Legacy systems & the Internet of Things

June 9, 2017

Are you ready to jump on the IoT train?

Internet of Things (IoT) is the next megatrend. The 1990s’ fixed internet wave connected 1 billion users while the 2000s’ mobile wave connected another 2 billion. According to a Goldman and Sachs study, the IoT has the potential to connect 10X as many (28 billion) “things” to the Internet by 2020, ranging from bracelets to cars.
IoT will have far-reaching implications that touches every industry, from healthcare to retail to oil and gas exploitation and homebuilding.
Just as the first 2 waves of the internet era led to profound changes in the economy, the IoT will create new winners and losers based on a company’s ability to adapt to a world where things are connected.
Insurance Nexus recently conducted an Insurance IoT Industry Survey which shows that 90% of the 350 respondents agree that IoT will revolutionize the way insurers do business. It also shows that only 7% of the Insurance companies are fully embracing IoT today.

Don’t miss the train of IoT opportunities
The insurance world increasingly embraces IoT initiatives that help reduce risk, improve loss ratios, claim to handle and drive premium growth like:

• Telematics: gathering car data like the history of speed, distance, turning and braking patterns, time of day, etc. to price and maintain “usage-based” insurance (“UBI”).
• Environmental Sensors to detect temperature, smoke, toxic fumes, mold, earthquake motion, etc. With two-way communication, these IoT devices can also provide predictive alerts on potentially dangerous conditions.
• Connected Biometrics. Gathering lifestyle information on daily activities like calorie burn, heart rate and sleep pattern history.
• Diagnostics: Highly intelligent sensors are embedded in many products including appliances, toys, consumer electronics, industrial machines, vehicles, etc.
As manufacturers of these devices embed and enable IoT, predictive and preventative service prior to product breakdown or component failure can be provided.

Mainframe blocking the road to innovation
The new world requires a new approach to new technology. Transforming Legacy Applications is mandatory in order to:

– embrace new technologies, protocols and standards. The ‘old’ mainframe technology makes it difficult to connect to new technologies
– handle data and analytics. Legacy systems are not able to keep up
– deal with security challenges. Cures for new threats are developed for new technologies first
– smoothly connect/integrate all different environments – open systems are much easier connected than mainframe
– avoid exorbitant operational costs. The drastic increase in workload and MIPS will drastically increase the cost
– keep up with the competition. Time to the solution is a major driver in gaining and keeping a competitive advantage. Legacy can be a major road blocker in the race for market share

Conclusion
Innovation is key if you do not want to miss the train of IoT opportunities.
It is clear that the mainframe does not offer the flexibility and agility required to adopt new technologies. Although the transformation of your mainframe environment requires an investment the immediate cost savings, due to drastically reduced operational cost, make the ROI rapid and the investment worthwhile.

Don’t move the legacy issue elsewhere but solve it by truly transforming it….
Check out the success stories

Sources

Goldman Sachs report

Forbes article, 5 ways IoT will change the insurance industry