As the insurance industry continues to evolve and become ever more customer-focused and digitized, the dependence on complex technology architecture will only increase. If done well, establishing enterprise architecture (EA) governance will help insurers simplify IT landscapes, deploy business capabilities more quickly, and future-proof solutions. In implementing an EA governance structure, insurers must consider a number of factors:
Investment and Expansion: Recent carrier investments are dependent on solid enterprise and solutions architecture, especially in digital transformation and exposing APIs externally. Establishing new EA standards around cloud has also been a major area of investment for carriers, along with microservices architecture to better leverage these environments for improved scalability and fault tolerance.
Best Practices and Benefits: Enterprise architecture has traditionally relied on establishing key business and IT strategic drivers with related reference documents. More recently, it has become important to develop a “test-and-learn” culture for architecture. It is desirable to “fail fast;” that is, to prioritize work activities with the goal of discovering potential problems as early as possible, minimizing schedule risk and cost.
Challenges: Increased Agile adoption and the ensuing increase in team autonomy can make it difficult to adhere to strict architecture governance practices. Carriers also must balance strategic direction with tactical considerations. This has been a challenge since EA evolved in the 1990s, but system complexity overall is much higher today, making it even harder to stay out in front of the project teams.
It can be difficult to secure funding for EA since it’s a foundational area whose effects are not immediately visible. Yet a strong architecture governance function is needed to ensure that each project is consistent with the overall technology direction and business strategy. For more on enterprise architecture, see Novarica’s brief Enterprise Architecture: Expansion and Key Issues.
Add new comment