The Cloud has been a subject of much focus over the past few years for a number of good reasons. It can provide scalability, cost-advantages over your own data centers, redundancy and stronger data security. There is no question that all of these benefits are important and can lead to solid ROI on your investment in moving to the Cloud. The greatest benefit, though, may be from something different that it can enable at the core of your operation – flexibility.
One of the greatest competencies any business can have is the ability to shift with the market as quickly and completely as possible. This can protect you from bottoming out in the troughs and allow you to ride the wave in the peaks of the business cycle. It’s no surprise that The World Economic Forum held this skill as one of the most important to thrive in 2020.
What does this have to do with the Cloud? At their essence, Cloud-based solutions are really about having the ability to deploy quickly, scale up dynamically and on-demand, connect to other tools and solutions and virtualize access so you can do business wherever and whenever you need to. That is, their essence is being flexible.
Scaling & Deploying
With your own data center, no matter how large you make it, you can hit a wall in terms of storage, computational power or bandwidth. This can make your tools so slow that your employee efficiency is impacted, customers churn out of frustration, or you are held back from new solutions that require more storage, bandwidth and computational speed.
When you hit these walls, your options are to expand your existing data center or build or buy a new one. None of those options is quick or inexpensive, and could take over a year and millions of dollars in capital expenditure to be in place. For some businesses, that may be plenty of time, but what happens if you are seeing rapid growth, come upon a new opportunity with a limited window to seize on it, or, as many of us faced, you are forced to dramatically change your data needs because your workforce suddenly must virtualize?
If your systems and tools ran on the Cloud, you would not face these constraints. You can turn on additional bandwidth, storage or speed and add instances or locations, often by changing settings in your account without even having to even talk to anyone. That means you can seize those opportunities as they arise, and avoid minefields before getting stuck in them.
Creating an Ecosystem
While scaling and deploying faster and easier are critical parts to the flexibility the Cloud affords business, even greater long-term value may come from the way it enables connections and collaborations. A core component to Cloud-deployed and Cloud-enabled solutions is the ability to tap into libraries of APIs so different tools can talk to each other, passing data or functionality in the process. This forms a richer set of capabilities as a cohesive whole than you could ever achieve through independently-deployed solutions requiring involved integration efforts or manual processes to rekey information across tools and systems.
It also means that, as tools evolve and better options come to market, you can more easily swap them out by replacing the old tool’s API connection with that of the new tool. This can greatly lengthen the lifespan of major investments like Underwriting or Claims core systems because you continuously support that core with the right tools for the situation you face. In a pre-Cloud world, you would likely be stuck with the various ancillary tools like document generation, rating, communications or other tools you have for long periods because of the effort that went into getting them live in the first place and the way ripping and replacing any of them could bring down the whole due to the deep integrations.
You may also have the ability to integrate tools that would have been too difficult to tie together otherwise. Through the Cloud, for example, you may be able to turn on capabilities like Single enterprise text messaging, accessing third party data and analytics solution and more through connecting to the APIs of other Cloud-deployed solutions, or enabling capabilities built into your Cloud solution itself, like single sign on capabilities or real-time translation.
What The World Economic Forum specifically called out was Cognitive Flexibility, or flexibility in how we think. When your tools allow you the freedom to scale, shift, enrich, speed up and deploy flexibly, your mind no longer operates with many of the constraints it historically had. That means you will start to think more creatively and freely about what is possible. Sure, you will respond flexibly to the demands in front of you, but perhaps even more valuable is your ability to discover opportunities or avoid risks you would never have thought of before.
This post is inspired by the book series, The Future of Insurance: from Disruption to Evolution, by IEP Founder & Managing Partner, Bryan Falchuk. Learn more and order your copy today at future-of-insurance.com.
It was written in collaboration with and support from Coterie Insurance.