Paint by numbers? Is it better than starting from a blank canvas?

May 5th, 2011 | Posted by

For those of us with limited artistic talent, paint by numbers may seem like a great way to display creativity. But there are those lines that you have to stay within and someone else is telling you what to paint. Is it really a creative outlet? Would a blank canvas allow that creativity to flow more freely?

For an insurance company, there is a similar concern when the IT department opts to buy versus build. The IT department of many insurers believed for a very long time that customized in-house development was the only way to develop systems that would meet their unique needs. They prided themselves on differentiation and customization. But, the result of that pride is a myriad of legacy systems that today are very hard to change or replace.

Today many vendor core processing systems offer customizable code and rules. If the systems are truly configurable, it should be possible for the insurer to customize and differentiate their system to meet their needs. If the system allows the insurer to make it their own, both in the IT department and the business areas, the insurer should be able to create a system that is unique to that insurer. It can potentially have less overall costs if the cost of not being able to change or update the old systems with new products, processes or rules is considered.

Listening to a panel of insurance company CIOs recently, it came to me that once an insurance company begins to see the benefits of configurable systems how can they not be sold for future change of all their systems? One insurer talked of how the business areas were beginning to recognize the benefit of the configurable software in that the business areas could make the changes they typically requested from IT when the business area wanted it. That left IT to concentrate on all the items that can get the organization moving faster such as product (speed to market), customer (speed to respond), and corporate strategy (speed to adjustment). The insurer was living a business/IT transformation with the implementation of vendor systems.

Quite often it is the inability to change that prevents a user from accepting something new. But if the benefits of the new system are such that the users begin demanding the same of all the systems, could paint by numbers be better than a blank canvas?

Celent’s 2011 Insurance Software Deal Trends reports will be published shortly. We’ve noticed a large uptick in the number of insurers engaging in core systems deals this year. Perhaps creativity can be found within the lines begun by someone else. And, no one says you have to use the colors others they give you.

  1. Moshe Shamir
    May 11th, 2011 at 01:03
    Reply | Quote | #1

    The indications in this blog post are very much in line with what we are seeing, as a vendor, in the marketplace — An increasing interest in core system replacements, VS. last year.