

This sounds similar to the reasons driving insurers’ modernization efforts, i.e.,  to provide seamless access to information and technology-driven resources to internal and external users .

However, as important as integration is to the success of the initiatives, survey respondents ranked it  “seventh on a list of 10 potential investments”.  It was beaten by CRM,  Analytics, and decision management.

Alignment is IT’s issue …

Forrester concludes that there is an alignment problem and that, rightly or wrongly, IT may pay the price:

“IT leaders and marketing leaders disagree on who owns these decisions, with marketing leaders claiming ownership more often than IT gives them credit for… We believe the difference represents the episodes in which marketing leaders, frustrated with IT’s inability to serve their needs, take their IT spending on systems of engagement to outside agencies and consultants.”

Forrester recommends IT organizations take specific steps to address this, which include staying clearly focused on critical technical functions, such as “providing integration, security, content management, and other foundation services, as well as project management support”.

 What do you think?

What is now referred to as Information Technology began as the “Data Processing Department” which was the central, integrated repository for corporate data.  The primary function of the group was to provide cuts of these data to business users in an accurate, timely fashion.  It sounds like this is a core competence that today’s business users want to rely on, albeit with much larger and complex data sets, and with seriously compressed time frames.

We’d like your thoughts.  Are systems modernization projects being threatened by integration – especially data integration – issues?  Should IT be taking a leadership role in providing solutions?

Leave your comments below.  We’ll pull them together.

Leave a Reply

Your email address will not be published. Required fields are marked *