In the last weeks I have been focusing on the whats and whys of Digital Transformers. This week we’ll take a close look at the hows and discuss some specific steps insurers can take to move their organizations toward becoming Digital Transformers themselves.
The overwhelming message of Accenture’s Digital Innovation Survey is that insurers understand the importance and the need to adopt digital technologies, but moving from knowledge to implementation at digital speed can be challenging.
I believe the essential point is to continuously strike a balance between two powerful imperatives: delivering profitable growth in the short term, and making the necessary investments now for a long-term transformation. My banking colleagues describe this duality as a two-speeds approach to implementing a digital strategy:
- Test and learn fast to create options and establish relationships with critical ecosystem partners, and
- Innovate the “core,” moving the dials on the basics and creating new organizational capabilities in terms of customer-centricity and agility.
The study actually pinpoints five things to bear in mind when implementing a digital strategy:
- Get the basics right. When it comes to basic capabilities, four things top the list: multi-channel excellence, customer orientation and personalization, operational simplicity, and agility and superior execution. Insurers must master these to compete both today and tomorrow.
- Define a clear strategy and business model. The best way to develop a strategy is to determine where you want to go. This involves assessing the disruption and deciding what broad business model you want to work toward. In defining this model, identifying the partnerships you need to deliver the right solutions to your customer is key, as well as a clear view of the value generated by your digital initiatives.
- Develop and nurture a customer-first digital culture, organization and workforce. Our survey respondents reported a range of barriers to digital strategy execution, including legacy systems, a lack of the right skills, and a reluctance to upset traditional distribution channels. Strong leadership, talent and organization change management are critical to overcoming these barriers.
- Build capabilities to collect data and turn it into actionable insights. As we discussed last week, data and analytics are key components of most insurers’ digital strategies. Customer data is one part of the equation, but insurers can also leverage interaction data and external data sources to provide a context for their data. One example is combining telematics and weather data to provide value-added services to drivers.
- Test and learn continuously to fine-tune all elements of the road map. We believe the best approach to introducing a digitalization strategy includes quick wins and the use of prototypes to support a test-and-learn approach that can then be scaled up. Innovations can be implemented in the form of pilots or limited-scope projects, then fine-tuned and expanded in line with the outcomes they achieve.
What is your organization doing to move toward becoming a Digital Transformer? I would love to hear from you on what steps you’re taking to reach this goal. Please feel free to contact me.
For more information download the report: Accenture Digital Innovation Survey 2014: Seizing the opportunities of digital transformation and explore the data using our data visualization tool.
Next week, we will move to a new series on the recently published annual Fjord study, and try to understand how innovation trends point to more customer influence.
Other papers on the topic that you might find useful:
Read our latest thinking on Customer Centricity