NOVEL THINKING

“Agile principles are now standard operating procedure for software design,” says Marcus Ryu, “but they’re also applicable any time you need to orchestrate a large number of people to get something complex and multi-faceted done over an extended time frame.”. But insurers can be made to feel they are being asked to jettison the things that have made them successful and adopt an untested culture. Cycle times will be shorter and costs will fall. Customers will be delighted, cost savings can be as high as 40 percent, and effectiveness, measured in return on investment, can rise by as much as five percentage points. Whatever structures a company chooses initially, it will reach the stage when only a fundamental organizational redesign will do. Everything you need to know, Digital transformation: It's time to invent the future we want (TechRepublic). Find out by downloading the free PDF ebook version of a special report from ZDNet and TechRepublic.

More will present themselves during the first six to 18 months—the launch and acceleration phase—when initial changes have to start taking root, and yet others will arise during the long haul of subsequent years, when digital initiatives need to be scaled across the enterprise and digital capabilities and new ways of working become the lifeblood of the company. Digital transformation: the post-industrial utility. Similarly, ING branded its transformation “Fast Forward.”, With the vision set, results are then achieved through relentless daily engagement. The digital unit therefore needs to be reintegrated at some stage, and that becomes more difficult as time passes. Please try again later. Melanie Wolkoff Wachsman Any transformation will be dead in the water if it does not have the commitment of the CEO and the leadership team. Digital transformation is likely to require significant investment.

External benchmarking can help in this respect by reinforcing the conviction that cutting the time it takes to, say, process a claims submission from 90 minutes to 20 is not good enough if someone else has reduced it to four. It's also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure. Importantly, companies will need to allocate investment both to improve the current business and to build new businesses as the insurance model evolves. <>/Metadata 7399 0 R/ViewerPreferences 7400 0 R>> So why bet on an uncertain future and risk cannibalizing existing profits or alienating distributors when they face more pressing issues, such as regulatory compliance? hޔZ]�G�+�x�`�2�>�d������iу���HB�p��9=^MO�v���鉊�Έ���Q1��j������C��4���4t�T���Ѡ5�aL�>a�$M�PM 8�����.k�J+&�/w'ZHp�|�a�>9hM�X�-�f��*���chG�U��/bq3�)�_l=N�h+��)\X�R�@BL�5���rͬ[8S C�D�=$�+#���+9$P���X�2xj�!���g��^C���HOk����q=�!č�X$�/ x Customer satisfaction is likely to jump. If you would like information about this content we will be happy to work with you. Something went wrong. You may unsubscribe from these newsletters at any time. You can download all of the articles in this special report in one PDF (free registration required). ", Plus, ZDNet's Aimee Chanthadavong details how Aspen Medical replaced eight core legacy systems with a single cloud platform in the article "Aspen Medical's infrastructure overhaul puts it into gear for Fijian hospital project.". A closing thought, and perhaps one that reframes the challenge: the term digital transformation puts the emphasis on technological change. And when initiatives are successful and deliver the intended financial benefits, the board and top team should be emboldened to push to achieve more. collaboration with select social media and trusted analytics partners Find out by downloading the free PDF ebook version of a special report from ZDNet and TechRepublic. Typically, companies also struggle with cultural issues and challenges in recruiting new types of talent. The scarcity of elite data scientists, for example, has been a factor in some insurers’ acquisitions of cutting-edge artificial intelligence start-ups; $5 million to $10 million per employee can be commanded in these so-called “acquihire” deals. ��W��=�h��Vg9��'(���d5A å]:�l�����x6���z���I�>_.�v��j1�j|���?� “Our CEO is chirping in my ear the whole time. The importance of securing a high-caliber launch team, often under a CDO, cannot be overstated. ���Uj�/�u|�ؑ���q��B�`�,�y*@ ]��)A�� %����!9���;xD��I����!:.9g��S��C�0%�x*��JLx"7�6. While TechRepublic's Melanie Wolkoff Wachsman summarizes the results of a TechRepublic Premium survey in the infographic "Survey: 60% of respondents have altered digital transformation plans due to COVID-19. Second, setting clear targets at the outset prevents back-sliding when the going gets tough. cookies, McKinsey_Website_Accessibility@mckinsey.com. endstream endobj startxref x���]o�0��#�?��ɩ��gH��J�Z� �4M�Ȩ � ْL�����~�j:�4!9�9�y���?,�t�+]��7�a�(c����bP�y����+ I�:��`�s&���͉�q���#s����OB�{�����0����k(&���B)�:35�4�D@�r�J4�c�^[�Mu&_R�C �>ܡZ��v.����i��|6vv�qKW�aŽO���6�%��7ڔ�!�߹�^ryg��u>���� 2�m�)���$5%x� z�:����6?�M EG��Iߧ���с���HڳeÙ&i�I���)q��r��X��*ͳC��_�;�Y@C�ȳ�� �O�٬�n�5� e�*� &�MGޱ��n.���B+��Mpg�t���䌌��d��d�$.��*�;me��zW�3xP/�̔6�l����� Setting up a digital unit independently of the organization will promote new ways of working essential for digital success, such as agile product development, test-and-learn methods that speed progress while keeping the focus on customers, and cross-functional teams that pool specific types of expertise. To set the organization’s sights at the right level, investments need to be linked to clear, ambitious targets. “The reason traditional agency distribution hasn’t innovated is because it’s very hard to find someone steeped in digital who also understands field sales, and vice-versa,” she says. The more value a transformation captures as it progresses, the more it becomes self-funding and the greater the support it garners. Targets are needed for each source of value creation—cost savings, revenues, improved performance of agents, and satisfaction of employees and customers—and for new ways of working and the new capabilities required. To begin with, newcomers can (unintentionally) run roughshod over what is valuable in an incumbent: the reason many insurance companies have been around for more than a century is that they excel at what they do. <> Marcus Ryu, cofounder and CEO at Guidewire Software, contends that it is only by modernizing core operating platforms—most importantly policy administration, billing, and claims systems—that insurers can externalize the data and business logic necessary to deliver a satisfying digital experience for the policyholder or distribution partner. Make a solid plan first." Sources of revenue, efficiency, and the organization’s structure are all up for scrutiny, as are talent models, which need to offer more flexible, more empowering, and more rewarding career paths. N��/�]2VM����enM�a�F[�}���e�ܘ%�=MRl'��fP�l��6Ȇ��d��>1����ߜ�s�@���g�q��ϓ��

To set a digital transformation on the right course a company must place it at the core of its agenda, and understand the magnitude of that undertaking. So will its IT, if legacy systems restrict initial choices. If such people are simply parachuted into the existing structures of incumbents they can become bored and frustrated at the pace of change. A growing number of executives, though, are facing up to digital reality. Most transformations fail. He just starts talking to people. TechRepublic's Karen Roby talks with futurist Brian Solis about the trends shaping digital transformation in "Digital transformation: Why companies need a sense of urgency.". It could prove hard to recruit the particular people needed, while technology and customer behavior will continue to evolve. hereLearn more about cookies, Opens in new Read about the results and analysis in the article "800 IT leaders share insights on the state of digital transformation" by ZDNet contributor Vala Afshar. Some companies go further than hiring individuals and acquire agencies that specialize in design thinking. There is a lack of consensus about its definition … They have therefore taken steps toward transforming their businesses. It needs to be provocative, disruptive, ambitious, and often uncomfortable sponsorship to be successful.”.

IT projects fall behind schedule, channel conflicts arise, and unexpected regulatory concerns emerge. Advertise | The future of insurance will be digital. | Topic: Digital Transformation: A CXO's Guide. stream They are far enough advanced to know that each stage of the transformation will present challenges. A company can be certain that if it does not match that benchmark soon, others will.

FOUNDATIONS OF ARTIFICIAL INTELLIGENCE ACCELERATING DIGITAL TRANSFORMATION …

That statement seems almost glib, given how often CEO commitment is positioned as the solution to any major challenge. Andrew Brem, chief digital officer of Aviva, says CEOs need to be “single-minded and aggressive” about driving the transformation. endobj { �.�%���`hA1�2� ��g���yA�%?

It is not for the fainthearted, but CEOs are heading in the right direction if they grasp the fundamental importance of heavyweight management commitment, are willing to make significant investments, and set clear, ambitious targets. The way a company organizes itself is key to a successful launch. ��8o�p�U>ۙ�1�N�-�"�J�NH ���6���Ă;���%K Often companies decide to fund several, assign people, even set up separate units. Digital transformation is widely discussed and is impacting every company. Already, the industry’s digital pioneers are meeting these challenges and demonstrating to fellow CEOs ways in which they can be overcome. By now it will be apparent that insurers will have to invest in more than just digital technologies themselves to scale up digital initiatives. Sequencing with a view to quick returns is key to building scale fast. By signing up, you agree to receive the selected newsletter(s) which you may unsubscribe from at any time. And there are relatively easy ways to kick-start change and gain support. And they’ve brought in a lot of people too. <> And to reap the full rewards of a transformation, eventually an entirely new operating model will be required. That is not a huge number, but the competition for digital talent and the advantage technology companies have in attracting it makes finding people of the highest caliber a considerable challenge. A huge internal training job will be needed too. So why can't they find anyone to do it? h�b```����@(�����������T�����A,��$^0�3�6�88˲�nȺ�Ģ�$����t

But context matters. Our flagship business publication has been defining and informing the senior-management agenda since 1964. Norway Torbjorn Folgero, Equinor Bergen 3 United States Saskia Steinacker, Bayer New York 1 … ʣFP#L#(��Mq�ޫK9��!~��/�U��/��#.N�^�}��R��8�J�钻ɯ5T�g��W0U�@�r�z�@Նq��� In the article "Overnight digital transformation: Welcome to the year 2025, 60 months early," ZDNet contributor Joe McKendrick explores why the rush is on to digitally transform everything. Digital transformation is a concept that increasingly figures at . Ultimately, however, it will be important to help all employees rethink the way they work, as the end result of a digital transformation is the establishment of a company-wide agile operating model.

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