July 6, 2017
What Is the Major Barrier to Change?
by Denise Garth
There has been a significant shift in where the balance of blame lies. Core systems are now the wall of resistance.
Bringing change within any organization is hard to achieve. Arguably, the larger the company, the more complex and difficult the problem is. Add to that geographic and cultural differences, and the waters are muddied further.
Change encounters roadblocks. From the reticence of employees to change their working practices, to the difficulty of getting boardroom support on new market opportunities or ideas developed… change is challenging.
So why should we persevere? Because it is a matter of being relevant and competitive…and even ensuring survival.
See also: Change Accelerates in Core Systems
With the rapidly evolving and disruptive business environment due to changes in people, technology and market boundaries, the requirement to alter insurers’ internal and external engagement operational procedures has never been more pressing.
Most of us are familiar with the adage: “When change meets culture, culture invariably wins.” Perfect. When change doesn’t materialize or happen quickly, we can blame the lack of dynamism/imagination in the company, workforce or (laughably) our customer base.
For those working in or managing large, dispersed workforces, conveying a new idea is difficult at times, and bringing new ideas through takes time to get the full “buy-in” that one would ideally wish. However, during the last five to eight years there has been a significant shift in where the balance of blame lies. Yes, it’s hard to win people over initially. But they do come over eventually. It’s frankly impossible if the core business systems are not up to the task. Core business systems can become the wall of resistance.
There is a seismic change in the market dynamics, both internally and externally, in how we must engage prospects and customers. Prior to about 2000, most employees, prospects and customers were, at best, technology novices. The advent of the internet and the rise of e-business, coupled with the introduction of the smartphone, iPad and other innovative devices, rapidly altered the landscape forever, creating a new generation of digitally enabled individuals. Whether by adapting to digital technologies or being “born digital,” we entered a new age of insurance that is underpinned by modern, emerging technologies.
In this new digital age, everyone has access to digital technology in his or her everyday personal lives. Yet, for many, work life is a “trip back in time” due to old and frankly outdated systems. Green code-driven screens may have, for the most part, been replaced with graphical interfaces, but core systems are typically very long in the tooth and do not reflect the art of the possible.
But replacing these legacy systems is challenging. The insurance CIO bemoans the fact that requested work stretches out years into the future, keeping maintenance of legacy systems front and center; with the future vision no more than a vague dream. It is a major problem that cannot be solved as we did in the past, when we simply shifted more resources to maintain legacy systems.
The insurance industry, as a rule, is miles behind providing capabilities or convenience like an Amazon, Uber, various travel sites and even (heaven forbid) most banks. Although there are differences in the products and the engagement lifecycle, customer expectations see no boundaries and expect the same “Amazon” experience from insurers.
In today’s digital age, technology drives and underpins every organization. If change is to be brought about, the CIO must lead the way and provide the requisite business and technology platform that is the foundation for a rapidly changing future. Unless the CIO is released from trying to maintain and enhance tired non-conforming legacy systems, which consume a high percentage of both people and investment resources, it’s hard to see how insurers will ever catch up, let alone get ahead of the game.
It’s no longer just culture standing in the way of change. It’s legacy core business systems, as well. The disruption and changes that are reshaping industries, and the businesses within them, are creating unprecedented growth opportunities for insurers who can capture the opportunities in terms of new risks, new markets, new customers and the demand for new products and services. Cloud-first business solutions are the foundation for these insurers. They fit the fast-paced world where a new generation of startups, product launches and expansion into new market segments is creating a new age of insurance.
This article was written by Mike Smart and originally appeared on Majesco.com.