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Applications Modernization for insurers: Integrated digital customer experience

2014

PAC Multi-Client Study 2014

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What is Applications Modernization?

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Old World

•  Application portfolio assessment

•  Cloud readiness audit •  Architecture design

•  Application development and enhancement

•  Systems integration •  Testing/quality assurance

•  Application lifecycle management

•  Workload orchestration •  Service management •  Applications security

New World

•  Fragmented application estates, sprawl caused by M&A activity, globalization

•  Internally developed systems, internally managed

•  Complex layers of integration •  Cloud adoption limited to peripheral, non-

critical workloads

•  Increased use of standard COTS platforms •  Wider use of SaaS for horizontal apps

functions •  Core ERP/industry domain workloads move to

private cloud •  Rapid development cycles to support digital &

mobile agenda •  Focus on customer experience, application

visualization, augmented reality

Design Build Run

What is not included? Legacy applications maintenance and support, traditional on-premise

systems integration and consulting services, traditional application hosting services (eg non-consumption-based models)

PAC Multi-Client Study 2014 – Apps Modernization in European Insurance

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What is Applications Modernization?

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What is the challenge?

Why is it important?

How are businesses responding?

How far along the journey are they?

One of the biggest challenges facing IT organizations in 2014 is that their applications estates are unable to support the current and future needs of the business.

Ageing applications have become a major barrier against organizations adapting to the fast-changing demands of their clients, employees, partners and regulators. The ability to transform or diversify the business, and to take advantage of new-wave technology such as mobile, analytics and social media is often held back by the ongoing dependence on inflexible platforms.

As a result, many businesses are looking at how they can evolve their application landscapes away from legacy systems and towards more flexible architectures and delivery models. This is a highly complex process, and many are looking to external providers to help them understand the best and most appropriate delivery model (SaaS, public/private/hybrid cloud) for their different application workloads. They are also trying to understand the impact this will have on systems integration, development, testing & QA, governance, licensing and service management.

Many companies have already started on this journey, with PAC’s latest research finding that businesses have already migrated between 5%-10% of their application workloads to the cloud. In most cases, this first phase has seen the adoption of SaaS-based salesforce automation or workforce management. The next and more challenging phase of the market will see organizations look at how they can move more critical workloads such as ERP or industry-specific systems to cloud platforms.

PAC Multi-Client Study 2014 – Apps Modernization in European Insurance

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Apps Modernization is a Huge Challenge for European Insurers

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European insurers are faced with three key challenges: 1.  Driving a better customer experience

through digital transformation, in order to improve competitiveness.

2.  Increase the agility of the business in order to speed time-to-market for new services and entry into new territories

3.  Gain a single view of the truth across corporate and customer data in order to comply with new regulation and provide executives with better understanding of performance.

How do insurers respond, at a time when the IT organizations remains under pressure to reduce costs? They also remain dependent on ageing legacy systems, supported by skills which in many cases will be retiring from the business in coming years. Adoption of standard packaged applications and flexible delivery models has been slow compared to other sectors (eg banking).

According to PAC’s research, spending on applications services in the insurance market will outstrip that in most other industry sectors during the next five years.

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Hypothesis

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1 Insurance providers have been relatively slow to simplify, standardize and modernize their application estates. Many remain dependent on complex tangles of decades-old legacy platforms.

2

The wind has changed in 2014, with competitive and regulatory pressures forcing them to look at how their core systems can better support the needs of the business, to deliver an improved customer experience, greater flexibility, faster time to market and a single view of key performance data.

3 Insurers will take different approaches to this challenge – some will standardize core areas of functionality on standard COTS offerings, others will look to fuse together their existing platforms using BPM and data analytics tools.

4 As a result, the insurance sector will be one of the most dynamic markets for applications modernization services in Europe during the next five years.

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Added value for sponsors

•  Independent, substantiated arguments for the customer approach

•  Executive summary and the full version of the study (individualized with the sponsor’s logo and profile) available for download on the sponsor’s website

Sales and Lead Generation Support

•  Positioning as relevant provider and thought leader in the field •  Branding through content marketing with substantiated and

independently drafted content •  Extensive, measurable range and awareness among

customers and partners and in the press

Thought Leadership and Branding

• Up-to-date market insights and analysts’ assessments for your strategy development

•  Exclusive detailed results for the sponsors, individual questions and special assessments possible

• Reliable information on investment plans and the use of selected technologies

Market Intelligence

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From strategy to execution, PAC delivers focused and objective responses to the growth challenges of Information and Communication Technology (ICT) players. PAC helps ICT vendors to optimize their strategies by providing quantitative and qualitative market analysis as well as operational and strategic consulting. We advise CIOs and financial investors in evaluating ICT vendors and solutions and support their investment decisions. Public institutions and organizations also rely on our key analyses to develop and shape their ICT policies. Founded in 1976 and headquartered in Paris, France, PAC is part of the CXP Group, the leading European research & advisory firm in the field of software and IT services. For more information, please visit: www.pac-online.com PAC’s latest news: www.pac-online.com/blog

About us!

2014

‘JC‘ Bodhuin

Partner – UK Managing Director

+44 79 7083 7152 jc.bodhuin@pac-online.com

Matthew Page

Account Manager

+44 7551 256881 m.page@pac-online.com