The last flight of the Concorde supersonic airliner, which took place last month, wasn't just the end of an era. The 27-year history of the Concorde can also be viewed as a cautionary tale for insurance technology decision-makers, as it illustrates the difficult balancing acts that challenge today's CIOs. Here's the question: Was the Concorde a good-but-misunderstood idea ahead of its time, or the ultimate technology in search of a solution? Does it represent the need to encourage innovation and risk-taking, or is it a prime example of the necessity of strict governance processes?
Consider this, from the pilot of the last transatlantic Concorde flight: "Concorde was born from dreams, built from vision and operated with pride." Very nice, but where's the business case? It's not just that vision and pride aren't enough in today's world of tight budgets, governance and metrics. It's also that there was seemingly no thought of solving a real-world problem (e.g., improved safety/security). The fact that a round-trip ticket cost more than $10,000, and that only 14 planes were ever sold, says it all.
Concorde's demise also stemmed from the initial failure to consider factors such as public resistance (from environmental/noise concerns) and rising fuel costs, or the latter-day economic and security worries that have cramped the travel business. This is a lesson for any CIO who still thinks technology merits outweigh business considerations.
And yet...today's most successful airlines, such as Southwest, Virgin and Jet Blue, have taken risks and confounded the conventional wisdom of their industries, while the established players flounder. That's perhaps the biggest lesson for insurance technology executives. It's not about avoiding risks. Rather, success depends on taking the right risks. As Air France and BA know, that's easier said than done.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio