Transformation may be the most frequently used word or concept in the entire insurance business today. It is commonly viewed as a program of significant changes to a business that is enabled by new technologies like analytics, robotics and the cloud. Typically, these tools replace or extend legacy systems with the goal of making operations more digitally enabled, agile and cost effective.
The powerful technologies get all the hype, but their role is often overestimated. In fact, human and organizational factors are usually the most important in successful transformations, because without the right talent, culture and mindset, as well as the right operating model, transformation simply won’t happen.
Insurance CIOs understand the point acutely, because they face significant talent challenges. Insurance firms often run on older technologies, which are supported by an aging workforce and younger workers show little interest in learning. Pressure from the business to accelerate change and develop new capabilities creates a demand for scarce digital talent, for which there is intense competition in many industries beyond insurance. Balancing the two requirements – replace older workers who support legacy technology and find new digital talent – is a significant challenge simply to maintain the business and is exacerbated by a transformation agenda.
At the same time, IT leaders must manage the cultural shift to new ways of working both with the business and within the IT organization. Different methods are necessary to take advantage of new technologies and deliver value quickly and consistently, as the business expects.
The way forward will vary for CIOs, based on their companies’ objectives, organizational models and cultures, but key steps are likely to include a few proven practices:
1. Aligning IT workforce skills with application and technology strategies: First and foremost, CIOs need to be sure that their teams have the knowledge and skills to deliver against the company’s technology strategies and plans. A focus on migrating key systems and data to the cloud requires a certain mix of skills. A different set of skills is necessary if the priority is to enhance digital channels for richer customer and agent experiences. It is incumbent on the organization to identify its strongest resources and invest in training in applicable emerging technologies.
2. Retaining focus on the fundamentals: Fundamentals still apply and should not be overlooked in the transition. Strong architecture discipline and robust operating practices remain important. So too are well-defined and documented standards, procedures and configurations. Industry and functional knowledge remains critical, given the unique and complex nature of underwriting, claims, policy administration and other sector-specific systems.
3. Incorporating internal and external resources in workforce planning: Insurance technology leaders seek talent in artificial intelligence, robotics, machine learning, predictive analytics, blockchain and other high-impact technologies. Such talent is in extraordinarily high demand in many industries.
Though they will invest in training and education for current staff, CIOs will rely on external vendors in critical areas, especially for first-generation deployments. Thus, they need to master vendor management, which requires strong communication, negotiation and team-building skills.
The vendor ecosystem may include large IT service providers, contract service firms that specialize in short-term staff augmentation and even individual freelancers flourishing in the gig economy. The payback from stronger relationships with such partners is increased agility – specifically, the ability to scale up and down in line with business demands or in response to unplanned turnover.
4. Focusing on purpose, motivation and communication: Interpersonal skills are increasingly the focus for technology leaders in multiple parts of their job – from articulating a vision and engaging business stakeholders to building teams and motivating staff. These attributes are hallmarks of the leaders of the most effective IT groups across industries.
It’s especially important now, given the digital talent gap. Dynamic and relatable leaders who demonstrate a compelling sense of purpose for their teams help create attractive work environments that can minimize turnover, foster personal growth and increase productivity.
A sense of purpose, which is increasingly important across generations of workers, can also help boost recruiting. For example, in presenting their firms as “employers of choice,” CIOs and HR leaders should emphasize the industry’s importance to global commerce and to individuals in providing financial protection against risks, along with the opportunity for people to contribute to changing the way companies work as the industry evolves at a more rapid pace.
5. Enriching the employee experience: CIOs must also embrace every tool at their disposal. Formalized programs for skills planning and competency modeling can help CIOs see around corners and better match people to roles. While most CIOs have been rightly focused on enhancing the customer experience, they must also take into account the employee experience, given the intense competition for scarce talent and the pressure to transform their workforces.
Today’s insurance CIOs are focused on working with their counterparts in the business to develop new growth strategies, operating models and even products. In order to successfully transform their IT workforce, CIOs need to attract and retain the right talent on high-performing teams by providing training, incorporating external resources, demonstrating a sense of purpose, and focusing on the employee experience.
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