Most insurance CIOs and IT leaders have grappled with the build-or-buy question as it relates to software. But the thornier and possibly more important context for the question is how it applies to IT talent.
Executive SummaryInsurance companies need to think about IT talent the same way they think about software platforms—not as point solutions to fill immediate needs—and to approach the task holistically to provide their organizations the functional richness, agility and responsiveness to changing market conditions and organizational needs over time, says X by 2’s Frank Petersmark.
Any IT leader worth his or her silicon understands that while software, hardware and processes are important, having the right people is truly mission-critical. How mission-critical? In the long term, having the right people is the key difference in the relative success rate of a CIO or IT leader. Everything else—software, hardware and even process—comes and goes. Having the right people to make sure it all comes together in the most optimal manner should be the thing that CIOs spend more time on than anything else.
Surprisingly, however, it’s often given short shrift by IT leaders, leading to resource churn, customer-relationship and service disruption, and scarce energy cycles being burned on people problems as opposed to more critical issues.
And if all of that wasn’t a compelling enough set of reasons to focus on how to answer the people question, the market for IT talent has heated up significantly, which makes finding and keeping that talent even more problematic. A survey by research firm Celent indicates that more than 150 property/casualty insurers and nearly 50 life insurers have purchased, licensed or otherwise invested in modernized core systems just in the past two years. By implication alone there’s a lot of IT talent required to handle that load.
So, in this ultra-competitive IT talent landscape, what should a CIO do?
Most organizations have programs in place for retraining their current IT staffers on many of the more modern platforms. As those who’ve been through this cycle—employees and managers—will no doubt tell anybody willing to listen, this is a hit-or-miss proposition at best. Additionally, many organizations have created intern and feeder programs with local universities, exposing computer science students to work on insurance-based software in insurance companies. Again, the results appear to be mixed in terms of successfully cultivating and retaining talented long-term employees.
A third approach is the more traditional one of utilizing internal (or external) recruiting resources to identify, match and recruit experienced IT people who fit the organization’s needs.
So for better or worse, the answer to the build or buy question for IT talent is actually yes. Both have to be done, but with a twist—and that’s the tough part.
The twist is that insurance companies have to begin to think about IT talent the same way they think about software platforms. That is, not as point or best-of-breed solutions to fill immediate needs but rather as a holistic approach to providing the organization the functional richness, agility and responsiveness to changing market conditions and organizational needs over time.
It’s the same thing for IT talent, and that’s why a combination of build and buy is the best approach. This allows IT leaders and the recruiters they work with to identify the kinds of people who bring fresh talents and perspectives to the organization but also have the characteristics and capabilities to grow and adjust along with the organization. Likewise, if you’re lucky enough to recruit and hire top young talent, there’s an opportunity to cultivate some of them into the next generation of IT talent and leaders for the company.
That’s a tall task for sure, as one of the big issues the industry faces is modifying its collective image so that it becomes more attractive to young IT talent. Let’s face it, the insurance industry will never be able to compete with Google, Apple, Amazon, etc., in the coolness category, but what it lacks in coolness it makes up for in financial stability, job security and management opportunities.
Insurance employers need to emphasize these things as strengths while at the same time working to create environments that are more conducive to acquiring and retaining young IT talent. This doesn’t mean that insurance companies need to have pool tables and gourmet chefs in every building, but it does mean that insurance IT and other management need to be open to the needs and desires of a new demographic of IT talent. After all, today’s kid is tomorrow’s leader.