- Where Insurance & Technology Meet

Cloud, Agility, Innovation: Is This the New Holy Triangle?

IT professionals are familiar with the sacred triangle of projects: Scope, Resources, Time. The idea is that, as in a right triangle, the scope of a project will drive the requirements for resources assigned and the time allocated for the activities.

It seems that there is another triangle forming in the sky, suggesting that the size of cloud applications and services is proportionate to the amount of agility and innovation that an organization is seeking.

We’d like to know what you think of the construct.

Growth of the Cloud in Insurance

Cloud services have emerged as a viable alternatives for firms looking at outsourcing IT functions to reduce costs.   Looking at the financial services generally, David Linthicum, SVP Cloud Technology Partners recently noted that “In the world of finance, new regulations are driving up budgets and cloud computing seems like a good approach to drive them back down.”

Driven by continuing needs for expense management,  insurers have been enthusiastic in embracing the approach.  As reported in Insurance Networking News, Everest Group has found that, while the overall financial services market for IT Outsourcing (ITO) has been relatively flat, insurers were growing their use of ITO (and business process outsourcing – BPO) to achieve needed efficiencies.

The Shape of Clouds can be agile …

However, once cloud computing is understood and embedded, insurers frequently find that the enabling agility is as or more appealing that efficiencies.  Kathy Burger, Editorial Director of Insurance & Technology recently wrote:

Beyond their appeal as variable-expense and cost-effective computing models, cloud-based and other as-a-service and virtualized methods let businesses (including insurance) transform their approaches to market changes. Resources can be deployed more readily to where there’s a high-priority need, whether it’s responding to a natural catastrophe, entering a new market, supporting the annual report process, or developing mobile apps.

And then comes Innovation …

According to Rajesh Ranjan, VP of Everest Group, insurers’ conservative reputation for technology innovation is vulnerable to cloud formations.  In an interview with Insurance & Technology, Ranjan said that this reputation “is opening up as they look to outsource IT and business processing.”

As social media, mobility, analytics and cloud computing (affectionately known as SMAC) encroach on traditional technology constructs, insurers are being forced to respond with innovative approaches.  Ranjan suggests that consumerization of IT is motivating insurers to enhance their customer experience strategies and prepare for new advancements in the changing tech market.

Suppliers are waiting to help …

Technology and application suppliers are willing collaborators in bringing cloud based applications to insurers.  Writing in this space in January, Guidwire’s Eugene Lee provided an outline of a business case for ‘hybrid’ cloud applications such as Guidewire live.  And we reported on the innovative insurance applications that are starting to emerge based on, the prototypical cloud platform.

There are some caveats …

Nothing in technology is perfect (say it ain’t so!).  There are legitimate concerns about security, for example.    However, Burger writes, “as insurers recognize that agility is attainable and use of cloud and hosted systems becomes more about strategy and less about cost-cutting, security will become an operational issue, not a barrier to adoption.”

What do you think?

Are cloudy applications or services in your organization now, or imminently on the horizon?  If so, what are the business case elements?  And what are you seeing as the results.

If you’ve looked at clouds, and made a decision to reject or wait, what are your concerns?

Leave your comments below.  As they used to sing in the age of Aquarius: Let the sun shine in!

Note:  A number of presentations at #ICTC2014 will focus on agility, innovation and alternate delivery of services. 

One Comment

Comments are closed.