DTPI Diamond Management & Technology Consultants, Inc. (MM)

CHICAGO, Sept. 14 /PRNewswire/ -- While some insurance company chief information officers are driving business value and leading innovation, many have yet to move from the back office to the front lines, according to Diamond Management & Technology Consultants Inc. (Nasdaq: DTPI).

In its third annual Digital IQ® Study, which surveyed 724 senior business and IT executives, including 47 from the insurance industry, Diamond found that there are significant opportunities for insurance CIOs to move from tactical responders into strategic leaders. There are, however, specific challenges CIOs must address to keep the "C" in their titles.

For example, more than 60 percent of respondents reported that the CIO has an understanding of how advances in IT could significantly influence or change their company's core products and services; yet, only one in three believe that the CIO is recognized as a business leader and not just an IT leader.

Jamie Yoder, managing director of Diamond's insurance practice said, "Customers are using information and technology differently every day, which continues to create opportunities for CIOs to help drive growth in the business instead of playing order-taker roles."

Many insurance industry CIOs have stepped out of the back-office and into the front lines, focusing on customer service, strategic business growth and innovation. Diamond's survey results indicate that successful CIOs typically have executive teams that create environments where three critical dynamics foster better performance:

1. Alignment: The CEO understands the business value of IT
2. Mobilization: The organization has one roadmap for corporate strategy
3. Execution: The ability to effectively translate strategy into results is bolstered by sufficient resources and clear accountability

Not all insurance companies, however, are experiencing such success. Diamond's Digital IQ® study found that three-quarters of respondents lack confidence in their companies' IT capabilities, and more than 20 percent say that their CIO lacks a productive working relationship with business executives. Many business leaders feel that the IT department typically stands in the way of corporate innovation.

According to Diamond, one way to overcome this challenge is to engage the CIO at the beginning of the planning process to identify necessary technical requirements early.

Almost half of respondents to the Diamond survey reported that being an innovative thinker who can apply creative solutions to solve relevant industry and business issues is the most important characteristic of a CIO. At the same time, however, rather than leading innovation, 70 percent of respondents believe that the CIO's primary role is to improve business processes and the IT organization. The result is that IT focuses on internal improvements rather than helping business executives to build a more competitive organization.

"Organizations clearly want IT to drive growth and innovation, but that isn't happening in some places in the insurance industry," said Chris Curran, CIO at Diamond. "IT executives need to change perceptions by shaping business strategy, allocating resources and executing plans. In the end, CIOs should be viewed as catalysts for innovation, not roadblocks."

Follow the Money

Of the 724 respondents in all industries, more than half said that business leaders other than the CIO control at least 30 percent of the money spent on IT. The advent of cloud computing, or software as a service, and powerful personal devices like the iPad that enable some functions to sidestep the IT department may be causes of this trend.

"If the technology leader lacks visibility into the full IT portfolio, the situation will lead to future problems in turning one-off investments into significant, long term business value," cautions Yoder. "The CEO must mandate that the CIO be kept aware of all IT spending, even if control of some spending lies outside of the IT department."

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SOURCE Diamond Management & Technology Consultants Inc.