Many insurers take a ‘if we build it, they will come’ approach to their digital strategy, which is why a lot of these initiatives can easily lose their way.
As I’ve mentioned in previous articles, organisational structure is key to success in any digital transformation, and it should ultimately underpin the basis of your target operating model. Your digital strategy should not only be addressing technology, evolving process, enhancing efficiencies (and hopefully reducing cost), but also it should provide you with the operating model for the business you want to be.
This all sounds well and good, but back in the real world, freeing up resource, removing knowledge from the operation to go and work on what’s perceived as the ‘new and shiny’ can result in either big holes in the (traditional) business, or key project people being pulled back to the business later, impacting the digital strategy itself. To address this, many companies take the easy option of either hiring in temporary contractors, or handing over their entire digital strategy to a consultancy to develop and execute. The issue with this approach is obviously that the new guys don’t know anything about even the most basic business process, and in handing the work back to the business, adoption is almost zero as the (traditional) business have had no involvement in shaping it, it might not be fit for purpose, and ultimately it will have no buy-in.
One solution to this issue to take the bi-modal approach, and operate as (almost) two businesses. One which continues with the traditional way of working, whilst the other focuses solely on the outcome of the digital strategy. There is a discipline and an agreement in this approach which says that once the team is formed to move forward with the digital strategy, they belong to the future operating model, and that team can only expand, and can never be reduced. The outcomes of that team should strip, reshape, make more efficient, all of the traditional processes, and as teams are redeployed from old to new operating models they underpin the digital strategy.
From conception to operational ‘run’, the digital strategy should always be focused on continuous improvement, continuous innovation, and constant monitoring and management of digital assets. This is not a project, and it will never be ‘complete’, this is the future of your business.
The final challenge for any insurer taking on this bi-modal approach is having the freedom of think, the environment to have open conversations about how to achieve key business objectives and get ahead of the game, while having the safety to fail fast (and often, without recourse). Aside from wholesale handing over to a consultancy who may be more mature, may miss the point or work to their own agenda, my advice would be to find partner who speaks your language and provides all of the above things you will need. There is a tipping point between the current (traditional) operating model and the target (digital) operating models, and as soon as you have the vision, momentum and belief, hopefully this will bring the confidence to progress and evolve autonomously.
The fact that you have transformed your operation today is only a temporary reprieve. You need to redefine your business model to be an agile platform continually identifying and innovating to improve end-customer quality of life