As we discussed in last week’s post, a new Accenture-sponsored study shows that, although companies recognize the importance of the As-a-Service economy, most companies do not consider themselves prepared to buy and receive services on this basis.
This is certainly evident in insurance, where companies face the challenges of dealing not only with legacy systems but with high volumes of transactions and vast quantities of data. Many insurers find that the business of running large data centers is a distraction from the real business of developing and distributing insurance products that serve customers’ needs.
The study offers some big-picture recommendations for how companies can get themselves in position to take advantage of this major technological and economic shift, including:
- Address the disconnect between leadership ambition and operation lethargy. One of the biggest obstacles to the As-a-Service ideal is the huge chasm between the desire of operations leadership to make the transition and the lethargy of the middle management layer. If this gap cannot be closed, enterprises will eventually see their competitiveness slip away due to an overly complex, expensive and inefficient operating model.
- Go for more “big bang change.” Companies need to create a “pivot point” for their transformation. Incremental fixes are not working for all stakeholders. We have entered an economy where writing off legacy investments needs to occur.
- Collaboration is key. Service buyers and providers need to group together in unprecedented ways to embrace change, disruption and design thinking approaches.
- Focus on talent development and workforce engagement. The focus needs to shift from skills to capabilities, and create an environment where people have the freedom to mold their careers and cross functional boundaries to add more value to their enterprises.
- Take advantage of technology to simplify operations. Leverage technology to effectively simplify process automation, to support smarter analytics, to embrace the mobile experience, and to leverage cloud-based solutions and security elements.
These are important considerations, particularly as insurers prepare their capital and operating budgets for 2016 and beyond. As-a-Service and/or cloud based delivery models open doors for quick, nimble competitors and insurers should be looking at ways, not just to fend off the competition, but to be competitive threats in their own right.