IT must be seen as a business driver, says Simon Ball

Competition is the mother of technological invention, but it has been lacking in the London insurance sector for many years. For decades the lack of pressure from external parties and the London market's position of strength have hindered the desire to innovate in order to gain competitive advantage.

Technology is often regarded as of secondary importance to the business, and is considered to be a back office necessity rather than a key business driver for competitive advantage.

Symptoms of this approach include a scarcity of IT directors on company boards and IT managers with restricted views of business issues and objectives, and limited experience of managing complex IT projects.

The lack of drive to innovate has created a situation where the incumbent providers of technology have not been required to become experts in applying and delivering new technologies, which are being used to make sweeping reforms in other industries.

Neither have they concerned themselves with the practices, pressures and attitudes of

IT buyers and suppliers in external markets, where the growth of the internet has prompted the rapid development and integration of e-business operations. As a result, the London insurance sector has been provided with services and solutions that many in other markets would consider to be sub-standard.

This relationship is quite different in, for example, the retail or retail banking sectors. Multiple retailers sell in massive volume while making slim margins. Running a business with such complex issues of supply, demand, distribution and logistics means that these operations have a commercial imperative to reduce costs.

In stark contrast is the London market, where a technologically undemanding and poorly-informed industry has worked with unchallenged and inexpert suppliers. This has culminated in projects frequently being delivered overdue and then withdrawn due to implementation and integration problems, or not delivered at all.

A recent and notable exception to this trend however, is PRI, which has since been bought by Brit. It felt that the traditional technology providers to the London market lacked the necessary expertise and so looked to expert suppliers from outside insurance.

But IT suppliers within more demanding industries have had to learn best practice in project management, speed of delivery and service provision. This difficult environment has both encouraged and forced suppliers to become knowledgeable in many burgeoning technologies.

It is surely time for the London market to learn from other industries and demand more from IT suppliers.

  • u Simon Ball is commercial director at IT services company Salmon
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