Tag Archives: business operations

How to Make IT Efforts Strategic

Has your IT come out of the proverbial and actual basement to be an integral part of your business strategy? Too often, business leaders assign IT a task and expect an initiative to be delivered. End of story. The truth is, business owners must engage and own the outcomes of their IT investments, driving them to a strategic value that can be measured.

What is IT strategy? Think about any infrastructure initiative (building highways, public transportation or urban development). Without the requisite strategic investment of time, funding and planning, these initiatives face delays, cost overruns, diversion from desired strategy and failure. True partnerships between IT and business operations insure that the best thinking of both can be applied to a given situation to produce strategic results.

See Also: The 7 Colors of Digital Innovation

Business value

IT should be viewed as a business strategy. Today, not a single discussion in the workers’ compensation industry relating to claims management or medical management does not include IT. As workers’ comp focuses on outcomes (both cost and quality), it is the only new strategy around. Moreover, it is the most effective and efficient strategy to achieve business goals. The following six elements are necessary to generate business value by leveraging the IT strategy. 

1.    Define the project—Describing how new technology or a new data application will function is only the first step in integrating IT into the business strategy. However, defining the project can be tricky. Remember, IT professionals talk a different language and appreciate different measures of success than those involved in operations. Business owners cannot assume their IT requests are understood as they were intended. Even slight misinterpretations of requests can result in frustration, cost overrides and a useless tool.

I recall one time, early in my career, when I submitted specifications for a development project. I used the word “revolutionary” to describe the powerful impact it would have on the business. However, the IT person, who was younger and male, interpreted “revolutionary” in an aggressive, military sense, which was not even close to what I had in mind. Always verify that you have an understanding and clarify of all elements of the IT project. 

2.    Design for simplicity—If the IT project outcome is complicated or requires too many steps, people will not use it.

3.    Define the expected business value—As a part of defining the IT project, define its expected business value. Both the business unit involved and the IT team need to align their expected outcomes. Not unlike evaluating ROI (return on investment), identify the financial investment and rewards of the IT project. Make sure to also describe the anticipated collateral outcomes of the IT project, such as PR, business growth or client involvement. Figure out how to measure the expected business outcomes when the project is complete.

Design the project outcome value measures at the beginning. Too often, business leaders do not articulate their expectations of value and, therefore, can never prove them. If you do not know where you are going, you could end up somewhere else.

4.    Commit resources—Funding and other resources such as personnel should be allocated at the beginning; short-shrifting resources will guarantee less-than-satisfactory results. Know from the beginning how the IT project will be implemented and who will do and be responsible for the work. Establish accountabilities and create procedures for follow-up.

5.    Monitor progress—Continuously monitor and manage the project, even throughout the IT development process. Discovering deviations from the plan early on minimizes damage and rework. Obviously, rework means cost and delay.

6.    Measure value—Once the project is accepted and implemented, begin continuous outcome evaluation. Execute the value measures outlined at the beginning. Make the necessary adjustments and keep your eye on the business value.

Not everyone can be an IT expert, but everyone can become an expert in how IT advances the strategies of their domain.

Why ‘Digital’ Is So Important

We all know that digital technology has changed, and continues to change, how people shop for, buy and use goods and services. Power has shifted from the company to the customer. All companies must adopt the digital technologies that create the interaction that consumers now demand and expect. But is digital readiness more of an imperative for some industries than others?

What if you are in an industry that sells a product that most people don’t really even want to buy, own or use…that people probably wouldn’t even buy if they didn’t have to…a product that was confusing and mysterious? Heck, one that isn’t even a “product” at all? If you were a company that fit this description and you lagged behind in digital readiness, how long do you think you’d last if a new competitor came along and used digital technology to actually make the experience of buying, owning and using the product you sell more appealing to customers?

Well, this is the position the insurance industry finds itself in. Satisfaction ratings with the industry vary – they’re so-so in the U.S. and pretty poor in the U.K., based on research commissioned by Majesco in a report titled “Assessing the Quality of the Customer Experience ,” for example – and few customers actually switch each year, but loyalty, if you can call it that, is driven more by inertia than a true feeling of satisfaction and emotional connection to one’s insurance company. Quite frankly, it’s a royal pain to shop for and switch insurance, and most people are willing to put up with minor annoyances – until they get pushed too far.

The company that can best remove or reduce the pain of buying and owning insurance stands to reap a huge market of consumers who are tired of being treated poorly by the insurance industry, compared with the new benchmarks set by Amazon and Apple.

This is not new news. But the good news is that most leaders in the insurance industry get it. They know they need to act, and they are. Three-quarters of respondents in a cross-industry survey by MIT-Sloan on digital strategy said that digital technologies are important to their companies today, and 93% said they would be important in the next three years.

The issues are easy to talk about, but it’s hard to actually make the digital transformation in any industry or company, not just insurance. It’s not just implementing new technology. It also requires strategy, leadership, culture, resources and technical capabilities. The MIT-Sloan survey found that most companies are in the early or developing stages of digital maturity. Even those that were in the most advanced “maturing” phase could not be truly considered as fully mature.

Majesco surveyed its insurance customers in the third quarter of 2014 to get a better understanding of the insurance-specific promises and challenges that digital capabilities are presenting them, which are profiled in the report “Digital Readiness in Insurance.” The customers overwhelmingly agreed that digital capabilities are the foundation for the future and that this was the biggest driver of their digital strategy work. While their current priorities for digital transformation are focused on specific internal business operations like billing and payments and e-service for customers and agents, they at least are aiming at improving the experience of their two most important stakeholder groups: customers and agents.

Despite these good intentions, most of these insurers reported that these operations are currently only weakly supported by digital technologies. Most said there was little concern in their companies about the strategic priority of implementing their digital strategies, but they are encountering barriers when it comes to integration of systems and the capacity and capabilities of their organizations and technology.

It’s great that Majesco’s customers recognize the expectation to improve the experience of shopping for, buying, owning and using insurance. The mandate for a compelling digital experience, and the necessity to compare themselves with companies like Amazon, are the first steps on the digital journey. Where are you?