Key Focus Points
Key Focus Points
Innovation is no longer the sole domain of a technology department as successful change is required to maintain competitive standing. Many companies have recognized that all players within the organization have the opportunity and responsibility to look for new ways of thinking and doing their jobs. Innovation offices, departments and functions are now common place, with some very helpful results. Often these programs are led by people from the business side of the organization, with the IT department playing a role. Many of the changes that have been driven in the industry, from pay as you drive to internal efficiency gains, have come from the response to the need for innovation and the programs designed to embrace it. As new technology becomes available, teams examine the practical application for it within the structures of the business model, as many times adoption is too complex or expensive to be a leader. Measuring when to embrace an opportunity is often as important as identifying the opportunities themselves.
Technological innovation is very much at the forefront of any innovation program but it is only a part. Business is changing very quickly and changes in corporate culture and approach are forms of innovation that must be part of any program as well. Many of the most far reaching changes in industry are focused much more on the people involved than on the technology itself.
“The technology area, both within the business and IT, needs to be on constant alert to spot new potential data sources and uses and make them available to organization”
The most interesting and important elements of any innovation approach, however, revolves around dealing with real market disruption. Technology changes create certain fleeting opportunities to differentiate from competitors and are important at the tactical level. It is also true that innovation efforts often open the door to true market disruption. In insurance, products have been constructed, priced and delivered in the same basic way for many years. New technology has allowed for changes to the delivery model in the past few years, via internet, mobile social media and other digital channels, and these are good examples of innovation playing an important role in the industry. The next change, autonomous vehicles for example, may be more disruptive, however, as the structure of products and the way they are priced may be altered. The shared economy has opened new doors in many industries, including insurance. Innovation programs keep organizations abreast of these types of true disruptive changes and can help be the difference between being prepared and being left behind.
C-Level Executive’s Role and how it Changes
The CIO role is always challenging within any industrial organization, as the role requires the blending of knowledge of the technology space, and all its intricacies, with a complete understanding of the business or industry. Over time Insurance has become so dependent on technology that the role of CIO has gone from that of a supporter of business to being core to the business. Many organizations have been slow to embrace this and the CIO has remained a support role, but the change is being forced upon all organizations at one pace or another. The primary factors that have driven this phenomenon are customer channels and big data.
Customers have always been the focus of activity and they are now demanding service in new ways that are convenient for them, and these are driven by technology. Mobile applications, web presence, texting and social media have been playing an expanding role for years, but customers now expect that these channels be expanded and made simpler for them to use and do business through. CIO’s can no longer “check off” these channels as complete because the organization has an offering. They must constantly monitor them for their effectiveness, watch the technology trends and look for ways to offer services that the customer has not yet considered. The ever changing technology landscape will offer new opportunities and industries need to be prepared to look at and leverage these effectively. In this way, the CIO plays an important role in the marketing function of the organization.
Big data, while feeding much of the customer segmentation used in the organization, also creates new opportunities for the CIO to interact with the products and services offered by the company. Insurance has always been a data rich industry and has traditionally used data effectively in creating products. New sources of data from the internet of things, smart cars and other sources offer new opportunities for product differentiation. The technology area, both within the business and IT, needs to be on constant alert to spot new potential data sources and uses and make them available to organization. The increasing data foot print creates new opportunities but also new complexities. Not all data is valuable and differentiating between useful and useless is an important piece of the Big Data puzzle. For the CIO, managing data has gone from being important to an organization to being critical to its survival.
These areas are two examples of where the CIO’s role has become more core to the business. There are numerous others that require the CIO to have multiple areas of expertise. One of the most important continues to be the ability to break down complex technical situations into business language. As the complexity to technology rises, the need for this grows and becomes more difficult.