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When I bought my first house, my real estate agent needed me to go through the standard title insurance and escrow process in order to close the transaction. The process seemed strangely antiquated, based on an outdated model that required numerous, unnecessary steps. I looked into it and discovered that the handful of companies controlling the title insurance industry were still operating much like they did in the 1950s. They had managers overseeing teams of people who manually entered the same information into multiple computer programs in order to double-check data that had already been processed multiple times.
I asked why the title and escrow industry hadn’t embraced new technologies, from automation to machine learning to predictive analytics, given the rise of disruption in similar sectors. People in these companies told me this was simply how it’s done. But they also made an argument that they felt was enough to explain why new technologies should stay out of the sector: Because some cases require special care or involve unusual situations, people must be handling all processes in their entirety.
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Coming from a tech background, I knew that didn’t make sense. Numerous data entry and processing tasks assigned to human workers could be safely handed off to machines. I also knew that computers can engage in exception handling — including, if these companies wanted, alerting managers every time there’s a case that requires a human expert.
With a better understanding of the gap in the market and the challenge at hand, I launched my own company, States Title, which eventually grew to become a Top 10 company in the $16 billion title insurance industry.
My experience turned out to be emblematic of what’s happening in numerous global industries where all-or-nothing mentalities still reign when it comes to technology. The thinking is that because machines cannot take over an entire process, they might as well be kept out of it altogether.
But companies’ failure to innovate exposes them to risk and has a huge impact on the global economy. Accenture recently estimated that a whopping $41 trillion in enterprise value is ripe for disruption.
Here are three crucial steps to overcome legacy approaches and begin putting new technologies to use strategically, without handing off the entire process.