In his best-selling book “Scaling Up: How a Few Companies Make It … and Why the Rest Don’t,” author and entrepreneur Verne Harnish stresses that complexity is one of the biggest factors preventing businesses from scaling up successfully.
This is especially true when one looks at how an organization’s data grows as the organization itself grows. When companies expand, they typically invest in more technology and all of these different solutions generate data. It can become difficult to manage the data between different applications and trying to integrate data between all of these applications increases complexity. But this doesn’t mean that scaling up should be avoided.
In the case of large insurance brands, McKinsey & Company believes that scale can actually be a strong competitive advantage. But only if these businesses recognize that harnessing the benefits of scale means effectively managing data complexity. “Insurance operating models are on the verge of a fundamental change,” says McKinsey. “To thrive in 2030, insurers must commit to a specific role and take action now to secure the tech capabilities they need.”
When most businesses start out, they often cannot afford the best solutions because of cost constraints, or the size of their staff doesn’t justify the expense. So, they end up using solutions that match their current requirements. This works well enough until the business starts growing. As the business scales up, they need to integrate data to more advanced solutions but are faced with the challenge of getting their new IT solutions to work with data siloed in legacy tools and technologies. This is true for many of the bigger and more established insurance players. Faced with this scenario and the reality that integrating data between applications can be an extremely time-consuming, risky and resource-intensive task, many insurers avoid making changes to their current solution stack at all.
But what they don’t realize is that repairing and maintaining legacy tech often costs more than investing in modern solutions. In addition, this fear of investing in new technologies reduces the company’s ability to compete with some of the industry’s newer and more innovative ‘Insurtech’ brands. These newcomers tend to use the most sophisticated IT solutions to meet the market’s increased need for digital offerings, which puts additional pressure on insurance carriers, agents, and brokers to change their approach and leverage automation, analytics, and digitization to boost the level of service they offer their customers.
But where do they start?
By transforming their operating models and investing in technology that allows insurers to quickly, easily, and securely cross-pollinate’ data. This will allow insurance players to bring diverse types of information together in harmony and remove the complexity around data integration.
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We already know that insurance companies use a range of different applications to innovate and drive their digital transformation. But before they can gain insights from these tools, they need to aggregate and standardize data across them.
Hybrid Integration Platforms (HIPs) bridge the gaps between on-premises and cloud applications, making it possible for data to move across environments and enabling the business to connect everything into one cohesive unit. According to Gartner, around 65% of large organizations will have implemented a HIP to power their digital transformation this year. This is because these platforms eliminate complexity by drastically reducing the amount of time it takes to get all of your applications to work together – making it possible for the old tech to speak with the new and freeing up your development teams’ time to focus on more important work. In doing so, insurance players can dynamically and iteratively adjust to the changing requirements of their businesses.
Synatic aims to empower businesses to integrate their legacy technology with new tools no matter the size and level of growth of the company. Using the Synatic Hybrid Integration Platform, PSA – an independent insurance brokerage and risk management firm – was able to navigate the complexities around integrating their disparate system and automating several internal processes, enabling PSA to get the right information, to the right person, at the right time.
If you are running a startup or a well-established enterprise with thousands of employees, Synatic can help you modernize legacy tech to meet the ever-changing demands of your growing business without the fear of breaking any existing integrations. To find out more about how Synatic can make your business more nimble, flexible, and capable of effortlessly scaling up, contact us today.
