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Introduction
Octo Telematics S.p.A. is a large telematics provider specialized in the provision of telematic services and systems for the insurance and automotive market. Octo based its growing business on partnerships with large auto insurers in Italy and in other countries. This approach yielded a new and profitable customer value proposition for insurers based on a customer's driving and risk profiles.1
The heart of the system is a small telematic device (OBU - On Board Unit) installed in a vehicle, which captures and transmits data about where, when and how the vehicle is being driven. Telematic information has reduced auto insurance premiums for drivers, reduced claims and fraud for the insurer, while at the same time creating other social benefits.
The technology has created an entirely new ecosystem of various stakeholders, including installers of tracking devices, security operation centers, data analyzers, government, infomobility providers, telco providers and other third parties providing value-added services. This ecosystem restructuring creates opportunities for new value innovation as a result of alignment of data, functions, price and cost positions.
Octo developed IT infrastructure and software to support the telematics business, and since 2003, when it set up a pilot program for its first 2500 OBUs,2 Octo has continuously tried to align the information architecture and services to its stakeholder needs, to generate and distribute the large amounts of data that form the basis of value-adding analytics. Technology is at the heart of a new ecosystem of services, resources, data and stakeholders. Different stakeholders have joined forces to design the technology, share information and work as a dynamic meta-business system to build a valuable asset - without having to merge.
In this case, the systems integrator - Octo - played the role of market facilitator and enabler; it set up and refined the Italian network of installers, OBU manufacturers, telecom providers and insurance companies.
In managing this role of system integrator Octo has had to reshape the organization and the link between the IT function and the business, in terms of decision rights, committees, processes and roles. To date, the alignment between the IT function and the business, which should be a critical capability for Octo, is still not stable.
When 10 pioneers set up the company in 2002,...