How Standards Can Impact Business
Benefits can be seen within and outside organizations
Have you ever replaced a light bulb and wondered why the new bulb fits? The answer is simple–standardization.
Today, we live in a world where many of the things we use from day to day have been built around common standards. From light bulbs to high-tech products, the use of standards touches our lives each day. Within the world of information technology, cell phones from different manufacturers are able to communicate with each other because they connect using the same wireless communication standards. Personal computers connect to each other through Internet standards. Computer manufacturers produce parts that are compatible with each other because they are based on the standards created by IBM and Intel Corporation. Most desktop software is compatible with other software because the programs have been developed to run on the Microsoft Windows standard.
These are some examples of information technology standardization in action–enabling businesses to become more efficient and effective through improved compatibility and connectivity. Within the insurance and related financial services industries, where IT spending traditionally has been conservative, organizations that have adopted or are adopting technology standards will be able to differentiate themselves better with improved efficiency and service.
How can your organization become more effective by implementing IT standards? Depending on the size of your company and the complexity of its products, your IT team is likely focusing on intrinsic standardization, and possibly also on extrinsic standardization.
Intrinsic standardization involves ‘streamlining’ the internal environment–activities that enable internal systems and processes to work better with one another. The usage of Microsoft(R) Windows for all desktop users within an organization is an example of intrinsic standardization.
Extrinsic standardization efforts involve separate organizations working together to achieve common goals, such as the cell phone communication standard mentioned above. Extrinsic standards allow separate organizations and systems to communicate effectively with one another.
Insurance organizations can use intrinsic IT standards to achieve positive business impact in two ways.
o Process Standardization: IT organizations can align their service processes to better support their businesses. Program and project management offices can manage strategic IT initiatives; software development methodologies can be rolled out to ensure that IT products are developed using prescribed control procedures; and software support procedures can be shared across business units to ensure that customers of IT services receive consistent levels of care. The net result is improved customer service and IT product quality.
o Hardware and Software Standardization: Companies can select key types of hardware and software–such as servers, personal computers and programming tools–that will be used across all business units. These IT assets, once installed, can then be used at any business location within the organization, improving business flexibility.