Most businesses recognize that rapidly changing technologies will, sooner rather than later, transform their operations. When well executed, modern digital transformation initiatives hold the power to improve both operating efficiency and customer experience: technology-enabled tools and training help salespeople and other staff members be more effective, while customer-facing technologies such as enhanced mobile capabilities allow service companies to forge deeper and more profitable relationships with buyers.
Although digital transformation means different things to different organizations, for most it’s a struggle to balance long-standing infrastructures, such as those in the IT and talent functions, with the changing demands and mind-sets that powerful new technologies require. Today, this challenge is especially relevant for traditional insurance businesses—they are technology-enabled but often hindered by legacy processes and systems. Their customers expect real-time transactions, more self-service options, and increased transparency into their transactions, akin to what they experience elsewhere. Meeting these expectations and modernizing operations presents a huge opportunity for firms to carve out advantages, deepen relations with customers, and address cost and speed-to-market concerns.
In late 2015, a regional division of one of the world’s largest insurers publicly acknowledged that digitization—which included improved digital capabilities for its agents, straight-through processing, enhanced mobile platforms to better engage with customers, and improved analytics capabilities—would be a linchpin for its growth. In early 2016, the COO of that division enlisted Protiviti to assess the region’s IT organization and its ability to support a digital transformation.
At times, companies are both beneficiaries and victims of technology. Nowhere is that more true than in financial services—while it’s a technology-enabled industry, these firms tend to have cutting-edge technologies sitting side by side with mainframe computers and other systems that are 30 to 40 years old. This organization was no exception. It had kept up with many technological advancements, such as deploying a new customer portal, but it also supported decades-old systems, including 15 separate policy administration systems that carried with them a host of paper-based processes.
Furthermore, the insurer was deficient on a few key digital basics. While its leaders wanted to be able to engage with their customers online, the organization had collected e-mail addresses for only 3 percent of its customers. And although IT leaders frequently talked about the importance of data, they had not implemented any sort of business intelligence (BI) tool.
To make matters worse, the organization had experienced a series of debilitating systems outages, many of which were attributed to changes that had been improperly tested or ineffectively implemented. Among the insurer’s other businesses, these problems undermined confidence in the IT organization. Also adding to IT’s challenges was its heavy dependence on third-party vendors. The lack of technical depth within its own staff made it difficult for the organization to assert control over its environment.
While the picture at that time may have appeared gloomy, the insurer’s leaders had the foresight to acknowledge where they were, and they had a vision for where they wanted to go. What they needed was a plan for how to get there.
Starting in February 2016, Protiviti undertook a multidisciplinary, four-pronged approach to evaluate whether the organization’s IT capabilities were capable of executing their digital strategy. This assessment included the following elements:
By April 2016, the evaluation was complete, and the results revealed that the company was significantly behind where it needed to be to meet its goals. The Protiviti team delivered a comprehensive, 18-month road map to close the gaps we had identified.
The organization has started its journey and is currently building these capabilities and programs. They are focused on increasing the speed and quality with which they operate and implement. Although it’s too early to declare victory, the organization has begun making significant changes to adopt an enterprise architecture as well as the critical digital mind-sets that will fuel its digitization and modernization efforts.