I recently had the good fortune to fly with Roy Pratt, Enterprise Architect, EDS, on a commercial flight from Cleveland to Dallas. We got to talking a bit and found that we had some things in common — technology, insurance, and even photography!

Aerial photography – Roy found that he loved taking pictures and loved flying — a great combination, but sometimes dangerous as you listen to one of his stories!!

Roy with a nephew before a flight.

Professionally, Roy has a background in insurance and healthcare, manufacturing and engineering systems. He’s been with EDS for over 22 years and worked with over 25 corporations defining frameworks for the IT systems of large corporate environments — ERP, SOA, centralized or distributed, etc.. His role exposes him to the inner mechanics and operational metrics of organizations.

Here are some salient points from the talk:

Legacy environments must redesign their architecture to become more agile, quickly sense and respond to changes in customer needs, to product offerings and competitive threats in the market, regulatory requirements, and financial requirements.

The most important thing leadership needs is knowledge and that comes for the IT department.

An interesting personal story about Roy’s personal P&C insurance and moving his book of business because a simple use of technology compatible with his life-style.

Old-thinking — IT projects as cost-reduction or efficiency initiatives, they think of IT as a cost to be minimized.

New-thinking — Effectiveness, revenue generation, or competitive advantage, IT IS the competitve advantage. GEICO and Progressive use IT to reach OUT to the customers. Adobe, Apple, Dell, all are using IT to communicate effectively with their customers. E-mail updates re iPods. Click here. Do you know how to do this? These guys are leveraging IT right out to the edge. Barnes and Noble, Staples — hybrid models… They are the ones that are going to flourish.

Old-world manufacturing space and why some of the big players died out. Similar — IT investments focused on internal efficiencies, build large lots, stuffed them into wharehouses. They saw inventories as assets that provided competitive advantage. Sounded good but they failed to realize that the customers wants and desires changed at a faster rate than inventory turns. So the old-thinking led to deep discounts, new production, more inventory, deep discounts, etc. The asset is the ability to produce what the client wants when they want it, NOT static inventory.

KEY: Adapting to changing customer preferences using the IT infrastructure.

How this applies to insurance – IT infrastructure of insurnace companies are not equiped to help with Web development becasue they are focused on cost reduction. The knowledge capital is coming from the IT systems. (So if they are not positioned to support marketing and the agent/customer interface, who does it? Typically noone, right? That’s why H&L insurance companies are so far behind the times. But that’s where IdeaStar comes in…)

What’s at stake?

  • The competitive ability within their markets.
  • The rate of change is going to continue to increase.
  • New-thinking to make IT systems as agile as possible.
  • If you are not meeting the customers needs when they need it, it’s a deathnell.
  • Shake-out of those in leadership positions with old-thinking of IT.

Click here to listen to Roy Pratt

Thanks again, Roy! Great meeting you!