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Insurers that move to multi-speed IT will be able to launch new products more quickly and respond faster to emerging business opportunities and threats. Here are four essential steps to making the switch.
Transforming traditional IT organizations into multi-speed environments, which deliver information throughout the enterprise when and where it is needed, is far from easy.
The benefits of multi-speed IT, however, are substantial. Insurers that adopt a multi-speed IT strategy are better able to harness the potential of their digital and legacy resources. They’re able to launch new products more quickly. They can also respond faster to new business opportunities and threats.
To successfully shift to multi-speed IT, insurers need to follow four essential steps.
- Carefully assess the IT requirements of every component of the business and identify the different speeds at which IT services are consumed. Align IT resources with the future needs of the business and ensure they can match the pace of anticipated change. Where rapid change is required, adopt agile systems and application delivery approaches. DevOps, for example, accelerates change by continuously integrating and testing new code. This enables production systems to be constantly updated without being disrupted.
- Introduce multiple governance methods to manage the many different modes of IT operations. Agile and iterative methods can be employed to address digital environments where there is rapid change. Traditional top-down approaches are well suited to large, complex systems of record. By using multiple governance methods insurers will be able to make strategic IT changes that keep pace with the demands of the business. Agile governance frameworks must be able to accommodate third-parties, such as IT service providers and ecosystem partners, and integrate them into the multi-speed change environment.
- Re-examine IT architectures. Segment the technology landscape into multiple speeds that are aligned to business consumption and the pace of change. Simplify the legacy architecture to improve agility and reduce costs. decouple enterprise architectures. Service-oriented architecture (SOA) and business process management (BPM) capabilities must be distinct and discrete. Enterprise architectures, with simple, self-service layers and unified processes and development components, can be re-used throughout the enterprise. Modernize current applications by using application programming interface (API) layers to expose core data sources. Few organizations have robust API strategies or frameworks.
- Invent a new IT organization. Develop an IT operating model that is more closely aligned with the objectives, governance and change-capabilities of the business. Identify the skills and talent required to implement a multi-speed IT environment. Key skills are likely to include DevOps, SOA and API expertise. Major cultural shifts will need to be addressed as IT workers will be required to deliver agile “fail-fast” digital offerings alongside complex, highly secure legacy systems. They’ll be expected to develop innovative solutions that apply emerging technology to enhance the performance of the business. IT workers will increasingly need to work closely not only with other staff elsewhere in the business but also with representatives from third-party service providers and ecosystem partners.
While the journey to multi-speed IT looks arduous, the increase in performance and flexibility it will provide insurers is certainly worth the effort. Carriers quick to recognize the potential of multi-speed IT will not only resolve the tension that often exists between their digital and legacy resources. They’ll also secure significant competitive advantage. Insurers slow on the uptake are likely to struggle to catch up.
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