As insurance organizations finish their planning sessions for 2014, we are getting an impression that the coming year will be a watershed for the industry as a whole, and for IT in particular. We get the sense that the priority for most organizations will be execution of externally-focused business plans to respond to unprecedented challenges (and opportunities). In the midst of this maelstrom, the role of IT could change radically, with a new group of users directing the use of the technologies.
We’d like to know what you think.
New Business Needs Require New IT responses
There is little doubt that expertise in Data, Big Data, and Analytics is rapidly becoming a critical success factor for insurers. In times past, the acquisition, storage, security, and use of data was the domain of IT.
That is not the case now. As reported in Insurance Networking News, “insurers have begun shifting from cost cutting measures to more ambitious technology projects intended to support competitive initiatives and drive efficiencies, according to industry experts.” And may of these initiatives are being put in the hands of marketers and actuaries, with IT playing a support role.
One example cited was Allstate in the US, which is using data to inform and leverage its advertising spend. Pamela Moy, Allstate’s VP of marketing analytics, research and administration, notes that US insurance advertising spend is over US$4 billion. In order to ensure these dollars are spent wisely, Moy notes, “”We have to make sure that we’re breaking through with every single dollar that we were spending and that we are reaching the right people.”
To this end, Allstate is acquiring and deploying sophisticated data and analytic tools to marketers to monitor and change advertising campaigns. Referred to as data management platforms (DMP) these tools are capable of integrating with internal and external data to achieve market segmentation, in addition to providing analytic capabilities.
The DMP used by Allstate is (x+1) Origin. The model described on the (X+1) webiste provides for IT to manage the vendor and its reach, but it is clear that the marketers are in control of the data.
What is the end game here?
As reported in Information Week, recent data from Forrester suggests that the traditional IT department is under pressure from two trends: commoditization of technology and targeted customer engagement requirements. On the one hand, Forrester research director, Christopher Mines says, “There are significant elements of enterprise technology that are commoditizing, or have already commoditized.” According to Mines, these could include IT core infrastructure functions such as servers and enterprise applications.
At the same time, other applications – especially those targeting customer engagement – will stretch IT resources. Mines notes that the CIO will “play the role of orchestrator and integrator of external services and service providers”. This could result in the CIO reporting into marketing, and a centralized IT department becoming a “thing of the past by 2020.”
What do you think?
Do you see a path that would put marketing in control applications, data, or other resources that were previously in the IT domain? Would this be bad news or good news, as far as you can tell?