Workforce Optimization: The Science of Efficiency, The Art of Customer Experience

In a persistently challenging market, business and IT executives continue to chafe at the need to "do more with less." They make more and more efficiency gains, but it’s never enough. It all seems a bit unfair. However, workforce optimization offers some avenues for further gains. These solutions — which give insurers transparency into how work is processed in the back-office and capture the data and metrics needed to more effectively management these areas — can create a more modern work environment that is simultaneously more productive, and more precisely directed at business goals, less tedious and more rewarding for employees.

Let’s consider what insurance executives are up against: The economy continues to sputter, and most insurers continue to see customer retention as a more realistic goal than customer acquisition and business growth. Insurers continue to be burdened by the cost of maintaining legacy systems, and as their competitors make headway with this efficiency challenge, they feel the pressure to keep up. Also, business technology isn’t standing still: we’re seeing the beginnings of a data analysis revolution that is likely to have profound implications for the insurance industry.

The most urgent technology pressure, however, is coming from “consumerization,” which is to say the mass adoption of anytime/anywhere computing through sophisticated mobile devices and other online technology by the general public.

In just a few years, the use of smart phones and other mobile platforms became normal for the general public, with profound implications for insurers’ customer-facing capabilities. It was essentially the second phase of the online or ecommerce revolution, and it accelerated the insurance industry’s long-term readjustment from policy-centric to customer-centric operations.

We can call this market phenomenon the customer-centric imperative. It has led to the creation of new senior customer-focused executive positions, such as chief customer officer, and it has reshaped many insurers’ strategies. At the same time, it has not reduced the requirement for business and IT executives to do things better and cheaper — what we can call the Do-More-With-Less Imperative.

What does “Doing More With Less” really mean? It has the obvious meaning of introducing ever greater efficiency into business processes and workflows. But on a deeper level it means exploiting technology to let both humans and machines do what they do best. It means fulfilling the promise of automation — speeding mindless mechanical or administrative processes and freeing up people to do the things that only humans can do well. What it means, then, is providing the means to compete in a customer-centric world by reducing operational costs, on the one hand, and maximizing customer experience both by user-friendly self-service and optimized human-mediated processes.

Most discussions about workforce optimization emphasize gains in efficiency and effectiveness. I’d like to emphasize another critical area of opportunity created by workforce optimization and, in doing so, make the point that workforce optimization isn’t just technology — it’s the intellectual discipline of analyzing how one is doing business, and exploring the possibilities for improvement.

[For more on workforce optimization, see 6 Questions to Ensure Workforce Optimization Success .]

From this point of view, efficiency remains a criterion for everything you do. But when the customer experience excellence is prioritized, efficiency must be understood as having an aesthetic dimension: think of the efficiency of a ballet dancer, a musical virtuoso or a great athlete: in their effort to please their audience, they waste no energy on extraneous or gratuitous motion. In that sense, a great customer experience isn’t an exercise in simple mechanical efficiency; it’s a kind of poetry in motion — it’s a more humanized and satisfying interaction.

Insurers must ask the question, “Who is the customer to whom we are trying to deliver this more satisfying experience?” Obviously it is the end-customer, who is the object of the whole shift away from policy to customer-centricity. In the case of most insurers it’s also the distribution partner. And for IT organization it’s also the business users. But workforce optimization also helps us to understand that the employee is also a customer. At the recent annual IASA Conference in San Diego, Tom Peters — co-author of In Search of Excellence — made just this point in his keynote address. He commented about business priorities saying that “people are first, second, third, fourth, fifth and sixth.” He said, “I’ve come to meetings like this for many years saying, ‘the customer comes first.’ I’ve changed my tune; now I say, ‘if you want to put the customer first, you have to put the person who serves the customer more first.”

To paraphrase: happy employees mean happy customers. At the very least, keeping end customers happy is going to be a lot harder if your workforce is disgruntled. Letting machines do what they do best and creating better environment for people to do what they do best will improve employees’ morale, which in turn will optimize their performance, it will improve retention of skillful and experienced people, and it will help insurers attract talent — all of which will set in motion a virtuous circle in the endeavor of competing in a customer-centric world.

[For more on the benefits of workforce optimization, see Insurers Gain Productivity, Improved Service and a Modern Work Environment Through Workforce Optimization Initiatives .]

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