Discover how an incremental approach to the modernization of your business is the intelligent roadmap for the insurance industry
Digital transformation. For the insurance sector, these two words embody disruption. They see digital transformation as a challenge that has to be overcome. As the demanding neighbor that’s insisting on changing everything and upending traditional systems that have been in place for years. It’s perceived as an all-in-one transformation of legacy systems that has to be done, today, immersing the business into new technologies and solutions that are different and overwhelming. It’s a muddied pool filled with technology complexity and little visibility into the why, what, and how of digital transformation.
Insurance companies are facing complex markets and customers, particularly in light of the recent global economic upheaval and the ongoing uncertainty. These organizations need sustainability and consistency. It’s easy to understand why there is reluctance to change.
However, the idea that firms have to completely revise and reshape their entire infrastructure to achieve digital innovation is false. The elephant analogy has never been more apt than when applied to the question of digital transformation. How do you transform? One incremental and intelligent step at a time.
Digital doesn’t have to be disruptive. This is the heading of a recent piece in the Harvard Business Review that unpacks exactly what digital transformation means and why leveraging digital doesn’t mean losing sight of the business or wading through unnecessary complexity. The real value of digital is in its ability to refine processes and improve very specific business targets. It can be carefully and strategically implemented across the organization in alignment with business strategy. Strategy is key. In a recent study, McKinsey highlights the importance of reimagining the role of technology so as to future-proof the business in ways that reinvent service offerings and capabilities.
As the Harvard article points out – it has become extremely difficult for companies to determine what technology to use and when, because the evolution is so consistent and the variety so vast. This means that the process of digital transformation must be carefully managed over time, replacing key pieces of infrastructure carefully and methodically.
The real question is, how? Through a stepwise approach.
Step 01: Set a broad goal for your digital transformation project
First, your IT and company management team must determine what the broad goal of the project is. You need to compile a list of requirements that your project needs to address to reach this goal. This outline should mention any operations, business processes, or insights that the company wishes to improve. For example, creating open access to your customers’ information (360-degree view of the customer) or automating manual processes such as tracking and updating claims statuses. With this information, you can build a solution with the necessary components to enhance business performance.
Step 02: Identify the burning issues
After the requirement list is complete, you need to analyze it to determine which requirements are the most important and are likely to achieve your main goal. At this phase, you must be prepared to make compromises as you will not be able to effectively reach your end goal by addressing all your business issues in a single solution building process. The trick is to use an incremental approach to address your set of business requirements. It is vital that you and your team know precisely what you want your future system to do.
Step 03: Implement solutions that solve the burning issue
Once your solution has been successfully integrated, verified and tested, it’s time to go live with the new system in place. It is up to you and your team to improve the workflow of your company and identify the results of the project. It is crucial to ensure that all team members familiarize themselves with the system in order to effectively implement your solution and understand how the new system works.
Step: 04: Evaluate the performance of your solution
Measuring the success of your project is the next step. To make the best evaluation, you need to compare the performance of your solution to the requirements and goals set out at the beginning of your project. Using this method will allow you to identify areas of improvement and increase your company's productivity. This type of micro-innovation leads to macro-innovation which has the potential to completely transform and dramatically improve the way that your business operates.
Step 05: Repeat the process
Gather the project team together and discuss the work that has been done with the aim of uncovering what the next burning issue is. Return to step 1 to ensure that you and your team still have a good understanding of what the broad goals of your digital transformation project are, and repeat the process.
But…
Legacy systems present their own fair share of risk as vulnerabilities can be exploited, or systems can go down. They need the support and evolution offered by digital to plug the gaps, improve the efficiencies and reduce the risks.
Digital transformation is not front line combat with technology. It’s an opportunity to put the insurance organization on a solid and agile foundation that opens up potential, transforms customer services, and embeds business resilience.
It is a bright future for the insurance organization that adopts a steady and intelligent approach to digital transformation. It allows for step-by-step improvements within the business that are aligned to strategy and customer expectations, giving it a much-needed advantage in a highly competitive space. McKinsey found that modernization can potentially result in a 40% IT cost reduction, 40% increase in operations productivity, more accurate claims handling, reduced churn, and significant value across services and premiums. It sets the company up to exceed expectations in the future, and with an incremental strategy, it does so with minimum disruption and maximum value.
Collaboration with a trusted partner goes a long way towards mapping out a sustainable and stable IT investment. Synatic’s intelligent integration platform provides organizations with the tools and support required to navigate the digital transformation landscape more efficiently, and more in line with overall business strategy. Collaboration with expert third-party service providers, such as Synatic, not only makes the digital hill far easier to climb, but ensures that the technology and investment deliver measurable return on investment and long-term scale.
