Although much has been written about the business benefits of cloud computing solutions, not much focus has been put on measuring its returns.
Patrick Ashton, CEO of Cirrus Managed Services, a subsidiary of SilverBridge Holdings, discusses how an insurer can quantify the value of the cloud for the business.
Cost-effectiveness and use of mobile devices to access data are two of the prevailing reasons why companies have taken to cloud solutions. The benefit of having these additional data touch-points is that a decision-maker can now generate better insights from customer behaviour, analyse products that are selling (and that aren’t) and identify competitor trends. But in a world driven by the bottom-line, how can we more accurately measure these benefits?
Hardware versus software costs
It is relatively easy to compare traditional software costs (those purchased off-the-shelf) with the cloud services being used. Given that cloud solutions require less on-premise hardware, decision-makers can also compare hardware costs with their monthly cloud fees.
Cloud costs have also become much more predictable so insurers can budget according to their specific environmental needs. The flexibility this provides means they can be more focused on delivering innovative solutions for their customers. Time taken up by software and hardware maintenance can now be refocused on product development.
The key question though is whether this translates to improved business processes and more customers or is it just a case of repositioning resources? In a way, both statements can be considered relevant. For the former, it is a case of delivering on customer expectations for more bespoke solutions that fit their unique requirements. In the case of the latter, the cloud paves the road to streamlining operational efficiencies through features such as on-demand resource scaling and inclusive disaster recovery.
There are also other considerations at play. Organisations across industry sectors are increasingly moving towards the ‘as-a-service’ mentality. This encompasses everything from their business strategy and product development to how data is accessed and analysed.
One of the results of this is having solutions at hand that more readily serve connected customers. As previously indicated, people want tailored offerings. For some insurers, the time to develop these and how effective they can be for a specific customer segment might outweigh any potential advantages.
Yet, for others, this differentiation enables them to generate new business and strengthen their position against competitors. And in the court of public opinion, this could very well be the impetus needed to foster even more tailored solutions.
So, while the cloud is not the cure many make it out to be, it certainly drives measurable business advantages for insurers. In a digital world, requiring every ounce of efficiency to combat reducing budgets, the cloud could very well be the mechanism needed for the next stage of insurance growth.