Real-time Visual Tech for Claims. Build vs Buy?
New initiatives in the insurance industry are beginning to drive innovation and adoption of technology forward faster than ever before. One of such initiatives to expedite claim resolution provided a leaping start to include application of real-time visual technology within the claims process.
Real-time streaming technology capability is now widely available through mobile devices and makes a lot of sense to apply it within claims. It offers a lot of immediate benefits. Being able to gain a visual of the claim damage, whether it is an auto accident, property claim, or a worker’s comp accident scene has significant value in both accurately capturing timely evidence to reduce claims handling costs as well as mitigate fraud related risks. In addition, acquiring timely information also ensures great customer satisfaction by simplifying and expediting a typically very stressful claim resolution process.
When it comes to adopting this technology, insurance organizations typically have two options. First, is to build it in-house. Second, however, is to purchase it as a service. It is extremely important to make sure that the choice selected fits into the long term business strategy, as the tech industry is constantly undergoing changes.
Whether the option is to build or to buy, both have pros and cons. Let’s take a look some of the most important points.
Talent
The right talent to develop the technology in-house is the key to ensuring successful implementation of the project. It takes the right type of team, not only to implement the proof of concept, but also to deliver the solution in production.
Historically, insurance carriers invested heavily into a significant in-house IT workforce to build specialized internal products. However, today, this large force impedes most carriers’ ability to dynamically roll out new solutions and venture into new technology space. The toughest part for insurance organization to being able to innovate and quickly achieve new results depends on how it is able to secure the right type of talent to ensure success.
Lifetime Cost of Ownership
Many organizations invest into their in-house solutions as the means to attain better control of their environment and justify lowering the costs of purchasing a similar solution from a vendor by assuming quicker implementation. Yet, every project that is implemented in-house needs to be supported. Even with the most successful implementation and delivery into production, the continuous investment necessary to maintain the operation and roll out new enhancements over time accumulates to significant figures.
When we look into the complexity around the mobile live streaming, the Lifetime Cost of Ownership becomes an even larger concern. For example, real-time streaming from mobile devices must ensure that all mobile apps are properly working. Yet, the devices are constantly changing to new modern smartphones – Apple, Android, Windows, etc. It is difficult to project where the technology will go and which devices will hit the mainstream, but each change in the market place will require a specific type of a development team to maintain a close contact with the technological innovations and the platform that delivers the functionality. And each of these changes come with a certain undeniable degree of the risks as well.
In addition, when dealing with the latest technologies that undergo heavy innovation, great considerations should be taken in ensuring that any internal technology being developed does not infringe on existing patents. To avoid a chance of violating someone’s intellectual property rights, the internal teams now need to either invest into close design evaluation or ideally deploy their own internal patent innovation teams.
Hence, what looks like a logical decision to implement the solution internally becomes a much more expensive exercise in the long run.
Domain Expertise
IT is quite unique in certain aspects. Some technologies are very widely used and available and it is fairly easy to get the right type of domain expertise. For others types of technology, it becomes extremely difficult. While any good IT resource can figure out how to accomplish given tasks, the issue becomes in the learning curve and many trials and errors that are encountered along the way.
For real-time streaming technology, these risks are extremely high and they require a very specific type of experience. With the talent pool already being a difficult commodity, the domain expertise becomes yet another dilemma.
To solve this dilemma, many organizations look to specific IT organizations that can provide consultative services or specific streaming solution to be integrated into the in-house project. While that is a logical step, too often generic solutions that seem to help bypass the gap in domain expertise lead to complex implementations in addition to taking on expenses of utilizing 3rd party offerings, libraries, and APIs. This becomes a tradeoff in hybrid implementation model that delivers reduced costs with higher implementation risks due to the dependency shared product ownership.
Conclusion
Taking the steps to evaluate internal IT team’s talent and resources, review of the plans for Lifetime Cost of Ownership, and accurate assessment of Domain Expertise are critical to determine whether the technology should be built in-house or whether it should be purchased.
Yet, what most insurance carriers have realized over the years is that they are not in the IT business and hence have to become a lot more flexible in quickly adopting new scalable technology to retain a competitive advantage.
The pace at which the technology is entering the market is enormous making it extremely difficult for in-house IT teams to keep up. Many leading CIOs and CTOs have recognized this new trend by noting that their traditional roles have evolved from being implementers to becoming integrators and that the success of the business largely depends not on the ability to build the technology, but on the ability to quickly adopt the right technology to suit the business needs.