March 13, 2019
Beyond the Digital Transformation Hype
Many are daunted by accounts of digital initiatives gone awry and, conversely, by the winner-takes-all nature of tech-driven industries.
Insurance carriers and third -party administrators (TPAs) are well aware that emerging technologies are poised to change the industry. But, to many, it feels like the rhetoric has gone off the rails. You can hardly greet a consultant or surf the business pages without being told that digital reinvention is a do-or-die imperative.
A multitude of obstacles stand in the way of those left behind. Their organizations are often long on enthusiasm but short on vision. Senior executives, mindful of quarterly results, are excessively cautious about the near-term expense of IT innovation. Employees are prone to resist disruption that challenges skillsets or threatens jobs. And resource-stretched IT departments are hard-pressed to reinvent anything while struggling to keep existing systems running.
The good news is that these obstacles can be overcome — assuming tech leaders know where to start and adopt an effective approach. Below is advice on how to proceed, garnered from top performers in the industry.
Start simply — Find a vendor with a proven insurance-industry track record who can help conquer discrete challenges, such as automating adjustments or on-boarding new customers. Some consultants, hungry for seven-figure contracts, may advocate radical and immediate change across the organization that is over their head. Smart, targeted change tends to be the better approach. Forget about the big bang overhaul all at once, particularly if the company lacks vision or commitment. Instead, start small to build evidence and snowball your effort. Target minimally viable projects and iterate to get bigger.
See also: Culture Side of Digital Transformation
Empower bridge builders — Partners can be the best source for finding talent fast, rather than stumbling through the difficult process of attracting and building it in-house. Outsourced teams of specialists driving cloud native solutions can move quickly and transfer expertise. The coders these vendors can attract are valuable. Competent coders who can collaborate well with your whole company are priceless. They’ll help you get your ideas out of the IT trenches and into strategic meetings, where they belong. And they’ll bring forward the company’s best ideas and biggest challenges. Find these people and partners, and cultivate them.
Be strategic — Fomenting a digital revolution requires forethought, planning, networking and disciplined execution. Just as a general doesn’t go to war by pointing his troops toward the enemy and shouting “charge,” a digital leader needs to understand what they are up against, where the pitfalls lie and how to best achieve her organization’s objectives with the people and assets at her disposal. The leader needs to be able to present convincing use cases up the chain of command.
Target early, conspicuous wins — Projects that streamline operations, achieve cost savings or provide visible improvements to the customer experience can help demonstrate the tangible benefits of digital transformation. An experienced insurance-industry tech partner may be able to quickly alleviate operational challenges, such as capacity spikes and customer-experience deficiencies in claims intake. Such quick wins can build momentum; they should be pursued even if it means delaying initiatives seen as urgent to IT, such as legacy-system modernization.
Be mindful of budget — In today’s environment, where all CEOs say they are running a technology business, the IT department needs the best talent available. Obviously, talent doesn’t come cheap, particularly with the current supply-demand imbalance. Given that nearly every industry from mining to warehouses, finance and retail is undergoing a shift to digital, there aren’t enough engineers and data scientists available or coming through the education system to meet the demand. Initiatives that help the CIO make a case for additional funding can mean the difference between an IT team that can barely keep up with the trouble-shooting backlog and one that propels the company into the future.
Cultivate allies — A battle is best fought by a coalition of the willing who can provide resources, ancillary support and political backing. Likewise, a CIO or director of technology needs to find executives within the organization who are enthusiastic and knowledgeable supporters of digital change. When IT departments choose to forge ahead without obtaining adequate buy-in from the business side, they can fail. Similarly, when seeking help from outside vendors, strong working relationships are critical.
Think broadly — Once you have achieved the critical mass of credible success stories, a viable budget and executive support, you can tackle the “transformational” aspect of digital transformation. That is, you can begin to revamp the organization’s culture to operate more like a nimble tech company than one weighed down by bureaucracy and legacy systems.
See also: 5 Digital Predictions for Agents in 2019
Digital transformation is meant to pave the way toward a more efficient and profitable future. For the moment, however, many insurance executives are concerned by the scope of what lies ahead. Some worry whether they have enough of a grasp on what is hype and what is real in the digital space to lead their companies through the initial steps of the journey. Others are daunted by accounts of digital initiatives gone awry and, conversely, by the winner-takes-all competitive dynamics inherent in tech-driven industries. Yet there is no doubt that change is coming. By following the advice summarized in this article, carriers and TPAs can start on the path of digital transformation and take control of their digital destiny.