Is the CIO Losing Control of Tech Decision Making?

According to IDG's Enterprise Role & Influence of the Technology Decision-Maker Study, no less than seventeen people are now involved in influencing major enterprise technology purchases, compared to just ten in 2011. That's a huge shift in the dynamics of how business needs are determined and tech investment decisions are made.

But what roles does this widening group of influencers have, and what perspective do they bring to the decision making process? Whose demands take precedence and how should the new IT audience make themselves heard?

The economics of technology no longer refers solely to ROI on technology investment. And so called "legacy" technology is no longer a strong enough justification by itself for change, because it mostly still "works."

Craig Robinson, Xuber

Change is triggered by its ability to drive business agility and not just efficiencies and lower costs. Definition of the "business case" is firmly on the agenda as technology investment decisions are increasingly talked about in many more offices than that of the CIO.

Maverick or champion?

As organizational departments (e.g. claims, underwriting, accounting, internal audit, etc.) become increasingly dependent on technology, the heads of these departments have become more aware of the importance and role of technology in everything they do. They have naturally become more involved in the technology investment decision making process, facilitated in no small part because:

• Insurance software vendors now approach department heads directly with targeted messages relating to their specific pain points.

• Social networking enables peer groups to share successful applications of technology that solve specific problems.

• Insurance technology itself has become componentized, enabling heads of departments, who may potentially feel neglected by IT, to explore and implement new technology in isolation.

When left unchecked and unaligned with overall business goals, decisions made by department leaders can have downsides, including loss of economies of scale, poor compatibility of inter-department systems and duplication of effort.

Knock before you enter

In parallel, CIOs and CTOs within large organizations may have been guilty of not wanting to part with their sole responsibilities for steering the technology agenda for the insurance enterprise. Their doors may have seemed closed to the cries of department heads with needs to solve specific problems. CIOs may be failing their enterprises, however, by not leveraging the combined knowledge and understanding of customer value often held by department heads.

In addition, insurance software vendors often see CIOs as gatekeepers to the wider needs of the business, and try tactics to circumnavigate their role. In doing so, they widen the disconnect between business line and department heads and their internal technology leaders.

[Previously from Robinson: https://www.insurancetech.com/architecture-infrastructure/finding-harmony-in-global-insurance-syst/240166334]

Fundamentally, as technology decision making becomes so much more linked to the needs of the customer, CIOs and heads of departments need to work closer together in a community that leverages – and acknowledges – each other's skills and knowledge to mutual advantage and to the greater good of their organization and customers.

Easier said than done? Here are five steps that might help:

1. CIOs need to work collaboratively with managers to translate the benefits of retaining and growing customers using efficiencies afforded by new technologies. Department heads hold an inherent knowledge of "customer value" – vital intelligence that is critical to building the business case for change.

2. Business leaders and department heads need to be proponents of the art of the possible. But it's not necessarily all blue sky thinking – CIOs have an intrinsic role to play in listening to the needs and wants of departments, keeping them abreast of new technologies and involving line managers in the evaluation process to determine if the possibilities make overall business sense.

3. Today's insurance customer demands that insurers have an aligned picture of their needs, and this is only possible with departmental technology that integrates seamlessly across lines of business. CIOs have the skills and the knowledge to ensure that business-driven technology requirements are aligned companywide. They can manage the holistic technology picture while listening to and satisfying the micro-level needs of departments.

4. Many enterprises are looking to create a new breed of business change agent – forming a function that straddles IT and the business to objectively channel change in line with business goals. Often spawned by business leaders, such delineation between the two functions of IT and heads of departments creates a strategic yet neutral ground to explore the business value afforded by technology.

5. To get the most value from an IT vendor, choose to partner with those that don't just interface with IT decision makers. Service providers need to be able to help insurers articulate and prove a solid business case for change to support investment decisions, and this requires a detailed understanding of business unit needs. They should be able to share a blueprint to lower the risk of change.

The widening IT audience is not a hindrance – it's a clear advantage that will serve insurers well for those that foster an environment of collaboration and mutual understanding. By breaking down the walls between IT and departmental heads, business change is possible in unison and with agility, leveraging technology as a core enabler for growth.

About the author: Craig Robinson is head of business development, North America at Xuber. He has also worked at StoneRiver, Sherwood International/Sunguard and ReCapital, General and National Reinsurance companies and has more than 30 years’ experience in the reinsurance software market. He joined Xuber in August 2013 with responsibility for pre-sales, partner relationships and support for product development.