Look on the bright side! Half the battle of deploying new technology is openness to exploring new technologies and improving business processes. Never before has great technology been in more abundance.
Insurance company executives are taking notice and actively evaluating the possibilities. It is not just about the technologies. In this "better, faster, cheaper" world, executives are also changing methods of deploying technology.
Great innovations of our time include Web services, business process management, straight-through processing, content management and the digitization of paper.
A major trend in deploying technology is the offshoring of application development and maintenance with onshore/near shore/offshore models. As we know, no technology or vendor is perfect. However, one must admit that more tools and processes are now in place for insurance executives and their information-technology teams to craft better business solutions than at any time in the past 30 years.
Web services have allowed underwriters to go direct to the market and to develop new or more effective distribution channels. Many carriers have developed customer and agent-specific portals to provide product information, advertising and claims reporting, and interfaces into company systems for communications and transaction-based processing. Insurance executives know that to be competitive they must drive to everything Web. The good news is that everything today is being built for the Web.
BPM technologies wrap legacy systems with new functionality without the expense of re-engineering or replacing core applications. There are characteristics of straight-through-processing, automated workflows, business-rules engines, content management and other services embedded in the tools provided by BPM providers.
BPM implementations produce significant improvements in workload capacity or workforce management--as much as 40 percent.
Most recently, IT managers are utilizing BPM tools to modernize legacy platforms and reduce the footprint of large legacy core applications. This allows them to convert those applications to large data repositories, leaving functionality to BPM front-office and back-office applications in J2EE or .Net architectures.
Today, regulatory mandates are frequently driving changes in content management and document imaging. It began with the Sarbanes-Oxley Act, but regulators are increasing requirements for all publicly-traded companies to improve their operations for stakeholders.
This includes the new e-Discovery federal regulation requiring defendants in litigation to produce documents for plaintiffs' counsel. The regulations require that counsel be furnished with specific information quickly in the proper format with steep penalties for noncompliance. Then there is the matter of how insurance companies are developing the skills for these technologies. How long does it take to train employees? What is the impact of retiring employees and turnover? How is cost contained? Who can companies collaborate with to implement technological improvements?
Many companies are responding by developing relationships with offshoring firms, most of them located in India, or with domestically-based companies with foreign resources. Others are developing relationships with outsourcing firms or boutique technology providers, as well as emerging companies in Western and Eastern Europe, Asia and Latin America.
Since the Y2K scare, this has become a phenomenon in the United States. While none of these vendors fit all their clients' needs, most of the Fortune 500 organizations are collaborating with at least one of these offshoring organizations for technology services.
Outsourced value propositions are many, but insurance executives are encouraged to develop their own analysis to determine what is best for them. There is no denying that the innovation dam has already burst. Now is the time to ride the new technology wave!
DENNIS A. STECKLER, J.D., is senior solutions architect with Patni Computer Systems Inc.
To get the other side of the issue, read the "Counterpoint" by Judy Johnson.
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September 15, 2007
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