6 Keys to Balancing Goals in Insurance Digitalization
The digital era has come upon us fairly rapidly, driven by the mobile technology revolution and smart devices. As with other major transformations, the initial response by insurers has been to introduce mobile apps as extensions to their web applications. As the technology has matured and concerns about security have started to fade, organizations are looking at digital transformation comprehensively, as opposed to short-term, piecemeal projects. MIT researchers interviewed 157 executives at 50 companies and found that firms are digitally transforming three key areas of their enterprises: customer experience, operational processes, and Business models.
Organizations need to define their digital mission and strategy in terms of both short-term and long-term objectives and prioritize their implementation based on investments and benefits. Understanding key stakeholder and consumer needs is necessary for successful adoption of digital technologies. Typically, this will cover increased brand awareness in the marketplace, enhanced customer engagement, and increased revenue productivity. This means looking at all aspects of the business from outside in to inside out and technologies spanning mobility, big data, the cloud, and the Internet of Things. It also opens up age-old issues of legacy architecture -- lack of a single source of truth for customer data, along with disparate and siloed business processes.
[Previously from Koka: The Insurance Customer Experience Vision]
In order to be successful, you need to consider these six elements of your digital strategy:
Business model
The digital revolution has changed consumer shopping and buying habits. The millennial generation in particular interacts with businesses using social media and smart devices, rather than conventional means.
The primary questions will be "What markets do you want to focus on?" and "What products and channels do you want to optimize?" This will drive your investment strategy and the digital capabilities you will need to support the model. You will probably have to redesign your organization to align with your business model.
Solution design and architecture
Digital capabilities will have to be mapped to the business processes. You will need to rationalize the systems that you would like to enhance and third-party systems that may be needed to achieve your desired transformation goals, because you will need to interface with several external systems. Customer experience is a key element of the design and has become a hygiene factor in order to be competitive in the marketplace and to engage effectively with your customers and partners.
Information architecture
Master data management is critical to ensure accurate information and a single source of truth about customers, their preferences, their profiles, and the products they own. Delivering appropriate content based on the profile from millennials to baby boomers is a challenge you have to address. Leveraging data analytics using the volume, variety, and velocity of information gathered by social media and other agencies has become key to market segmentation and precision digital marketing campaigns.
Technical architecture
The enterprise technical architecture will need to be assessed to ensure that applications can support web and smart devices and can adapt the user interaction and content based on context and the size of the device display. There is a need to support an omnichannel customer experience, because users are likely to start a process in one platform and complete it in another based on context and convenience. Privacy and security issues have to be handled for the mobile devices. Synchronization of data on the mobile platform with systems of record and master data will have to be ensured.
People and skills
Digital transformation is as much an exercise in change management and reskilling people as it is in systems transformation. Hiring people with skills for new roles like social media analysts, user experience designers, digital marketing personnel, and mobile developers will be required.
Operating model and governance
Developing a roadmap typically covering a three-year horizon, as well as digital capabilities that align with business needs and brand promise, is essential. Strong program management will ensure that the projects are executed efficiently, and that all stakeholders are managed appropriately.
Measurement of outcomes is highly recommended based on key performance indicators that are agreed with the business executives.
Time is of the essence, as it was with earlier transformations. Organizations that plan and execute their digital strategies well will reap the benefits in terms of their brand value, increased market share, and innovative business models that will keep them ahead of the competition.
Ravi Koka is a Partner and CTO Insurance products at Polaris Financial Technology Limited, a leading provider of enterprise software for the banking and insurance industry. Prior to this he founded SEEC Inc. and successfully completed SEEC's IPO on Nasdaq in 1997. Koka ... View Full Bio
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