Process First: Achieving Maximum Product Speed-to-Market

Successful product development efforts are based on more than an ability to deliver quickly. They also support efficient, quality-focused and transparent processes.

Chicago-based property and casualty insurer CNA (approximately $10 billion in annual premium revenue) is not unique in recognizing a market opportunity if not necessity in being able to deliver products to market more quickly. The carrier also resembles its competitors in appreciating product configuration technology as a key success factor in speeding the product development process. Where CNA has distinguished itself is in realizing where that technology fits within the larger picture of product development.

Seeking to roll out several innovative specialty products in 2008, the carrier embarked on a review of its technology and process within the specialty business division in 2005. As a result, the division redesigned its process to remove bottlenecks and implemented Camilion Solutions' (Toronto) Product Authority system for its product configuration capabilities, according to Steve Coryell, assistant vice president for product management, CNA.

During the engagement, Coryell reports, it became clear that the technology could help further streamline the many activities that provide inputs to the product configuration process, so CNA entered into a codevelopment initiative with Camilion to create a Product Development Workbench that manages and tracks product development workflow. The carrier plans to go live with its full suite of product development capabilities in November 2008.

According to Coryell, while the process review itself resulted in significant improvement in the coordination of product development activities, the full suite of systems is expected to cut CNA's delivery time from the current range of 54 to 140 days to a period closer to 15 to 60 days. Coryell emphasizes, however, that it's not all about speed -- equally important, he says, is the transparency enabled by process reengineering and the ability to track workflow. That transparency of process has engendered a greater appreciation internally of the difficulties and costs associated with creating new products and making changes to existing ones, and it has increased the equally critical goal of "quality to market," Coryell relates.

"If I hit my launch date but then have to go back and rework the product, I have essentially blown my speed to market," notes Coryell. "Using the workflows, having people understand the product, and having the product well-defined, -configured and -tested that is all part of quality to market."

If the kind of speed- and quality-to-market success that CNA has begun to enjoy still eludes other carriers, it is because they continue to focus disproportionately on some specific aspect of product development rather than taking a more holistic view, according to John Gorman, a senior executive in Accenture's (Chicago) North American life insurance practice. "There is a tendency to view technology or a new platform as 'the' answer to transforming a business," Gorman says. "However, before starting on the road to transformation and implementing a system, they need to have a full understanding of the target operating environment they are trying to achieve."

The problem isn't necessarily that technology is overhyped, but rather that its limits are not fully appreciated. Product configuration capabilities represent a dramatic opportunity for insurance carriers to improve speed to market for which there is no substitute. Furthermore, the availability of these capabilities in most new rules-based policy administration systems is probably the greatest single reason for those systems' popularity.

"[These capabilities are] why we strongly advocate replacing legacy systems with rules-based systems," Gorman notes. "However, many carriers have a need for overall product development process improvements that go well beyond their policy admin systems."

According to Gorman, many carriers are attempting to infuse a greater degree of discipline into the product development process through activities such as conducting more-intensive market research, seeking feedback earlier in the development process and resisting the tendency to constantly tweak products prior to introduction. Better that they should get it right the first time.

In this regard carriers may benefit from considering their role as the industry's manufacturers. Just as introducing manufacturing-like discipline to project management has helped reduce IT project failures, so can a similar approach ensure more-successful product releases. The key in both cases is a focus on up-front work.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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