I wrote earlier this year about the impact of the cloud on the insurance business. The cloud is the basis for the rapidly evolving As-a-Service economy, which is changing the way insurance and other industries think about capital expenditures and technology investments in general. As a new study sponsored by Accenture and conducted by Hfs Research indicates, the move to the As-a-Service economy is taking place, but most companies do not consider themselves prepared for this new environment.
The study – based on interviews with more than 700 senior executives – found that 53 percent of them view As-a-Service as critical for their organization, yet 68 percent report that their core enterprise processes will not be delivered As-a-Service for five or more years. Companies in general – and insurers in particular – need to be ready for this switch sooner if they are going to remain competitive.
Among the study’s key findings:
- Analytics, automation and proactive intelligence are critical. Half of enterprise buyers (51 percent) believe having these capabilities today would have “massive impact.” These are necessary precursors to streamlined, high-quality data sets for analysis. Approximately seven out of ten buyers expect to make “some” or “significant” progress over the next two years around analytics and automation (69 percent) and proactive intelligence aimed at enabling employees to do more with data (66 percent).
- Senior leaders want change, delivery staff do not. More than half of service buyer senior leaders view As-a-Service as critical and 61 percent are ready to replace legacy providers in order to align with more visionary providers to achieve their desired end state. But these leaders need to motivate and enable their middle manager and delivery staff, as just 29 percent see the value of As-a-Service in the same way.
- Service providers recognize the importance of As-a-Service. Eighty-three percent of service providers view As-a-Service as critical. However, investments in robotic process automation (32 percent) and cognitive computing (24 percent) are surprisingly low considering the impact these technologies can have on efficiencies and results over time.
- Cloud holds the most promise for delivering new value As-a-Service. One in four buyers (27 percent) believe they will see significant progress from current investments in “plug and play.” Forty-four percent of senior executives would be willing to write off legacy IT investments and move straight to the cloud if they could find the right solution that gave them speed to value.
In my next post, I will talk about some of the ways that insurers can accelerate the move to As-a-Service delivery.