An enterprise-wide, digital-first strategy ensures that digital information and data stays digital, available from anywhere at any time.
If you Google the phrase “digital transformation,” you’d get more than 450 million search results, including educational pieces, research reports and information on technologies. Yet many organizations still face major challenges.
Often, these obstacles aren’t even related to technology. According to a recent study from Novarica, the biggest challenges come from not knowing where to initiate a digital transformation journey, how to minimize disruption to business, how to accelerate time to value and how to ensure stability and agility throughout the process.
We often discuss three paths, or phases, to digital transformation to clarify how insurers can achieve their goals. The paths also take some stress off organizations that see the goal but get lost in the haze of how to get there.
The process starts with digital enablement.
Prior to the digital enablement stage, many organizations feel like they are drowning and in need of change. Processes take too long and often rely on paper; customer experience is poor; and employees feel stuck. The problems push organizations to enter phase one of their digital transformation journey: preparing an outline of a digitization strategy with a clear mission and goal.
In this phase, there may still be multiple digital "silos" where information is stored, often in legacy systems. Unconnected, insurers cannot get a complete view of business processes and customer information. To overcome this, IT departments should take time to understand and evaluate the organization’s full technology ecosystem and all the required systems that a new solution would either replace or integrate with.
Once the ecosystem assessment is complete, the organization can evaluate the best solutions and partner with vendors and system integrators (SI) to help map out the scope of the project, keeping realistic expectations and goals in mind.
One of the last steps within the digital enablement phase is putting the right team together to put the strategy in place. By starting with a critical department, like claims, insurers can gain quick momentum and showcase success before expanding the solution as needed.
Gartner defines digital optimization as "the process of using digital technology to improve existing operating processes or business models."
In this phase, insurers are often enacting the same business processes – but using technology to optimize the procedures and experiences for end users and customers. For example, take the typical claims process. Once the claim is filed, an insurer receives, investigates and acts on the claim. Using the digital optimization model, the insurer would receive the claim in a digital format, and digital workflows would route the right information to the right adjuster at the right time, who could then review the claim and come to a resolution faster. By expediting the process, insurers decrease time to decision while increasing customer satisfaction.
“A large incumbent could more than double profits over five years by digitizing existing business,” McKinsey reports in its Digital Disruption in Insurance report.
Many insurers find that achieving digital transformation is much harder than they originally thought, not understanding that it is a continuing process and never really quite finalized.
Insurers create revenue streams not possible in earlier stages of the transformation journey. The enterprise-wide, digital-first strategy ensures that digital information and data stays digital, available from anywhere at any time.
Many insurers are still in the initial phases of digital transformation – sorting through goals and assessing needs within the digital enablement phase. The good news is that they are taking the time to evaluate needs and how they hope to achieve their goals. Some are even are starting technology evaluation processes, looking at content services platforms to help them modernize and digitize.
By defining problems from both a business and technology viewpoint, insurers can gain approval from all stakeholders and buy-in from the beginning for a more successful transformation journey.
It’s clear that insurers that embrace digitization will continue to thrive within the industry’s digital future. By selecting technology that will both uncover insight in data and provide the ability to quickly develop and support new products, insurers will attract new customers while continuing to provide exceptional service to current customers.