You can’t discuss an integrated plan without considering the role technology will play. In last week’s post, Aligning the elements: The integrated plan in action, I discussed how important it is to have an integrated plan that is central to how the business in managed. Technology is a key component of an integrated plan. Fragmented technology can be a significant barrier to running a coordinated planning process that considers the risk and reward trade-off when making strategic decisions. Let’s take a closer look at how insurers can respond.
Four technology areas for assessing risk and reward trade-off
Accenture finds that insurers should focus on four specific technology areas when considering an integrated planning approach:
- Enterprise planning application can integrate group level planning, budgeting and forecasting information with consistent drill down to business units, legal entities, countries and lines of business. The application can also provide a central repository for all of the elements covered by an integrated plan with changes subject to a clear audit trail.
- Finance and risk architecture is critical to business decision making. Along with traditional planning information, there can be information on the corresponding solvency requirement, regulatory balance sheet and relevant key risk metrics.
- Data management needs to focus on the storage of information in a consistent format with the requisite controls to ensure the improvement in data quality over time.
- Integrated reporting, when combined with planning and finance and risk architecture, can help the board and senior management evaluate the performance of the company.
The chart below illustrates how the four technology areas can work together for an effective planning process:
Insurers have already made significant investments in standardizing and simplifying their finance and risk technology to comply with regulatory requirements—but they’ll need to do more, especially if they want to achieve further benefits. An effective, integrated technology infrastructure is the backbone of a successful integrated plan. The next step is to deliver it. Join me next week, when I discuss the critical success factors for delivering an integrated plan.
To learn more in the meantime, download Integrating Risk and Capital Management into Strategy and Planning (PDF; opens in a new window).
Read other posts in this series: