With Halloween just past, it seems appropriate to blog about something thematic. Usually, the word “scary” isn’t used to describe insurance writings, but there is a twist to one important question that can be as frightening as things that go bump in the night.
Often, a technology adoption discussion starts out with a question about why an insurer should adopt a specific technology. That’s a good question. But the more telling question may be: What happens if you don’t adopt it?
It’s a scary way to look at technology adoption, perhaps, but it is important to assess the implications of not adopting specific technologies. When it comes to business intelligence (BI) tools and data warehouse modernization, there are some very frightening downsides to not putting these critical components of an enterprise data strategy first.
See also: 4 Benefits From Data Centralization
- SMA research shows that 53% of responding insurers believe establishing a data strategy should precede a core technology initiative. That still leaves a good percentage of insurers who see things differently. And simply believing a data-first strategy is the right way to go doesn’t mean that executing it is easy. However, insurers who put off data strategies until after core system choices have been made actually run the risk of choosing the wrong provider (architecturally), relative to a data and warehouse strategy that would work best for their organization.
- Migrating legacy data to modern technology has kept many an IT and business leader awake at night or has given them a data migration nightmare. In fact, the sheer magnitude of doing a legacy data migration has led many insurers to decide to leave legacy data alone, resulting in a myriad of work-arounds. This will most certainly lead to poor service for both customers and distributors. It can also lead to a great deal of added expense and employees who are frustrated by having to deal with work-arounds. A solid data strategy with BI tools and a modern data warehouse can make the migration of legacy data into the new systems significantly easier.
- Business leaders are clamoring for analytics. Most of the technology demos we see at SMA address (or at least mention) analytics value in one way or another. However, without a data strategy, there may be a disconnect between the data architecture of the technology and the data structures decided on in a later data initiative. The result: delayed analytics value. Waiting for analytics can make business partners feel they are only getting incremental value from the new technology.
- Many insurers have accelerated core modernization initiatives because of the pressing need for modern portals and expanded mobile capabilities. However, if customer and distributor data is still fragmented — not centralized in a modern data warehouse and not unified with a common data strategy — the full value of portals and mobile will not be attained. And no insurer can afford to fail at fully delivering in these areas.
- Across a whole host of technology categories, software with out-of-the-box reporting tools is fairly common. On the surface, this seems to be an answer to a lot of problems. However, while technology-specific reporting tools have value, without an enterprise BI reporting tool an insurer can be creating reporting silos... and no insurer needs more silos. Additionally, while software-specific reporting tools may be useful for a specific category of data, such as operational data (which can be very good), they may not be what insurers need to gain deep insights into all categories of data.
