Tag Archives: cloud computing

How to Mitigate Cloud Computing Risks

Of late, cloud computing adoption has gained such traction enterprise-wise that it is rightly called the new normal. The 2019 State of the Cloud report by RightScale shows that 94% of organizations use cloud, shifting their corporate workload there. High costs are for now the greatest concern for cloud adopters, but organizations work on tackling it, either on their own or with the help of Google, Microsoft or AWS consulting specialists.

Despite being welcomed by most, cloud computing is still associated with plenty of complications and threats that haunt adopters and skeptics alike. As a result of persisting misconceptions, some enterprises adapt ill-suited cloud policies and practices, while others abandon cloud migration at early stages or steer clear of it altogether. 

This article will take a closer look at the top five cloud software risks and examine the ways enterprise decision-makers can contain and manage them.

Data security loopholes

Security concerns are the main reason why cloud computing becomes a no-go option for some companies. This consideration particularly inhibits industries handling sensitive customer data: Banks, medical facilities and such can’t afford a single data breach and therefore by default opt for on-premises software.

But these fears are exaggerated. The strength of security boils down to the measure introduced into a corporate environment. Cloud security provisions indeed differ from on-premises ones, but, when enforced correctly, they render the system impregnable.  

See also: Cloud Computing Wins in COVID-19 World  

At the same time, the cloud beats on-premises systems when it comes to compliance with data privacy and security regulations. Since cloud solutions must adhere to every legislative change, the vendors make the effort to update their software timely. On-premises security measures, on the other hand, are taken by each enterprise individually and may be insufficient or timed poorly. Therefore, cloud software can facilitate full compliance for businesses required to follow the GDPR, HIPAA and other regulations.

The prohibitive cost of ownership

Enterprises tend to adopt cloud computing to optimize costs but do not necessarily achieve the desired results. Cloud software is commonly known as a cheaper option because the adopter does not incur implementation, maintenance and security costs. In reality, hidden incremental costs do pile up. 

So, how to estimate whether a cloud solution will indeed be cost-effective?

First off, the responsible parties should factor in the enterprise expansion in the foreseeable future. Because SaaS, PaaS and IaaS licenses directly depend on the number of users, the workforce growth will force subscription prices upward. 

Availability of IT resources is another significant part of the equation. When the company employs a full-time development and support team, then the maintenance of on-premises software should not become a large cost component. If this is not the case, cloud software is a more reasonable option. An outsourced cloud-savvy team can easily cover the demands of initial customization and occasional support, while the updates and patches will be the cloud vendor’s responsibility entirely.  

The final consideration is the time gap between the project kickoff and the moment the software starts bringing value. For companies looking for quick ROI, cloud solutions offer a much shorter time to market compared with traditional on-premises setups.

Software discontinuation

Another of cloud adopters’ fears is that a vendor may all of a sudden go out of business, taking along the product. The possibility of software discontinuation indeed exists, but this is not as common an occurrence as one may think. Oftentimes, companies abandon the software, either cloud-based or on-premises, that grew outdated in the modern technological context and therefore ceased to be valuable to its users. In this case, the customers are alerted well in advance and given enough time to find a substitute. 

To mitigate the risks of possible cloud platform shutdown, companies need to take precautions against vendor lock-in and associated disruptions:

  • Map out an exit strategy before subscribing to a cloud-based product.
  • Study the contract carefully to clearly understand vendor obligations.
  • Maintain data in easily exportable formats.

Management complexity

Hybrid and multi-cloud environments are notorious for bringing confusion into the enterprise setting. As companies take more and more of their workload to the cloud, they sooner or later find themselves unable to fully govern the spiraling infrastructure and ensure its security. This can result in the failure to realize the full potential of the infrastructure, as well as in performance botches, security lags and above-budget spending. 

However, proper planning undertaken way ahead of multi-cloud adoption can greatly mitigate such downsides. Starting from the solution architecture and network topology to interoperability mechanics, the environment should be laid out by experts.

Apart from this, a cloud management platform can provide better visibility across multiple accounts, along with cost and security control. 

Weak connection and network failure

Ironically, the very thing that makes the cloud possible — internet connection — causes most problems in a cloud environment. Cloud outages strike enterprises large and small and cause data and money losses — in 15% of cases, over $5 million per hour of server downtime. These connectivity issues have a particularly damaging impact on hybrid cloud adopters, which rely on unhindered connectivity for unlimited data transmission between different cloud platforms and enterprise data centers.  

See also: Cloud Takes a Starring Role  

Despite being such a thorny aspect, internet connection still has the status of a no-man’s land. On decision-makers’ side, connection tends to be overshadowed by other seemingly more pressing matters such as security, compliance or interoperability. What is more, there is still no consensus about who should take full responsibility for cloud outages—the owner or the service provider. While 65% of businesses rely on cloud software providers for recovery and continuity, according to the Forbes Insights and IBM survey, less than half of them have confidence that vendors would meet their SLAs in case of emergency. 

In reality, both the business and the vendor should be accountable for network connection and data recovery. While the latter has its side of the bargain to deliver on, enterprises might well take a more aggressive stance on cloud uptime provision and immediate network recovery. Thus, employing a single network manager to provide for connectivity now can spare you from hiring a whole emergency support team later.

Challenges, not risks 

Cloud computing is a very young technology that is as attractive to potential adopters as it is intimidating. However, when examined closely, cloud-related risks are reduced to surmountable challenges.

For each of the “risky” aspects — security, cost of ownership, vendor lock-in, management difficulties and connectivity maintenance — the maturing industry is coming up with appropriate solutions. Cloud service providers also recognize the imperatives and fears of today’s enterprises and work to bridge the existing gaps, be it GDPR-compliant data processing or direct connectivity in hybrid clouds. Therefore, one may expect cloud software to become a more sustainable and safer option for enterprises in all verticals.

Cloud Computing Wins in COVID-19 World

Through the countless discussions that have occurred these past two weeks with many insurers, there have been winning strategies that have shone through as insurers have been executing their business continuity plans. And there have been certain challenges on the other side. Were you a company that needed the support of people to be in the office to “load the tapes,” making sure all those batch jobs on the mainframe computer kept running? Did you have challenges making applications available to your now-remote workforce? Were your call centers still able to fully support agents and policyholders?

One of the greatest successes in this market has been the performance of cloud computing. I remember, back in 2012, discussing the advantages of cloud computing. As an industry, there was just experimental acceptance of this capability – usually relegated to sandbox environments and testing. Jump forward to 2020 – and we see that 84% of all core system buying transactions were cloud-based. Not only have we leapt forward in our use of cloud, but we are now in mainstream acceptance that core systems – some of the most critical systems in the enterprise – are being commonly deployed in the cloud.

Let’s consider for a moment some of the advantages of systems that are deployed in the cloud – just to name a few that have been experienced over the past two weeks:

  • Cloud provides a virtual computing environment that also enables virtualized managed services.
  • New environments can be created to dynamically test changes.  
  • Access is available – for all that need to use the applications regardless of physical location.
  • Cloud decreases the need for “onsite” resources – elimination of tape loads, etc.

Investments that insurers continue to make to transform their organizations are bearing fruit today (even though we do not want to have to go through a pandemic to realize this truth). The digitally enabled experiences that insurers are providing to their customers and distribution partners are critical. Never before has it been more important to provide full transparency to the customer. For some, you are experiencing the world as it was before COVID-19 – a world of transformation that was moving forward, understanding the importance of the digital experience, and looking at ways to provide these capabilities. Today we are in a state where these digital experiences are a reality.

See also: Will COVID-19 Disrupt Insurtech?  

If the events of the past few weeks find you considering cloud deployment for your applications moving forward, refer to our recent research report, Cloud and Core Systems: Top 10 Strategic Considerations, for insights on buying cloud-deployed software solutions. Cloud will be one of the levers that insurers can use to meet the digital mandate that is no longer for the future – but is here today.

5 Ways Cloud Helps With SME Insurance

In the past decade, a number of organizations have adopted cloud technology. As reported by Forbes in 2018, 83% of enterprise workloads will be in the cloud by 2020.

The benefits of the cloud become especially valuable for SMEs (small-to-medium enterprises) without the infrastructure to support their own systems, let alone the staff to dedicate 24/7 to uptimes. Cloud computing allows insurance SMEs, including brokers and smaller carriers, to offer enterprise services without the overhead.

Cloud opens the door to digital systems without constraints. Cutting-edge tech used to be reserved for large organizations with the funds and capacity to deploy, manage and maintain their systems. It’s is now open to organizations of all sizes through the cloud.

Here are five ways cloud-based systems allow insurance SMEs to become more competitive:

1. You avoid costly up-front investments

One of the most limiting factors for the growth of a small business is the up-front capital to invest in competitive technology. Traditionally, engaging on the same level as enterprise competitors meant investing many thousands of dollars in infrastructure to support the technology of the day. Cloud computing companies generally bill month-to-month for the use of their infrastructure, which is more manageable for growing organizations. You rent rather than own. If you ever become dissatisfied with your cloud provider, you can switch.

See also: Cloud Takes a Starring Role  

2. You get the benefits of a built-in support team

Once you’re working on a cloud system, you get the benefits of an extended team. Not only does this reduce strain on yours, but it will also reduce your long-term IT costs. Depending on your contract, you won’t have to worry about the time, costs or staff required to make system upgrades or fix any hiccups in the system. Almost all cloud providers guarantee upward of 99.95% service level uptimes, which means their systems are always available and your clients will always get the services they expect. This will reduce strain, allowing you to better serve your clients and do what you do best.

3. You can lean on reliable security

Those same teams taking care of your system updates also work around-the-clock to ensure their cloud platform is secure. In addition to resources, cloud solutions bring to the table operational best practices and security standards, along with regular monitoring, patches and system fixes to ensure robust security you can depend on without added investments.

4. The system can scale to your business needs

As your organization grows and your software needs evolve, you’ll have an external partner whose system can grow with you. You won’t have to reinvest in new infrastructure to accommodate the needs for more storage or capacity. Cloud applications offer virtually infinite growth to meet the demands of your business and clients – at any size.

5. The cloud will drive innovation and offer better experience for your customers

Many benefits save money and time: two of the most critical factors in business. . The cloud makes it easy to streamline processes and can replace common tasks through automation and workflows. This frees employee time, allowing a better focus on innovation and customer service while you grow your business.

See also: Security for Core Systems in the Cloud  

Adopting cloud computing is a key way for smaller businesses to level the playing field with large enterprises and remain competitive in the insurance industry. Cloud can provide access to cutting-edge technologies and innovation without the burden of traditional IT costs.

Salesforce’s Ayan Sarkar

Ayan Sarkar, Global Head of Insurance for Salesforce, talks with Paul Winston, COO of ITL, about the launch of a series of insurance-focused solutions and services both within Salesforce’s Financial Services Cloud and in its Einstein Data and Analytics solution. The solutions, he says, are designed to help insurers and agents enhance the way they digitally engage with customers and deliver more personalized experiences, all from the ease of a cloud based solution.

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8 Key Insurtech Trends for 2019

The industry used to be a tech laggard. No more. Though there’s still much work to be done, most insurers are now better-positioned to capitalize on their investment in technology.

Here are eight key tech trends that continue to shape the industry:

  1. Greater stress on cybersecurity

An Ernst & Young security survey revealed that 59% of respondents had encountered a significant cybersecurity incident in their organization. Because insurers store so much sensitive personal and business data, they’re a prime target.

Cybersecurity strategy should be focused on proactive measures rather than reactive strategies. Cyber-crooks are relentless and inventive. Security has to be a top priority for insurers of all types and sizes.

2. Filling a gap in employee benefits automation

While group proposals and policy administration are both well-automated, between the two comes group onboarding, which has not been automated.

But solutions are being developed and implemented. Onboarding solutions will be built on automated data capture and importing. Data integrity is crucial. Employee information must be correct and complete when entered.

The solution must also offer robust data security and comply with privacy regulations to securely gather and store employee information. Flexibility is also mandatory because integrating onboarding closely with both proposal and policy systems is essential to efficient workflow.

See also: Connected Insurance Comes of Age in 2019  

3. Cloud computing

Cloud computing will continue to be adopted widely by insurers and insurtech providers as it is cost-effective, speedy and flexible. Cloud providers will continue to improve their technology to deliver sophisticated capabilities.

The security risks associated with housing data off-site via a third-party, however, can present challenges. While cloud storage companies are expected to protect data, ultimately insurance IT departments are responsible for their cybersecurity. That requires constant vigilance, hiring skilled people and spending enough money.

4. Internet of things and big data

IoT continues to become more useful. Insurers can use real-time data to meet and enhance business objectives. This can boost efficiency and revenue and promote better customer service.

As the Big Data revolution continues to expand, IoT adoption in the insurance industry is expected to grow. It will enable collection of data in real time, resulting in lower premiums for insureds willing to participate. There will be continuing adoption of connected devices for loss prevention and pricing in property-casualty, life and health insurance.

5. Analytics

Analytics can transform big data into actionable insights. As analytics and data science advance, insurers can better extract value from the huge amounts of data that now exist. Insurers can then leverage sophisticated information analytics to gain a competitive edge in the market.

For insurtech providers, there is a huge opportunity in the coming years to develop advanced analytical technologies that can make sense of unstructured data such as real-time video, social posts and live blogging.

6. Artificial intelligence

In 2018, more insurance and insurtech companies found effective ways to integrate AI. In 2019, companies will complement a significant part of their structured data decision-making with AI data analysis and decision-making.

Robotic process automation will begin to gain a wider application facilitating automation of repetitive processes across the entire IT infrastructure. Robotics and AI can offer improved productivity, shortened cycle times and better compliance and accuracy.

See also: How Insurtech Helps Build Trust  

7. Augmented reality

Augmented reality is starting to have a presence in insurance. An article by software development company Jasoren identifies several AR use cases, such as warning of risks, explaining insurance plans, estimating damages and increasing brand awareness. Alternate forms of AR such as virtual reality, mixed reality and extended reality are shaping how AR is being used.

8. Blockchain

The technology behind cryptocurrencies will be adopted for more promising applications. They include “smart” contracts and secure, decentralized data collection, processing and dissemination. While I do not expect to see a full-scale implementation of blockchain technology any time soon, many insurers and insurtech companies are launching projects and initiatives to test its applicability and effectiveness for insurance.