By now, many insurers aspire to evolve into digital companies. That is, customers and employees can interact real-time through digital channels, and products are created, tested and delivered in a seamless, ongoing fashion, with innovation supported by a robust and flexible backend infrastructure. However, many likely are not ready to make this transformation, at least from a technical perspective.
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Skills shortages. For starters, there’s a yawning skills gap now afflicting many IT departments. Only 18 percent of executives responding to the survey feel they have a qualified pool of developers capable of delivering the software their businesses need to innovate.
Lack of funding. There are also budget constraints holding back digital transformation efforts. Approximately 65% say they need more than 10% in budget increases to meet their goals. More than 1 in 3 say that increase needs to be more along the lines of 25% or greater. However, a majority, 53 percent, believe that they can’t expect more than a 10% bump in budget in the next 24 months.
Legacy systems. Then, there are existing systems that need to be upgraded or unraveled – so called “technical debt.” Seventy-four percent of executives say that this technical debt “reduces the velocity at which they can respond to business needs.” Maintenance of legacy applications “adds another significant strain to the workload,” the survey’s authors state. More than half of organizations say they have to either consolidate or refactor 10 or more legacy applications in the next year. One in 10 organizations say they’ll need to refactor more than 20 legacy applications in the next 12 months.
Communication gaps. Finally, lack of communication between the business and IT teams are hampering efforts to attain digital transformation. Another 30 percent feel business and IT leaders lack proper metrics to justify or determine technical solutions to business problems, and 26% say line of business and IT leaders lack a common language to translate business needs into technical logic.
To keep digital transformation on track, the survey’s authors suggest more low-code or no-code solutions, to shift more initiatives to business end-users. (This is Appian’s business, by the way.) But there also needs to be additional measures taken as well. Digital transformation initiatives need to be ingrained into DevOps cycles, for example. In addition, digital advocates need to step forward and educate their organizations on the consequences of failing to pursue a digital strategy – such as being overtaken by digitally savvy disruptors. Perhaps planting a little fear will get executives motivated. Established insurers can also learn from the cultures of emerging insurtech partners as well.
