Insurance technology is increasingly at the forefront of growth. As companies grow, they diversify. They might go through several rounds of mergers and acquisitions. Typically, these changes mean that a growing company’s technology infrastructure becomes more complex and increasingly difficult to manage. Sooner or later, a consolidation of the company’s IT systems becomes essential for efficiency, improved customer service, and cost-effective management.
However, the perception from the top is invariably that IT system consolidation is too risky, too complex to address, and would certainly prove too expensive to implement.
Surely, given the huge advances in technology that we have seen over recent years, “too risky, too complex, too expensive” should no longer hold true today?
Mitigating the risks
If the consolidation of an organisation’s IT systems is perceived as too risky, what are the risks and how can you reduce them?
Risk actually cuts both ways: there are the obvious risks always associated with any action or change, but there is also risk associated with taking no action. The corporate world is littered with examples of huge brands that disappeared because of inaction. Their owners failed to keep up with changing customer requirements and expectations.
Keeping up with shifting trends using a multitude of disparate and outdated systems is simply not possible – taking no action to consolidate these systems means, eventually, that you cannot keep up. The result is loss of market share to competitors who are more agile; competitors who have embraced leading edge technology that can meet fast-moving requirements and expectations; competitors who are able to keep up while those around them fall behind. Standing still and taking no action seems, increasingly, to be the riskier option.
On the other hand, the risks associated with change and taking action can be mitigated with modern technology and by adopting the right approach. For example, today’s modular solutions mean that large projects become easier to monitor and control. Change can be phased to meet the business imperatives. Choosing software with the right flexible architecture allows single modules to deliver across multiple functions. Modularity is the ideal approach for the development and maintenance of complex requirements.
The quest for sustainable competitive advantage can and should begin with the streamlining of the technology platform. And, to reduce the risks involved in the change, an organisation looking to streamline their platform in this way needs to adopt an approach along the following lines:
Get agreement from the top
Strategic change only succeeds with the backing and vision of the leadership team.
Align the technology to the business vision
IT consolidation is essential for growth. It enables diversification and change. It enables new acquisitions to be integrated into the main business much more quickly.
Be prepared to take tough decisions
Efficiencies often involve closures or reductions. A technology transformation must involve key participants from every part of the business, converting them to project supporters negates possible resistance and avoidable infighting.
So, should you be considering new insurance technology? Do you need to streamline your platform? In order to answer these questions, you need to examine your current ability, or inability, to keep up with rapidly changing customer expectations.
Four imperatives for insurance technology change
There are several areas that you need to look at, but they all boil down to four key imperatives for technology change:
- You need to be able to expand or flex your product portfolio and risk approach quickly
- You need the ability to perform quick prototyping and concept testing
- You need to be able to offer ease of interaction across all customer touchpoints
- Most importantly, you need a single customer view – you need to understand how every customer has transacted with your organisation, irrespective of product or channel
A lack in any one of these areas flags up a possible need for change. But only when you can satisfy all four can you say that you have fully reaped the rewards offered by today’s insurance technology. Only then will your business have the flexibility and understanding to develop a true customer-centric strategy.
Streamlining and consolidating disparate insurance technology to deliver a solution based around the customer brings many benefits. These include improved customer service levels, better customer retention, higher conversion rates and, ultimately, an improved overall customer lifetime value. There is a lot to be said for simplifying the complex.