Cloud Insurance

Cloud Readiness in Insurance: Choosing the Right Assessment

Insurers recognize that cloud enablement is a must to compete in the digital economy, and the benefits—such as reducing costs and improving agility—are multi-faceted. Yet, as with any new implementation of technology, insurers must first define their business objectives and assess how their organization needs to advance those objectives. A cloud readiness assessment gauges your organization’s current state and helps outline the steps needed to align cloud with your desired business goals. Assessments can clarify project focus, reveal gaps within technological, operational, and human capabilities, and evaluate whether your IT efforts match your overall business strategy. By conducting a cloud readiness assessment, insurers can create a roadmap to streamline their cloud migration and reap the full benefits of cloud.

However, when it comes to cloud readiness assessment in insurance, choosing the right assessment is just as important as conducting one—a generic cloud assessment may result in a cloud strategy that doesn’t properly account for industry context, and/or establish alignment across business, technology, and people. In our years of experience in the insurance industry, we’ve found that the most effective assessments analyze the areas that most impact the project’s success. In insurance, the areas that most influence the success of cloud adoption are: business, people, operations, and technology.

Identifying the four critical areas that impact cloud success

An effective cloud readiness assessment in insurance should evaluate the following critical areas:

  • Business
    The process of adopting cloud can be expensive and time-consuming. Because cloud will bring major changes to the very way an organization conducts their business, stakeholders will not buy in right away without the right value proposition: use cases for cloud must drive clear economic and strategic value. Business, in a sense, is the first major roadblock to Cloud. Organizational pushback and distrust can significantly delay and/or impede cloud adoption. For this reason, IT leaders must assess whether or not they have secured adequate time, resources, and sponsorship from stakeholders across the enterprise before starting cloud adoption.
  • People
    Although enterprise leaders are the ultimate decision makers in cloud adoption, it is the entire team that will bring cloud to fruition. A cloud assessment should thus, among other factors, evaluate insurers’ ability to train employees on the skills needed to support the project, implement effective change management, and communicate cloud project activities to the overall organization through the entire cloud journey. Not having a strategy to develop people, and not putting the processes in place to communicate, train and manage them, can lead to misuse of cloud capabilities and resources.
  • Process
    Though one of the main goals of cloud adoption is simplifying IT infrastructure, insurers will also need to establish processes for governing how the organization will use cloud. A proper assessment should reveal what processes and frameworks the organization will need (e.g. infrastructure provision, automation, scaling up/down of cloud, etc.) to successfully manage cloud adoption. Without having such frameworks in place, insurers may end up poorly managing their cloud migration and risk the efficiency cloud can bring. A cloud operating model, or a blueprint to monitor and streamline every change, therefore, is necessary to guide the organization in their adoption and use of cloud technology.
  • Technology
    Adopting cloud requires careful consideration of the technology landscape of the organization; reaping the full benefits of cloud requires planning, decision making, and setting up relevant policies, technologies, and tools. Therefore, it’s crucial to evaluate your existing technology stack and infrastructure to decide which applications need to be re-architected for cloud, how will they be migrated, and what platforms and tools are necessary to support that migration. Knowing this will allow insurers to create a technology roadmap that takes advantage of the existing technology stack, while also accounting for the priorities and business goals of cloud adoption.

Jumpstarting your cloud readiness assessment

For each of the four critical areas, there are key activities that every organization can complete in order to achieve cloud readiness. For example, a key activity for business is identifying relevant use cases for cloud (e.g. disaster recovery, data mining, production migration etc.). Another is setting metrics to further measure business outcomes. These key activities help insurers mature their readiness in that area to adopt cloud, confirming that they have the necessary foundation to support cloud success.

Adopting cloud is never a “lift-and-shift” process. A poorly planned cloud migration can leave the whole organization unprepared for the changes that emerge from cloud adoption. Assessing business, people, process, and technology—on top of establishing solid business objectives as your strategic foundation—can help you develop a roadmap to accelerate your cloud adoption and ensure success.

Need help getting started? You can view sample checklists of key activities for each critical area in insurance for inspiration. For more information on how ValueMomentum can help you advance your cloud journey, visit our Digital & Cloud page.