Should CIOs be more open to playing in someone else’s digital sandbox?

CIOs are leveraging hybrid teams to develop technology. The tight grip on data is loosening to accommodate innovation-heavy markets.

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In previous articles I’ve discussed how CIOs have an evolving role in today’s market. The time and innovation demands are stretching CIOs thin.

Traditionally, CIOs have enjoyed tight control over their processes. Everything from the hardware (server stacks, access points, etc.) to the teams that keep the technological foundation of their company operating were tightly controlled and managed internally.

The challenge with a tightly controlled, in-house solution for large-scale organizations is that the rate of innovation is demanding a more diverse working group – more diverse than can be achieved internally in a cost-effective way.

CIOs are blending internal and external tech solutions to keep up with demand for innovation

The company with the best technology wins. Building the best technology requires a hybrid team of internal and external assets.

Let’s look at just one example where the increasing rate of product innovation is demanding more of CIOs than ever before:

A recent survey found that 67 percent of customers prefer self-service, instead of interacting with a customer service associate. This trend has a massive impact on the role that CIOs play.

Spinning up a solution that allows customers to interact and make changes on their own isn’t terribly difficult. But how do you keep up when the product is evolving and changing on a weekly basis? One change to how a product or service works, and the entire infrastructure for allowing customers to self-serve needs to be updated or replaced.

This is just one example where innovative product development can quickly outpace the internal capacity of today’s CIOs.   

Blockchain platforms offer a powerful solution to the rapid pace of product development

One saving grace in a world where expensive, time-intensive technology is being scrapped and rebuilt at record pace is the emergence of blockchain. Bitcoin and other blockchain currencies have been soaking up headlines. But there’s a parallel story that innovative CIOs are paying attention to – blockchain has the potential to revolutionize software development by improving the reusability of individual modules.

When a CIO is asked to compensate for a significant shift in product design or implementation, they no longer need to throw the baby out with the bathwater. They can pull complete modules from the current solution and easily redeploy them with the new technology.

Sure, dev stacks have always allowed for the recycling of code in new solutions. But, blockchain platforms are entering the market that allow dev teams to hypercharge this process. Combining blockchain with AI could theoretically future-proof large-scale deployments.

One example of this is in the InsurTech space. SE2 is a technology solutions firm that helps insurance companies bring products to market. The company recently published a whitepaper discussing the real impact of blockchain on the way insurance companies service niche or underserved markets.

In the report, SE2 outlines how FinTech firms are using blockchain to streamline transactions between financial institutions. A slight pivot on this use of blockchain can help insurers more effectively authenticate digital interactions (i.e. signing a policy agreement online), process claims for on-demand insurance products (traveler’s insurance, etc.) and roll out specialty health coverage solutions.

To leverage blockchain’s potential, CIOs need to be more open to using external platforms

Blockchain is a complex, technically challenging solution. To borrow from SE2’s report:

[Blockchain’s constructs] include distributed ledgers, consensus mechanisms, cryptography and cryptocurrency tokens, wallets and smart contracts, evolving in parallel: at times together, but not always in unison. Rather, they work together in myriad architectures to offer business value.

According to Vinod Kachroo, CIO at SE2:

The insurance industry has historically assumed a fast-follower mentality, but today, that model must change. Market-leading insurers are seeing huge advantages to being first adopters. It’s the same thing with blockchain adoption.

In order for enterprises to benefit from blockchain, they need a strong infrastructure and standards, which can only be developed through collaboration with outside experts – including competitors. Insurers also must be able to learn from and adopt that innovation to drive a change in the organization’s internal culture to continue to evolve it. But it all starts with cross-industry collaboration.

The good news is that large enterprises have the talent and expertise required to enter agreements with outside vendors. All that’s required is a willingness from management to enter into these agreements. In the world of IT and software development, CIOs simply do not have the choice to say no to outside solutions. The risk of getting left behind by the next disruptor is too great.

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