The task of turning data into an operational asset rather than a liability can be a complicated process. Sometimes it's the simple and common themes that resonate best in times of uncertainty.The concept "less is more" is regarded as a driving principle to developing a data warehouse for the purpose of enhancing a business intelligence strategy. "Building a huge data warehouse does not work if the idea is to obtain an enterprise-wide, 360-degree view of customers," says Bill Sinn, vice president, insurance healthcare marketing for Dayton, Ohio-based Teradata Corp., a provider of enterprise data warehouse solutions. "The question of 'how do you eat an elephant' certainly applies in this instance. The way you eat an elephant is, of course, one bite at a time."
Insurers that designed data warehouses several years ago may have been inclined to bite off much more than they could chew, indiscriminately loading data sources into the central repository despite the fact some of the data was marginal.
Over time, an insurer may have created 50 to 100 data marts, without considering the significant cost of keeping those marts active, and without evaluating whether or not some of those marts serve a useful long-term purpose. It becomes a huge drain on resources, explains Sinn.
Another common theme that serves insurers well is that it pays to be vigilant. Data stewardship strategies can put an insurer on a smoother path to leveraging its data to the highest level.
"Nationwide (Financial Services Co.) has won numerous awards for its strategic and tactical approach to data," says Sinn. "It is adept at data governance and driving value from data while having a firm handle on measuring ROI behind data-driven projects."
Columbus, Ohio-based Nationwide has gone about mastering its data in a slow but sure pace, Sinn explains. Many insurers have erred by moving too quickly-and without focus-in carrying out one or several automation projects. Data-oriented projects are notorious for undermining that focus. In the end, insurers that pace themselves, such as Nationwide, will prevail, Sinn believes.
Flexibility is yet a third axiom that insurers are wise to adhere to. Over the years, a percentage of insurers might recognize business intelligence as the means to one end-perhaps using data in a customer-centric fashion. "Insurers have obsessed at times over how good data translates mainly into creating a single customer record to identify customer needs and tendencies," says Matthew Josefowicz, senior analyst for Boston-based research and consulting firm Celent Communications Inc.
"While that effort is very important, there's much more to it than that. That's why insurers should shift the emphasis to center on operational areas, such as risk management, underwriting, regulatory compliance and fraud detection," he adds.
"For instance, insurers should seriously consider deploying data intelligence to craft a strategy to comply with the USA PATRIOT Act, which entails checking for patterns of fraud against the government's OFAC list. They also should target data intelligence solutions for claims analysis so that an insurer can route claims to the appropriate agent with specific expertise," he says.
