There has been a new virus spotted in some insurance operations. digital myopia. It is often found in the presence of another related issue — transformation shock. Together, they often bring about framework chaos. Fortunately, there is a straightforward vaccine in use —systematic analysis.
The ever-rising digital bar for the insurance industry creates challenges and opportunities and a bit of chaos. The opportunities can help insurers build customer loyalty, compete, transform customer engagement and improve retention, which can lead to improved profitability. But how can insurers overcome the challenges of the digital transformation journey, and at the same time rid themselves of the feeling that they may be approaching digital transformation in the wrong way?
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To gain a new perspective, insurers can look at their key issues from a systematic approach. They can start with a few simple, but pertinent, questions.
- Where does our organization sit on the spectrum of digital need?
In working with a broad array of insurers, from the largest to the smallest, from the traditional to the new start-ups, Majesco sees and helps many customers battle a variety of challenges on their paths to digital leadership. Often, they are confronted with pressure to “go digital.” We hear statements like this: “My board is pushing me to go digital, but I don’t know where to start, what to prioritize and what the ultimate goal is.”
If this is you, welcome to the club. So many organizations try to think about their digital efforts before they ever consult their core business strategy. This throws off the ability to make wise digital decisions. It’s important to remember that digital strategy begins with the most basic, non-digital question — “Who are we?”
So you start with your business strategy. Do you have one? If so, do you then focus on the gaps between your current digital capabilities and your target operational model — the one that fits your business strategy? Does your organization want to be a quick follower to current market leaders? Or, alternatively, does it want to be a market leader and disruptor? Finding the right model and approach that aligns with your business strategy instantly empowers your business priorities and aligns your organization’s DNA to the digital strategy it will adopt. Once this happens, a sense of relief will often flow throughout the organization —even before the digital work has commenced. Organizations need to know where they fit before they can grasp where they sit on the spectrum of digital need.
2: Do we need to create a coherent, comprehensive digital strategy?
If your organization has its core business strategy defined, then you are ready for the next level of systematic analysis. Your organization (and often a technology partner) will assess the current environment and the array of digital initiatives underway. It is at this phase that we often hear, “We seem to have too many digital projects and initiatives going with no real plan or strategy behind them.”
Many organizations started their digital initiatives before the digital strategy came into play. They are now realizing that the sum of the initiatives (parts) is less than it should be, sub-optimizing the business strategy and customer experience. This is often where most companies find themselves requiring urgent action to avoid a scattering of digital islands that do not connect to each other. Evaluating and consolidating these initiatives against your business strategy is crucial to digital transformation. Decide which initiatives are critical to your business success and kill those that do not align, creating clarity and focus for resources. There is nothing like the feeling that comes at this stage of the digital strategy. The organization and projects are aligned, the moon and the stars have moved into place and order is emerging from the chaos. The vaccine (systematic analysis) is working!
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3: Is our digital road map clear, but legacy issues stand in our way?
If you find yourself in the position where you have a clear digital strategy and road map, but you can’t do as much as you wish because of legacy core insurance systems, then there are innovative approaches to address this obstacle.
We advise insurers to adopt a digital platform that can provide a multi-speed digital transformation approach. This digital platform provides two critical components: First, it holds an enterprise service bus platform that can easily orchestrate transactions and data flows between multiple systems (including legacy) easily and efficiently. When the organization replaces the legacy systems, the new systems can be easily plugged into to this platform. This provides a quick win, using an underlying business and technology architecture that provides the foundation for your digital road map. And the best part is … it requires no change to your legacy systems, and it can be completed quickly.
Second, the organization should look at key functional areas, like service areas, that need a digital mobile or portal to meet customer engagement expectations. Identify the few processes that are discrete and can be revamped, digitized, automated and integrated into the digital platform without major changes to your legacy systems. Digitize them and expose them to a federated or a self-serviced model. This digital transformation approach helps you meet the most immediate needs of your customers by turning obstacles into opportunities. It also gives you time to address the most pressing strategic obstacle, your legacy core system transformation.
These two steps, once completed, will help build confidence and momentum in your organization’s business strategy. They will accomplish most of your digital transformation goals with your customers and staff and help make your total business transformation more viable, and more agile.
A cohesive IT strategy and a successful business strategy nearly always go hand in hand. Your reward in pursuing a systematic digital transformation will be a clearer road map, a sense of direction and a group of people unified behind a common path.