History has seen different technology revolutions: the industrial revolution in the late 1700’s, the information and telecommunications revolution in the mid 1900’s, and the digital revolution of the present. Each revolution has taken advantage of the new technologies of its day, creating disruption, innovation, and business transformation. Businesses have either grown or died based on how they adapted to and innovated with the new technology and responded to customers’ reactions, acceptance, and expectations.
Today is no different. But it is much more intense. The digital revolution is being powered by today’s hyper-connected world and the convergence of multiple influencers maturing technologies, emerging technologies, the shared economy, and demographic trends to name just a few. And it is creating new experiences, new products and services, new outcomes, new business and revenue models, and generating an explosion of data from new and emerging technologies such as mobile, social media, and the Internet of Things.
The combination of these factors is transforming existing businesses and creating new ones within insurance. From managing value chains to managing ecosystems, the business transformation is powered by the fusion of technology and data. At the same time, these factors and the pervasive use of technology are lowering the entry barriers for disruptors and competitors from other industries, changing the competitive landscape for insurance in profound ways.
SMA’s foundational report, “The Digital Insurer: A Framework for Enterprise Capabilities in the Digital Age,” outlines the critical business architecture components needed for digital transformation. The new complementing report, “The Unified Digital Strategy: Succeeding in the Digital Revolution” dives deeper into one of those components, the unified digital strategy, recognizing that all business strategies and technologies touch the customer in some way, directly or indirectly influencing the customer experience, ultimately defining and shaping the customer relationship.
In today’s new world, Next-Gen insurers must be digital insurers. They must reimagine themselves and embrace the full breadth and depth of the mature and emerging technologies that are changing customer engagement, transforming products and services, redefining business and revenue models, and breaking down the barriers to new entrants, as discussed in SMA’s The Next-Gen Insurer: Fueled by Innovation research report. They must embrace digitalization to reshape the way their businesses approach value creation and offer a compelling customer experience. In today’s world, insurers must transition from managing value chains to managing ecosystems in order to power their businesses as digital companies.
Many insurers indicate that they are on the strategic journey toward becoming a digital insurer. They are making investments in digital initiatives and technologies, often in a tactical and reactionary approach that is reflected in fragmented strategies and investments in technologies. Forays into new websites, smart-phone apps, agent portals, customer portals, collaboration, connected environments, and social media are a start, but these can result in an inconsistent and incomplete customer experience. More importantly, they may delay the establishment of a competitive digital business model foundation with technology embedded. The issue is that these siloed approaches lack a strategic framework that cohesively brings together the unified digital strategy that will become the driver of market differentiation, business growth, innovation, collaboration, and profitability.
A unified digital strategy recognizes that all business strategies and technologies touch the customer in some way and that a one-size-fits-all channel model is obsolete. In today’s digital world, this means making a serious commitment to provide real ease-of-doing-business based on customer expectations for every type of interaction through any channel, via any device, to win and retain customers. The strategic components of a unified digital strategy will connect the right people, processes, and technologies.
The unified digital strategy is multi-dimensional and brings together areas of business strategy to drive design and develop efficiency and consistency, while providing the foundation for unified experiences across all the customer touch points, now and in the future. Each of these business strategies reflect existing, new, and emerging aspects based on the influence of demographics, behaviors, and technologies. The strategies include the Brand Strategy, Marketing Communication Strategy, Customer Relationship Strategy, Web Strategy, Mobile Strategy, IoT/Connected Strategy, Social Strategy, Collaboration Strategy, and Intranet Strategy.
Today’s and tomorrow’s insurance customers are looking for much more than interacting online. They are looking for choice, engagement, social alignment, and more. Some insurers have begun or are well along on the digital transformation journey. But becoming a Next-Gen Insurer that will be recognized as a digital leader demands both technology and leadership dimensions that move the company forward in a coordinated and effective way.
From a technology perspective, the digital insurer business architecture framework provides a transformation roadmap to assess and define a path that helps guide the organizational change, leveraging a wide-array of technologies from core business solutions to emerging technologies like mobile, the Internet of Things, collaboration, analytics, and others. In the leadership dimension, digital leaders seek capabilities that envision and drive the transformation across the organization in a coordinated, consistent manner. These digital leaders work across the traditional departments and silos of an organization to ensure that the strategies are cohesive and working toward the common vision to shape a new future brought about and inspired by technology change.
Becoming a digital insurer demands leadership from the top and leadership to drive the digital transformation. This requires a unified digital strategy fortified by existing, new, and emerging technologies.
So embrace the digital world. Re-envision yourself as a digital business. See the possibilities. Define a unified digital strategy that brings the business strategies and technologies together to cohesively guide your transformation. Make it happen, because the digital future is already well upon us.
This blog entry has been reprinted with permission.
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The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.
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