Increasing Agility Through
CIOs embracing outsourcing and blended staffing strategies must
carefully evaluate their organization, partners and processes.
Insurance CIOs across the industry are embrac- ing outsourcing and blended staffing strategies in order to enhance productivity without increasing fixed overhead. In Novarica’s recent survey of 111 insurer CIOs, 85 percent reported outsourcing at least some IT work through variable staffing and staff augmen- tation, legacy application maintenance, or data center or infrastructure management. Notably, few companies outsource a majority of their work
in any of these areas. Rather, they work as blended organizations,
sharing tasks and projects between internal and external staff.
OutsOurcing fOr the greater gOOd
From an earlier simplistic focus on outsourcing as a means of reducing costs, insurers are realizing the greater usefulness of outsourcing in shifting to a variable cost/resource basis. In Novarica’s
research and conversations with insurers, several are benefiting
from access to as-needed skilled resources beyond the cost savings
involved. While many insurers still prefer to retain accountability
and control of key IT functions, there is a transition to a managed
services model underway, especially in larger organizations.
However, insurers embracing a blended staffing strategy should
plan carefully for success. This planning goes far beyond selecting
a vendor or carving out a few IT functional areas. Insurers looking
for maximum value from blended staffing strategies should con-
sider the following areas as well:
INNSight is exclusive commentary from Novarica. Matthew Josefowicz
is partner and managing director at New York-based Novarica. This
column was adapted from several recent Novarica reports on insurer