For example, the business may have its own set of goals separate from the constraints of IT, and vice versa. The right combination does not necessarily mean every department needs to
be involved, however there needs to be clear communication of
goals and expectations, which will help guide finding the right
What we know is technology changes are the easiest. Any
technology change can be made in a vacuum; it is what happens
to the change when it goes back to the business that’s important.
Is the business ready? What is the impact to the business, to
roles and processes? Business changes are in essence the most
difficult to implement.
We find ourselves in the midst of a quickly moving evolution of technological innovation across our industry, with
strong influences from outside the industry. Not only do we
need to have a technology innovation game plan, but we also
have to have a clear and conjoined business strategy to avoid
having different parts of the organization pursuing competing
or conflicting priorities.
SMA’s Business Value Maturity Model, a model many insurers use in their overall business and IT strategy and for planning
technology investments, shows different levels/tiers of maturity
based on the intersections of business and technology. Insurers can migrate through the levels—to modernize, optimize,
and innovate—by blending levels of business and technology
involvement. It can be sequential or out of order. For example,
an organization can modernize business and/or technologies,
optimize business with or without technology, and innovate
with technology and/or business.
Stepping Through Scenarios
The important thing to remember—and what we have seen—is
innovation can happen at all levels and in various combinations.
Exploring different scenarios is all part of building a game plan
and incorporating new business processes or current and new
The traditional dilemma facing many insurers is how to
innovate with mature/maturing technologies. What the SMA
Business Value Maturity Model shows is you can take first steps
and create substantial value through small changes. Embracing
business intelligence tools, adding self-service portals, or modernizing core systems are first steps, but do not equal innovation. However, what they can enable are new opportunities, new
business, and a big bang across the organization. These are great
After the baseline is created, organizations can embrace the
technology-driven approach to innovation and then couple
sound business processes with new emerging technologies:
cloud, big data, sensors, and advanced analytics. In fact, these
advances are no longer emerging; they are becoming commonplace fixtures in solutions and are easier than ever before to
obtain and integrate.
Organizations can start with a pilot or proof of concept and
eventually determine the type of changes that can be made to
align to the business. What we find is sometimes new technolo-
gy can begin to open doors for new business capabilities.
The alternative, of course, is to let business drive innovation
coupled with sound technology practices. The business driven
approach looks at market indicators and determines what
changes are needed from an organizational and process level to
achieve desired outcomes.
Organizations can begin with a capabilities assessment and
a gap analysis of business components to determine the type of
changes needed to align to technology. Business is a great driver
for innovation because business is the best predictor of need
and capabilities in the market, enabled by technology.
Who Should Drive?
No matter who drives innovation—business or technology—the
most important thing is to treat innovation as a discipline. Next,
develop a game plan. Use the SMA Business Value Maturity
Model; determine where you want the organization to go.
Finally, decide who is going to lead, business or technology,
and make sure the leader fully brings along the priorities and
capabilities of the other component.
As Steve Jobs said, “Innovation distinguishes from a leader
and follower.” That is an important quote to remember. Don’t
get left behind. Follow sound, well-planned steps to prepare to
embrace the great changes the industry has to offer.
The annual SMA Summit provides a great place to learn more
about innovation in insurance. This year’s focus is Becoming the
Next-Gen Insurer, an opportunity to hear what insurers are doing
to cultivate, activate, and accelerate transformation and differentiation. Insurers, for a complimentary pass please call 603-770-
9090 or email email@example.com. ITA
Deb Smallwood, the founder of SMA, is recognized for
her expertise in how insurers can deploy technology to
innovate and differentiate in the insurance industry. She
offers a fresh perspective—blending vision with practical
realism. Exclusively serving the insurance industry, Strategy Meets Action blends research findings with expertise and experience to deliver business and technology
insights, research, and actionable advice to insurers and
IT solution providers.
Decide who is going to lead,
business or technology, and
make sure the leader fully
brings along the priorities and
capabilities in the market,
enabled by technology.