Insurers should advance beyond calculating ROI on a project-by-project basis and look to where technology can add equity value. That was the message delivered by Vincent Oliva, vice president, Gartner (Stamford, Conn.), at yesterday's ISOTech session "Business Value of Technology in Insurance," at the Disneyland Hotel in Anaheim, Calif. Oliva contends that shareholder value brought upon by the right technology decisions is gaining importance, especially in the wake of increased mergers and acquisitions.
Oliva pointed to Great West Life's (Winnipeg, Manitoba) acquisition of Canada Life as an example. "Canada Life was purchased for its technology platform," said Oliva. "That added equity value to the transaction. The smart technology decisions can add equity on the overall technology platform."
Laying out a roadmap to building equity through technology, Oliva advised business and IT leaders to "explore the technology touch points on the entire value chain at the time budgets are planned." The analyst also encouraged a focus on the status, cost, benefit and risk of technologies.
"Carriers must explore a technology's maturity and how it will interact with other technologies," he relates. Exploration of a technology's level of adoption is also important, remarked Oliva, who encouraged fast followers and said "first movers don't always have the advantage." Also, Oliva recommended carriers look for emerging technologies in unlikely places, saying that "emerging technologies aren't always new -- they may already be hiding in your arsenal."
Oliva also asserted that equity-building technology strategies require the involvement of the business and should entail a "separation of I and T." "Technology is the hardware part and that is owned by the technology side. The information part needs to be owned by the business," he explained. And although an implementation's benefit to the organization itself must always be considered, customer value needs to be present in order to justify a project's implementation. Argued Oliva: "If a project doesn't have a positive impact on customers it needs to be deeply considered, because without customers we would all be out of business."
In order to optimize the value a carrier's technology brings to its organization, insurers should also focus on their core competencies, advises Oliva, who said that "courage is my 'A, number-one' recommendation for insurers."