THE KEYS TO BUSINESS MANEUVERABILITY

The insurance industry has never been known for its ability to respond quickly to change, but it is increasingly being forced to do so. Carriers are facing intensifying competitive, economic and regulatory pressures, demanding greater agility from supporting systems. But while often rigid and monolithic systems present a significant barrier to optimum maneuverability, technology is only part of the problem.

Moribund business processes and intractable organizational cultures and structures are even more to blame, and underlie much of what at first blush appear to be IT-related issues, opines Judy Johnson, vice president of insurance strategy, Sapiens Americas (Research Triangle, NC). "Even organizations that are open to change face a continually moving target, so it becomes easy to see why entrenched organizations can become nearly catatonic in their attempts to respond to market conditions," she says. "While new and not-so-new technology applications are coming to the fore to assist with the business process identification, documentation and transformation, the core issue is not technology. It is the ability of senior management to understand, demand, communicate and champion change in the organization. An organization that isn't 'change ready' is not maneuverable."

It should be emphasized, Johnson says, that technology organizations need to thoroughly understand the challenges faced by business in order to best play their part in the solution. The following checklist, authored by Johnson, identifies the salient characteristics of the maneuverable insurance organization.

BUSINESS MANEUVERABILITY CHECKLIST:

1) Value based products and services: To provide value, tune the organization to external issues and messages.

2) Availability and transparency of information: Understand and focus on the information that matters to your customers, channels, and customer-facing functions and personnel.

3) Consumable external data feeds: Inform all but the most mundane business processes with key data from the outside world.

4) Channel and customer feedback loops: Actively seek to obtain, analyze, absorb and act upon your customers' needs and desires.

5) Configurable IT infrastructure: Componentize and rationalize the elements of your IT infrastructure, limiting the number of overlapping systems, processes, and functions.

6) Pervasive "good enough" versus "perfectionist" culture: Continuous market and technology change dictates a pragmatic approach to IT. You are no longer building for the ages. Look for minimally acceptable quality and go on from there.

7) Flexible, entrepreneurial organization: In today's fast-paced world, functions, priorities, and accountability may alter. Do not tolerate fiefdoms or turf wars.

8) Collaborative processes based on externalized business rules: Business rules must reside where they are available to all members of the value chain (customers, channels, partners, suppliers) and open to change.

9) Focused business model: The days of "all things to all people" are dead. Hone your book of business to fit within your core, operational capabilities.

10) Configurable applications and systems: Core processing applications and key supporting systems must be changeable without extensive programming delays.

11) Robust business continuity planning: Plan for events that could affect the ability of your enterprise, channels, partners, and customers to function normally. Appoint a key executive to manage operational risk.

12) Ability to partner: Partnerships allow organizations to scale and respond to directional changes. Communication and collaboration is key to managing these dynamic relationships.

You can read more about business maneuverability in the upcoming cover story in Insurance & Technology's March 2003 issue, which will be available on the Web at www.insurancetech.com .

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio