IT organizations have a boatload of new responsibilities that relate to sourcing: managing traditional insourcing and a variety of outsourcing flavors simultaneously, selecting the best approach for balancing the cost/value equation, and identifying viable options as well as determining how they relate to business objectives and capabilities. New conversations need to take place about the possibilities. There are new considerations for the investment in keeping the infrastructure current and secure.

Computer hardware, software services, telephony capabilities, and human resources can quickly be assembled and used to handle specific tasks. Large, fully-staffed centers of excellence offer services to businesses anywhere on the planet. Workload sharing and balancing among computing resources can be refined to maximize investments. Telephony technology for automated call routing, predictive dialing, and resource allocation can provide support for call centers oceans away.

New software delivery models are increasing flexibility. Using cloud computing, all computing resources or assets (servers, storage devices, networks, and software) can be hosted or managed in the cloud. With a Software-as-a-Service (SaaS) model, applications run on a remote computer and usage determines the pricing. There are other IT components that can benefit from a model where the user/consumer of the services does not own the computing/software/telecom assets—including Communications-as-a-Service (CaaS), Platform-as-a-Service (PaaS), and Data-as-a-Service (DaaS).

It is helpful to consider the following in determining which of the sourcing models might be the most suitable:

• Is management of the physical resources a requirement for accomplishing your objectives?
• Is there any advantage to owning the computing infrastructure, software, and communications assets?
• Does it really matter where the physical resources are located? Is it of concern to you if the resources are shared?
• How confident are you about your own ability to provide secure IT systems? Might another organization be able to provide a more secure environment?
• What pricing mechanism will give you the most flexibility and best fit your business model?

Overall, the increasing flexibility of IT provisioning models will be positive for the insurance industry—particularly for insurers that have invested in creating a modern, flexible architecture and data model. Plug-and-play solutions will become the norm. New sourcing modes will allow rapid implementation of new approaches, variable cost structures, and on-demand usage modes. In the coming years, new business models will take shape, changing the fundamentals of the insurance business itself, how work gets done, and interactions throughout the insurance ecosystem.