By Tom Murray, Head of Product Strategy LifePlus Solutions, Majesco
In these days of rapid technological change, there is no place for these kind of mammoth projects. No insurer can afford the luxury of being distracted by the major internal upheaval that they bring with them. Businesses need to keep focused on their customers. Nor can they afford to run the risk of investing a huge amount of money in a long term project that might have been judged ideal at the beginning, but which may not suit the market that has evolved by the time it goes live.
Insurers wishing to thrive in the fast moving market of financial services have got to react quickly; to be able to respond to competitors’ moves and to innovate to meet market conditions. Their focus has to be on rapid speed to market for new projects.
This demands an IT department that is responsive to the business areas and equipped with the tools to deliver to them quickly. It needs a platform that supports the rapid launch of new products and digital services to the market.
A digital platform can form the gateway to a new eCommerce world, providing digital services to the market whilst sitting in front of and leveraging the strengths of existing legacy systems. These legacy systems currently hold the bulk of most companies’ data on their policyholders and therefore can provide huge amounts of information on the needs and behaviours of their existing customers, information that can be vital to the development of successful new products and services.
But it is not enough to have the technology. The company also needs to re-orient itself to support quick and cheap pilots for new ideas. This means developing and supporting a culture that will encourage the business areas to innovate and experiment. Developing this culture is easier done if the innovation process doesn’t lock the company into any particular project by large budget expenditures. This kind of big bet approach can stifle progress; by requiring a large commitment from the company, it leads to expensive over-analysis at the start and a refusal or inability to change once the initiative is underway.
In order to shift the mindset of the organisation, the business needs to judge proposed IT projects differently. If a proposed project is going to take a long time, the risk of it being out of date when it delivers is very high. If it’s very expensive, the risk of it draining all investment from other projects is very high. If it’s focused on just catching-up with others in the market, it’s unlikely to be very useful, as competitors will have moved on by the time its achieved and the company will be behind again. If it’s all three, it will mean the business is stagnating.
Small dynamic pilot projects should be favoured, especially ones with quick feedback loops. These are essential to foster innovation. Localised or small-scale initial deployments to ensure customer input into decision-making early in the process are therefore ideal.
There also needs to be tolerance of failure, as the feedback from some projects will indicate that the market doesn’t want it. The cost of abandoning pilot projects is small budget, so it avoids the pressures to keep going that can come with big projects in which too much corporate effort has been committed.
Changing the culture around new business initiatives will increase the likelihood that new products and services are market-leading and impactful. Successful pilots can be rolled out more broadly and failures can be written off cheaply with lessons learned for the future.
Above all, they encourage staff to try things without the fear of being associated with failure, allowing the company to benefit from the expertise of its own employees, the ones who know the company and its market best.
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