Cloud implementation is driven by business requirements, but the business needs to align around its purpose.
The benefits of cloud computing are being enjoyed by a growing number of P&C insurers of all sizes. Transforming the way organizations purchase and manage computing resources, cloud or SaaS in essence provides a different IT model, one in which the insurance technology services provider might be responsible for a range of IT activities such as software installation, upgrades, maintenance, etc. But lowering operating and maintenance costs, along with IT capital expenditures, are but some of the benefits: As an insurer’s IT activities generally associated with developing, procuring, administering and maintaining in-house IT infrastructure are shifted to the technology services provider, its resources can be redirected toward core business activities, turning cloud computing into an IT-related strategy for competitive advantage.
Some argue that in spite of these benefits, however, insurers face obstacles in cloud adoption and implementation, chief among them a lack of organizational alignment ahead of implementation, especially the typical rapid implementation cycle of cloud-based solutions.
Among the many symptoms of this lack of alignment are an uncoordinated adoption by enterprise stakeholders, the lack of information and education made available about potential changes in workflow and access to critical information, and a potential lack of understanding between the organization and the technology solution services provider about the implementation’s scope of services. The result is a lack of optimization and the inability to fully realize benefits or related competitive advantage when cloud services fall short of expectations.
“It’s more than alignment of resources,” says Andy Scurto, president of ISCS, a provider of a modern core suite of applications for property and casualty insurers. “It’s a matter of educating from the bottom up and the
top down what cloud can do for the organization.” Scurto recommends having champions assigned to groups of stakeholders from different functional business units—all those who will come into contact with the new system—and have discussions around any pending changes in workflow, data access and security.
“When we talk to our customers about ISCS’s SurePower Innovation® modern platform offered in the cloud via ISCS’s SurePackage™ option, we tell them that it’s important that the organization be involved as part of the cloud solution,” says Scurto. “We recommend a set of best practices around change management that can be followed and tracked in the long-term.”
In addition, cloud implementation approaches “must be holistic and strategic—taking into account the full technology lifecycle and the need for organizational transformation,” say Ashish Garg and Michelle Lynch, with EY’s insurance practice, in a recent white paper. “Cloud in this sense is not a single event or project, but instead becomes ‘a way of life’ in managing insurance operations.”