In previous posts we have talked about the belief that Covid was an accelerator of change and we like to think of Covid, not just the accelerator, but also the catalyst for change that the insurance world so desperately needed. The insurance industry has known that change was necessary and was working slowly towards those changes, but Covid was the catalyst and accelerator that forced the industry to say, “NOW is the time.”
What’s next? Executives and technology and innovation lab teams are now asking a myriad of questions: Buy or build? Who is the right partner? Is there a try before you buy option?
We have tapped into some of our favorite industry experts to get their thoughts and perspectives – Lori Pon, and Awais Farooq.
Buy vs. Build
Insurance carriers of all sizes and all lines of business are navigating a sea of challenges brought on by global events, supply chain shortages, the war for talent and customer expectations for frictionless service. The insurance industry is accelerating innovation efforts at a faster rate than ever before. There is a push of expertise from vendors and executive pressure to effectively leverage technology to optimize business results and deliver, flawlessly, at the critical moments of truth across the insurance lifecycle. Technology companies across the ecosystem are now focusing on insurance vertical to help modernize and improve customer experience (Cx). It’s challenging, however, to keep up with the pace of change and identify sound investments that will supercharge your Cx.
Small and large insurance companies are creating meaningful infrastructure to focus efforts on innovating and modernizing the customer experience through solutions that deliver empathy at scale, efficiency and productivity. Whether it is chat bots, robotics process automation, fraud detection, or core systems, companies are experiencing obstacles in speed to market in delivering these advancements due to technical expertise, vendors not understanding and translating tech to address the true pain points for specific business units and receptivity of staff in adopting new ways of working.
Insurance companies must truly understand core competencies in the tech arena and smart partner with vendors across the InsurTech, FinTech and traditional technology ecosystem to remain agile in differentiating their brand and delivering flawlessly at key moments of truth. Knowing what you’re good at and what you need to “go to market” to buy is a fine balance and one that takes discipline. The effort and resources to build a solution may be better directed to process redesign or collaborating with the right solution partner to deliver best in class technology.
Making the Case
A key step in modernizing your processes is gaining sponsorship from the C-suite commitment early on. Socializing the idea in succinct summary that outlines alignment to corporate strategy, key benefits, impact on key performance indicators and costs is vital to moving innovation ideas from aspirations to reality. The business must be informed on the recommended solution(s) and be involved in the pitch to th executive team to secure funding. It is tempting to rely on the corporate procurement and sourcing to conduct this research using high level industry data. Business must have a voice in discovery and curating the list of perspective partners.
The Root Cause Analysis
Identifying the problem is the first step towards deciding on the solution that is best suited to address the issues at hand. Once identification is complete, it is important to remain grounded with the purpose and intent of the solution. It is tempting to solve the ‘problem’ before identifying the root cause. However, having a specific goal in mind and working backwards from the customer is imperative to ensure you are addressing pain points and re-imagining Cx from a customer centric point of view. They will be your internal champions, and,ultimately, they have to adopt whatever solution is produced to ensure utilization and optimization, so it’s better to get them on the journey sooner.
Identifying and Selecting the Right Partner
Identifying perspective vendors, selecting the right technology partner, and collaborating all require significant amounts of time, research, and effort to determine the best approach. A strong understanding of the industry and technology is imperative to identifying the best partner and solution. Investing time and exhibiting due diligence at this stage will reap dividends in the future as the relationship and product evolves. Key focus must be placed on the vendor’s industry expertise and future product roadmap to ensure domain knowledge and strategic alignment
While a particular solution may be flashy and attractive, it can have hidden pain points which do not only harm the implementation process, but rather can deplete resource time that could’ve been utilized in a more productive manner. Having an equal score card for different approaches to solve the same problem is crucial for the success of the project.
We highly recommend you go through a formal request for proposal (RFP) process. Although time consuming you can really cut through a lot of the noise quickly and efficiently.
Try Before You Buy
Understanding if a new technology solution will deliver on the intended business objectives is critically important before making a significant investment. Much like a chef frequently tastes a new entrée prior to serving, it makes sense for businesses to test new solutions in a controlled setting, when possible, and with key use cases to ensure fit and validate impact to KPIs.
Proof of value (POV) initiatives are a great tool to understand the effectiveness and impact of a solution, as well as how the vendor, impacted business unit, and the technical team will need to collaborate to implement the solution to a wider audience. A well planned POV will allow the business to assess the fit and effectiveness of a perspective partner and the solution as well as provide the foundation for gaining executive support and funding for innovation initiatives. Businesses will also gain invaluable insights into organizational change management activities to maximize user adoption and overall success.
Even before the POV, you can conduct a proof of concept (POC), especially within the RFP process. This is a way to check that the partners truly have the knowledge and expertise that you need, not just for vision and strategy, but also execution.
Reasons Why You Should Build
– Low cost of maintenance
– Subject matter expertise; core competency of business
– Rapid modifications to meet the specific business demands
– Security control remains in-house
Reasons Why You Should Buy
– Lower initial start-up cost
– Agility of solution providers
– Expert/domain knowledge of emergency technology
– No additional work needed to maintain and enhance the product
– Benefits of leveraging gained industry knowledge from other companies
In conclusion, effective implementation of the right technology, at the right time in the right area can yield significant results. However, it is critical that you are informed and exercise due diligence to research potential solutions to help aid the decision-making process and identify the right partner. Etymology Consulting is adding this tool belt for companies that want to make big changes fast. We can provide the expert consult to make sound decisions on the right approach to maximize the success of your strategic initiatives. Click here to schedule your introduction call today.