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The Importance of Digital Decentralization for Pools


Last week, we launched Office Hours, a conversational setting for pools to engage directly with Resident Scott Klososky and each other on topics related to digital transformation. After quickly outlining the eight most important digital proficiencies for pools to master, we opened the floor for input and discussion.

Unexpectedly, most of the conversation focused on whether pools should decentralize control over how digital systems are being built and used — i.e., distributing tech responsibility and expertise for business applications across a pool rather than siloing it exclusively with an IT department. This idea was recently covered in a Wall Street Journal article (article may be behind paywall).

Under this model, business-side departments have clearly defined responsibility for their own technology tools, including maximizing their use, choosing upgrades, picking vendors and so forth.

Why is decentralization of business applications important for pools? First of all, it brings more technology power to your organization. With all staff members responsible for building and holding technical knowledge, you can make better use of the systems you already have.

Building individual digital proficiencies also frees your technology resources to focus on where they are best able to support the entire pool. For example, if your pool has business-side support for claims and underwriting applications, IT can instead focus on data storage, enterprise architecture decisions, digital policies and standards, and even programming if that’s part of their duties.

Further, pools are struggling to compete with large, private-sector companies who can offer lucrative compensation — meaning pool IT departments are likely to shrink as time goes on. Distributing tech responsibility helps protect against the overall talent risk of someone being recruited away.

All of this does require some different thinking and approaches. Here are a few tips and insights to consider:

  • Make sure to build a comprehensive list of all software applications used at your pool, including by whom and for what purpose. Be sure this includes one-time applications remote employees purchase on their own.
  • Regardless of your IT staffing approach, identify a “business owner” for every software application. Even if you don’t completely decentralize responsibility, you’ll at least have identified a point person for your IT resources.
  • If it’s appropriate in your pool, add a business analyst resource. This person can act as an important interpreter and intermediary between business units and the IT department. 
  • Implement a technology steering committee that helps prioritize your pool’s technology efforts and allows you to manage resources as a team.

In a decentralized model, up to 70 percent of your pool’s total technology knowledge would reside on the business side of your organization (as opposed to the IT side).

The idea of decentralizing technology knowledge and responsibility for support of pool business applications is not just a “big pool” consideration. In a smaller pool, it’s even more important that IT resources be dedicated where they can add the highest and best value. A single IT resource can’t be expected to know the intricate business operations and supporting technology needs within every aspect of pooling. Not to mention: If you lose your one and only IT resource, it could set your pool back significantly while you find a replacement and attempt to catalog their knowledge.

For pools managed under an administrative services contract, decentralizing applications support can ensure core knowledge resides within both IT and business units, which helps preserve business continuity and builds critical bench strength.

In short, the decentralized IT conversation is one worth having no matter your pool’s size or structure.  


Steve Keller is AGRiP’s director of programs.

The next installment of Residency Office Hours will take place Friday, Feb. 18, at 2 p.m. ET. We’ll be talking about the most important digital transformation risks and opportunities for pools (with input from a group of pooling leaders). Contact Steve for login credentials.