Working to Be Smart

Because of the niche nature of insurance, consultants often rely on generic technology platforms developed for industrial applications and attempt to modify and, in some instances, “force fit” such platforms into adaptations for insurance and risk management. In addition, the core competencies of IT consultants and vendors usually are technical rather than management services. As a result, consultants and vendors may not be able to adequately customize the technology, such that it adds necessary value to an insurance underwriting/risk management application without specific direction from the end user.

However, one underlying tenet should inform insurance professionals in managing the IT application process: The service need must drive the technology.

The right reasons

Too many insurance professionals opt into technology for the wrong reasons. Here are some examples: Firms are dissatisfied with their conventional practice modes. Service costs keep rising relative to the value of the service provided. Technology is pitched as the route to a better way.

The technology message is especially alluring when it is packaged as a new service paradigm; i.e., “e-business”. E-business is a seductive proposition with an attractive buy-in opportunity. It seems to allow you to keep up with the trend to go high-tech. However, because you’re also walking away from a problem, the full dimensions of which you do not fully understand and appreciate, you may be uncomfortable with it as a solution. In contemplating an IT purchase, remember:

IT is not a neutral force;

Careful selection of supporting technologies and vendors is crucial to long term success, interoperability, and support;

New IT solutions should work seamlessly with your existing systems and technology platforms;

Avoid becoming tied too closely to a single vendor. Ensure that IT solutions provide alternatives and are based on open systems;

IT should fit the service need to be an effective solution;

IT requires knowledge management in its application in order to add value to the legal-services mix;

You can’t manage what you don’t understand and are uncomfortable with;

The first step in learning to become comfortable with technology is to become knowledgeable about that aspect of the service need that is at issue;

Develop or buy into, as the case may be, the application of technology that has the potential to add value through an identifiable application.

IT management void

Most technology that is supplied to insurers comes with user-support packages that focus on training on “how to do” at the expense of “how to manage”. There often is a team of vendor-supported technicians who show up to do the installation. This on-site training has been developed by vendors for technical support people. The rationale is that managers are too busy to get involved in the mechanics of making the technology work. Unfortunately, it is then left to the technicians to teach the professionals how to work smart with the technology in a strategic management context. But the technicians lack the competencies to provide insurance professionals with this level of training. This means that insurance professionals must take a service solution approach to technology innovation. A service solution encompasses the following parameters:

An identifiable link between a fully articulated service need and an efficient response;

A strategic management component that represents a value-added solution;

Knowledge management capability in application by service providers that go beyond technical support and facilitates decision-making and best practices by the user.

But how do insurance professionals with management responsibilities, who are admittedly starting from a zero knowledge base, articulate their own technological needs? How do they become more astute procurers of technology? There are two simple ways:

Join user groups in which peers share learning experiences;

Engage professional services strategists knowledgeable in e-business.

Beyond those, there are evaluative judgments to be made that will help insurance professionals buy the right tools for the job, regardless of the job.

The Domain

Every piece of computer software is designed to fit within prescribed application parameters. These parameters are known as the software domain. In simple terms think of the domain as the ballpark. Software is designed to play in designated ballparks. What you need to determine is whether you and your software are in the same ballpark before you start playing with it. You do that by looking at the following three characteristics of a domain:

Specificity.

To what degree is the software custom made for a defined application?

To what degree does that specificity help or hinder your service mission?

What degree of flexibility is provided to ensure that a system can be properly modified to meet your business needs without incurring tremendous consulting and development costs?

To what degree does the domain bring you closer or, in the alternative, isolate you from the domain that dominates your customer base?

Stability.

Where on the learning curve is this software?

Is this new and untested?

Does it operate effectively on multiple platforms ensuring platform flexibility?

Has the vendor assured a high degree of availability to ensure that the system will always be operational when needed?

How stable is it in every day applications?

Does it require a lot of vendor support once it is installed?

Is it mature to the point of being on the verge of requiring a major upgrade or replacement in the near future?

Evolvability.

Does the software have the capability to grow smoothly with routine add-ons?

What is the software vendor’s typical release cycle for introducing updates?

Is the software built on true web technology so that it can provide a high degree of ubiquity and facilitate quick installations and upgrades?

How well does the software integrate with and support standard formats and protocols such as UTBMS and LEDES?

What’s its historical evolution pattern?

What are its future prospects as either a standard or a compatible piece of software for the legal services market?

Under the hood

There also are four e-business questions you should address at this level:

Platform viability. How established and open is the underlying technology platform? In an Internet-centric business world, it is imperative that software runs within a standard web browser and has the ability to operate without software plug-ins and applets that may impact system performance. Is the platform multi-tiered to provide high performance and scalability?

Time to rollout. How long does it take to install the operational platform? How long will it take to bring in-house personnel up to speed? When can the software be assumed to be capable of being fully operational without the need for beyond normal vendor support? Again, a pure web technology is best to facilitate rapid deployments of new software and ongoing upgrades.

Legacy systems migration. It is a rare occurrence when you can literally pull the plug on an existing system and replace with a new one. In the great majority of instances, there must be a phase-in period in which the new software must function in a legacy environment. What is the nature and extent of that legacy and what is the coping capability of the new software? How seamlessly does the software integrate with existing legacy systems? Are open standard protocols and formats fully supported, or is the solution vendor centric?

Scalability and availability. Make sure that your technology solution has been designed to accommodate future growth and emerging technologies. Make sure that your technology vendors have a record of quickly adapting to new and emerging technological advances and have open platforms that do not restrict growth and scalability. Emerging technologies are based on clustering and redundancy to provide systems that are always available when needed by providing real-time fail-over to duplicate systems
. Insist on solutions that take advantage of these technologies.

Strategic for end users

The bottom-line on technology for end users is that it is not a technology issue. The application of technology to business is a strategic management issue. Managers with technology mandates must learn to manage what is in essence a process with a technology twist that has been thrust upon them by an e-business paradigm. Process management is a competency that all managers possess. What they must do when confronted with a technology issue is to treat it as one more process and manage it accordingly. In doing so they will be working smart with technology.