What's Happening?
Insurance technology teams frequently manage multiple projects simultaneously, including production system maintenance, regulatory compliance, and business user requests. This often leads to resource allocation challenges, as the same specialists are
needed across various initiatives. For instance, a developer might be pulled from a policy administration update for a production issue, delaying other projects. Traditional ticket-based support models can exacerbate these issues, causing delays and requiring constant rescheduling. Sikich, a firm working with insurance companies, suggests that capacity-based managed services could offer a more flexible solution. This model allows companies to purchase an agreed level of delivery capacity that can be applied to a prioritized backlog, adapting to changing needs and ensuring efficient resource utilization.
Why It's Important?
The struggle of insurance technology teams to manage competing demands has significant implications for the efficiency and responsiveness of insurance companies. Delays in system enhancements or regulatory updates can lead to compliance risks, missed market opportunities, and decreased customer satisfaction. The inability to efficiently allocate specialized resources can also result in increased operational costs due to underutilized staff or the need for expensive, last-minute hires. Capacity-based managed services offer a potential solution by providing flexibility in resource deployment, allowing insurance companies to adapt to fluctuating workloads and prioritize critical initiatives more effectively. This approach can help optimize spending, improve project delivery timelines, and ensure that technology investments align with strategic business objectives, ultimately enhancing the overall competitiveness of the insurance sector.
What's Next?
Insurance technology leaders are encouraged to evaluate their current resource commitments and support models to determine if capacity-based managed services would be beneficial. This assessment involves analyzing where requests are delayed, which skills are consistently in demand, and how current managed services investments are performing. If current models are causing frequent delays or inefficient resource use, a shift towards more flexible support structures, such as capacity-based managed services, may be considered. This could lead to a more agile and responsive IT environment within insurance companies, better equipped to handle both routine support and complex project work. The adoption of such models will likely involve establishing clear agreements with providers regarding scope, capacity, responsibilities, and priority management.
Beyond the Headlines
The challenges faced by insurance technology teams reflect a broader industry trend where digital transformation and regulatory pressures are intensifying. The move towards capacity-based managed services signifies a strategic shift from fixed-cost, resource-centric IT support to a more dynamic, outcome-oriented model. This approach not only addresses immediate operational inefficiencies but also fosters a more resilient and adaptable IT infrastructure. It encourages insurance companies to think critically about the value derived from their IT investments and to align their support mechanisms with their evolving business priorities. This could also lead to a re-evaluation of internal IT skill sets and a greater reliance on external expertise for specialized tasks, potentially reshaping the career paths and organizational structures within insurance technology departments.
