The benefits of digital transformation are universally recognized, if not achieved. Industry reports have repeatedly found that transformation initiatives can provide insurers with greater cost savings, efficiency, segmentation ability, fraud prediction, and risk assessment capabilities.
Carriers have taken this potential and run with it; according to a recent report published by Accenture in partnership with Oxford Economics, roughly 90% of insurers have developed a long-term innovation plan to integrate technology into their operations. Of those, 40% believed the digital investment would boost customer loyalty, 37% thought it would generate new revenue streams, and 30% hoped it would allow them to expand their market share.
The business case for undergoing digital transformation is unassailable. However, actually transforming can be easier said than done; for all that value transformation provides is universally agreed-upon, there’s often less consensus among executives on what digital transformation means for their specific organization.
What Makes a Successful Digital Transformation?
Per Salesforce, digital transformation is defined as: “the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements.” In other words, it’s a comprehensive creative process that reimagines an organization’s methodology and operations for the digital age.
At a 10,000-foot view, this explanation appears to be relatively straightforward. However, translating a high-level transformation mission into practical and achievable steps can be difficult, especially if executives aren’t aligned on their ideal future state or approach. After all, the transformation is not one-size-fits-all; it must be tailored to an organization’s unique capabilities, challenges, and goals.
Not having a clear “destination” in place makes it difficult for organizations to achieve their transformation objectives — or reap digitization benefits. When executives lack alignment, they tend to apply a scattershot approach to transformation. This, in turn, can slow progress, reduce transformation momentum, and even lessen the value new digital tools provide.
“Today, most insurers don’t have a systematic method to handle the various types of competition. Instead, they’re responding with a ‘trial and error’ approach, which is doomed to fail,” PwC analysts explained in a recent report on the matter. “A solid strategy that aims to develop a competitive advantage typically requires a ‘north star’ to head toward.”
Striking a Balance Between Planning and Flexibility
Executives embarking on a digital transformation journey need to have a destination in mind. However, over planning can pose a different set of risks.
Innovation initiatives often take three to five years to complete — and one of the biggest mistakes that executives can make is meticulously planning out every step. A great deal can change in six months, let alone five years. If executives don’t leave themselves with room to adjust, they may find themselves committing time and resources to plans that don’t suit the organization’s evolving needs.
Successful transformation leaders strike a balance by creating a high-impact innovation roadmap. Such plans allow organizations to set a path to their ideal future state without marking every metaphorical “rest stop.”
Understanding the Value of Having a Digital Transformation “Roadmap”
Roadmaps take an iterative approach to innovation management. Rather than launch a single, comprehensive digital framework, leaders cultivate multiple bets across the value chain via Minimum Viable Products (MVPs). They then fine-tune and expand these MVPs into comprehensive and well-integrated solutions. This flexible but planned approach gives executives the time and latitude they need to customize digital tools without disrupting daily operations or over-investing in unworkable solutions.
All this said, a roadmap isn’t easy to chart without professional assistance — nor is it advisable for executives to attempt to do so. Transformation initiatives are complex, expensive, and time-consuming; not having a consultant on-hand to help navigate the process can be a costly mistake. To ensure the process goes smoothly, leaders should connect with an implementation partner who can bridge the knowledge gap between an organization and its chosen solutions provider.
“You need to find a partner who knows your business like the back of their hand,” Rich Fusinski, CIO of the H.W. Kaufman Group, reflected on his organization’s recent digital transformation during a Gerent webinar. “And I can’t stress how important it is to work with your technology partner to find a software vendor that truly meets your needs. Interview them incessantly until you’re satisfied, and then make sure they’ll stick with you, because transformation is a long-haul process.”
At Gerent, we view every transformation as an opportunity for collaboration and discovery. When we work with a client, we take the time to thoroughly understand their organizations, problems, and ideal future states. Moreover, we have the implementation experience necessary to ensure that our partners obtain the solutions they need on time and within budget.
Don’t wait; kickstart your organization’s journey towards its ideal future state! Contact us today for a personalized consultation — or read our latest whitepaper for more information on what you can expect from an MVP-driven transformation journey!