Technology that responds to a changing marketplace

By Kevin Kelly

10p34.jpg Kevin S. Kelly, Worldwide Insurance Industry Manager, Microsoft Corporation

Editor's note: Kevin Kelly observes that he has spent his entire 20-year career in the role of "technological evangelist." Whether evangelizing the marketing positions of profit-making companies or not-for-profit organizations, or attempting to "influence" a lecture or seminar audience on the value-proposition of his own technological beliefs, Kelly has always been engaged in helping others understand the import and impact of technological development.

Kelly says his history with insurance technology traces a varied path of helping to shape messages or provide educational information for ACORD, IVANS, national agent associations, carriers and agencies large and small. Describing himself as "half propeller-head" and "half sales-and-marketing professional," he adds that he now plays in the most exciting "playground"--Microsoft--and he remarks that he is more than a little awe-struck at what Microsoft is doing to shape the future of information technology.

What follows is what Kelly refers to as a brief evangelical "sermon," delivered from his recently acquired new "pulpit," that of worldwide insurance industry marketing manager for Microsoft.

" The term 'digital nervous system' is kind of an interesting one. The analogy, of course, is to the biological nervous system where you always have the information you need. You always are alert to the most important things, and you block out the information that's not important. And companies really need to have that same kind of thing: the information that's valuable getting to the people who need to know about it."

--Bill Gates, Keynote Speech at Microsoft's Second Annual CEO Summit, Seattle, May 28, 1998

I'd like to describe how Microsoft approaches the insurance industry--to provide you with an "inside peek" at how we are trying to make your personal and professional lives easier and more productive, through the use of our products.

10p35.jpg Microsoft recently created a unified team to approach the financial services community. Bill Hartnett, my predecessor, has been promoted to group marketing manager, having responsibility for banking, securities and insurance. As insurance industry manager, I have peers in banking and securities and we each work closely with a "technical evangelist" for each of our industries. Together, we are trying to enable all financial institutions to share data and information through a new systems connectivity "framework" called Windows® DNA (Distributed InterNet Application architecture) for Financial Services or WinDNA FS.

Though my pulpit has changed, my opinions about technology or the insurance industry "road ahead" have not (thanks, Bill G.!). In fact, the preaching I have done in the past is now truly fulfilled through my new job and the technologies that Microsoft is delivering to enterprise application developers to help them create better and better software for you to use.

I came to the insurance industry through ACORD, but more specifically through initiatives developed and recommended by ACORD's ISR (Interface Systems Requirements) Panel. This panel of industry insiders filed a report years ago recommending procedural methods for beginning to implement agency-company interface. Today, Microsoft is promoting software development practices and "new-breed" corporate information systems that allow the industry to finally realize the ISR Panel's recommendations and to satisfy ACORD's present-day member and subscriber needs for integrated applications and worldwide user connectivity.

What follows is an overview of where we believe insurance systems development is heading. Let's begin with a brief explanation of two important concepts that Microsoft is promoting:

1. The concept of implementing (read: "demanding from your vendors!") a "digital nervous system"

2. A financial services "framework" called Windows DNA for Financial Services (WinDNA FS)

These efforts encourage the adoption of practices and tools that will deliver low-cost, high-yield information connectivity between financial services professionals and their shared customers.

The concept of a digital nervous system is essentially the implementation, by business users such as you, of wide-reaching computer network and desktop-user connectivity along with deeply integrated insurance-specific computer applications, such as agency management systems, rating products and customer relationship/marketing systems. These next-generation internal systems will deliver on the promise of one of Microsoft's founding missions: "information at your fingertips."

com/digital_nervous_system for more information about the digital nervous system.)

Today's insurance applications and systems are pretty good at reacting to planned, traditional business events--but they are absolutely terrible at helping you react quickly to unplanned opportunities or events. More and more, you will need to do this as the marketplace evolves (recent mergers should be telling you something!). Hence, the need for a new breed of business information system.

10p36.jpg "Today's insurance applications and systems... are absolutely terrible at helping you react quickly to unplanned opportunities or events .... Hence, the need for a new breed of business information system."

Internet access for each "knowledge worker" on your staff and building an intranet (a private, internal, local area network, using Web browsers and Internet e-mail as primary methods of sharing information among employees) are examples of the early developments leading to a digital nervous system. The later stages of development include your demanding applications that integrate with each other, and no longer accepting the answer "we can't do that" from vendors. The technologies to enable greater application "interoperability" are available, and they need to adopt them in their system development.

Such a system will allow you to react to planned and unplanned events, just as our own organic nervous systems do.

A digital nervous system will enable you to:

* Act faster and process business more rapidly

* React more successfully to opportunities and threats

* Make more informed business decisions

* Get closer to customers

* Focus on business not technology

Wouldn't that be great? I know these to be among the goals of every single independent agent I have ever met!

A digital nervous system is built upon a commitment to six principles. (This should also read "a commitment by principals"--namely agency principals!):

1. a PC computing architecture

2. all information in digital form

3. universal e-mail

4. ubiquitous network connectivity

5. common end-user productivity tools

6. integrated business-specific applications

What we see emerging (and what we are trying to "jumpstart") is something called the "Web lifestyle"--the concept of utilizing the Internet and the Web interface for entertainment, education, browsing and purchasing and generally enhancing one's day-to-day existence. Methods of "digitally" connecting the carrier, the agent/broker and a new technologically-enabled stakeholder--the insured--will be vital as more and more consumers expect to be able to interact via the Internet with products and services that they purchase. A true digital nervous system takes this into account and provides access to data, applications and human communications as a fundamental part of the overall platform.

A digital nervous system is more than just parts, however. It's how the elements work together, how they're integrated. Integrating these elements is what Windows DNA for Financial Services is all about.

Windows DNA for Financial Services is essentially a software-connectivity "blueprint" for insurance, banking and securities software developers to use to build applications that work in the world of the digital nervous system.

For insurance, it will feature many of the object-oriented standards and forms efforts that ACORD has been working on for the last three years and also will feature additional interoperability and data specifications that working groups of vendors and carriers will develop. As part of WinDNA FS for Insurance, ACORD's OLifE and Objx initiatives will enable vendors and carriers to build greater interoperability into their systems and will ultimately provide more rapid application development and enhancement cycles, both benefits to you.

The efforts of Microsoft's industry-specific working groups will culminate in specific modifications and enhancements that insurance industry software vendors will see us deliver as application development resource kits. All of these efforts will result in greater system functionality for you--at your desktop, or wherever you work.

Applications that support the WinDNA FS specification will be inexpensive to build (save you money), easy to maintain and modify (save you money and time), flexible (make changing workflow and building and modifying insurance products simpler) and fully connectable (make total agency-company communications a reality!).

Individual computer users need minute-to-minute access to business information and applications. They shouldn't be continually stymied by the differing systems' inability to "talk" to each other, based upon the business/political motives of the vendors or carriers. This also leads to using too many disparate and hard-to-operate applications and systems. A digital nervous system assumes and provides more deeply integrated user interfaces and database integration for all applications. WinDNA FS will assist them in delivering the interoperability you need and should come to expect in any system you purchase.

Why should you care or know about digital nervous systems or WinDNA FS? Well, you are the ultimate consumers of technology tools developed by your vendors and carriers. Having a stake in the outcome of a product might just mean having a little understanding about what is going on at a worldwide level with respect to your industry's technology. Microsoft is working aggressively to provide your vendors with "best-of-breed" development tools and philosophies as well as an industry-specific "framework" to build to. You need to ask about these initiatives when you speak with your vendors or carriers.

Technology changing the insurance industry

On the horizon are a great many technological advances that will change the face of personal and business computing in significant ways. Natural language, vision and speech recognition, common use of hand and palm-held devices, ubiquitous Internet access (at significantly increased speeds), unbelievably fast and inexpensive computers will continue to change the marketplace, the consumer and, thus, the insurance industry itself.

Microsoft's over-arching goal is to provide great software for personal and business customers to use to improve their lives. We pour more than $2 billion annually into improving our products and researching technologies that will ultimately enhance your personal and professional lives. Our efforts in financial services are the true realization of many years of Microsoft's and insurance industry professionals' efforts and battles to establish powerful, low-cost insurance information systems for insurance professionals.

Microsoft's Windows operating systems, our BackOffice platform, our Office applications and our software development tools are how we help vendors provide you with better and better software. Your learning about and demanding that vendors provide you with a true digital nervous system that supports the Windows DNA for Financial Service specification will assure that you have a technology underpinning that will allow you to compete aggressively, as we move into the future--together.

How your company manages and uses information may be the one factor that determines its failure or success--or runaway success. And how well you manage and use information depends on the technology you use.

Today, you can gather the best thinking from everyone at all levels of your organization and create a new kind of corporate intelligence--one informed by correct, up-to-date, actionable information. When a technology system delivers that result, we call it a digital nervous system. A digital nervous system relies on connected PCs and integrated software to make information flow rapidly and accurately. It helps everyone act faster and make more informed decisions. It prepares your company to react to unplanned events. It helps close the gap between your company and its customers. It lets people focus on business, not technology.

Creating a true digital nervous system takes commitment, time, and imagination. It's not something every company will have the determination to do. But those that do will have a distinct advantage over those that don't. *

The author

Kevin Kelly is worldwide insurance industry marketing manager for Microsoft. Before joining Microsoft, he participated in the formation and initial development of ITSA (Insurance Technology Services of America) and the use of the Internet and Web browsers as collaboration and transaction processing tools for reducing costs and streamlining business processes. He was also president of enlightened influence, a consulting firm that promoted the use of the Internet by agencies and carriers to connect their networks and thus the workers on those networks.

©COPYRIGHT: The Rough Notes Magazine, 1998