(Editor’s note: This the sixth installment in a series of six articles. Please see below for links to the previous installments.)
Academic research dissects innovation in many ways, quadrants, horizons, layers and structures of all sorts. However, innovation in itself is a very simple concept at least in the insurance industry and its related technologies. It should be aimed towards finding new, enhancing existing or adapting proven products, tools and techniques to increase revenue and improve profitability. That’s the goal, the bottom line and the sole purpose why an insurance technology department should be engaged in innovative solution research and development. The job for the CIOs and their leadership teams should be to define innovation-related needs in close collaboration with the business, to allocate resources, to drive the culture and approach innovation as a comprehensive set of activities pushing the boundaries in all three major categories of work the IT embarks on:
- Improve the current technology set and the processes it enables. This activity consumes most of the innovation efforts. The skills required here are different from those that apply to the following areas;
- Adopt technologies that are well-understood and available in the market but not currently used in the organization today. The barriers to enter this level of innovation are relatively low and it can be done at a reasonable cost.
- Explore new technologies that open new markets, new prospects that have a tendency to disrupt the market and supercharge the current performance levels of the organization.
The quantity of resources and effort allocated to each of the above approaches to innovation depends on the organization size and type, its state of maturity and its particular culture. It is the job if the CIO and his or her leadership team to determine the balance across those areas, and then allocate ample resources for developing a comprehensive innovation program that aims at the proper pace and amount of change across the entire technology ecosystem. Through that kind of a managed innovation program, the CIO will be a true strategic partner in preparing the company to navigate a changing marketplace, and deliver value that will measurably impact the top and bottom line.
Editor’s Note: Click the links below for the previous installments in this series: