Don't expect things to bounce back to 2005, however. The economy coming out of the recession looks very different than the one going in, and with it, a new role for information technology. The Great Recession forced companies to become more resourceful and innovative and, as a result, many have turned to technologies that help things get done far more cheaply than ever before.
I like the way New York Times columnist Thomas Friedman described the new paradigm in a column he wrote at the end of last year: as “The Great Inflection,” an outgrowth of "The Great Recession."
The Great Inflection, he writes, is arising out of a "do-it-yourself" business environment based on online and cloud-based resources. "The Great Inflection is the mass diffusion of low-cost, high-powered innovation technologies — from hand-held computers to websites that offer any imaginable service — plus cheap connectivity,” he says. “The Great Recession is forcing companies to take advantage of the Great Inflection faster than ever, making them more innovative."
Friedman cites examples of the radical changes in the way companies are doing business. For example, a marketing company can produce films at a fraction of competitors' costs, thanks to the availability of free online collaborative tools and websites for writing and preparing the script, cheap stock photos, inexpensive voice-overs and low-cost music cuts. Operational and marketing costs were cut significantly due to technology.
Friedman didn't cite insurance companies in his examples, but there's no doubt the Great Inflection also means changes in the way business is done here as well. Areas such as marketing and new product development may see the impact of The Great Inflection first. New initiatives can be developed using online and cloud resources, which allow for greater experimentation … and failure. In fact, the price of failure is plummeting, thanks to technology.
In the Great Inflection, communications and interactions with customers and agent networks are more cost-effective than ever before, thanks to social networking tools. Doing a customer survey? Reaching out to agents for input? You may be able to informally poll them via a social network and get results instantaneously, with information comparable to traditional, more expensive outreach efforts.
The Great Recession has forced many in the industry to look for alternative ways to get around costly barriers to sustainability and growth. This is laying the groundwork for the new, more innovative ways to do business over the coming decade.
This article originally appeared on Insurance Networking News.
Joe McKendrick is an independent consultant, author, blogger and frequent contributor to Insurance Networking News specializing in information technology. He can be reached at joe@mckendrickresearch.com.
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