Chris Wiborg recently attended a summit of chief information officers and found himself listening in as several attendees discussed their company’s metrics for digital transformation success.
One executive pointed to adoption rates. Another talked about the speed of bringing new technologies on line. Then a third corporate CIO took the wind out of the room with an idea that was poignant in its simplicity: “How do I measure digital transformation success? Survival!”
Wiborg recalls how strongly that comment resonated with the CIOs present for the discussion, along with those he talks with regularly as vice president of product marketing for the international software development company Alfresco®, which parks its U.S. headquarters in San Mateo, Calif.
"Feeling the pain," Wiborg says, is an essential first step on the road to innovative digital transformation in insurance and other traditional businesses.
"I spend my time talking to companies that feel the competitive disruptive challenge," he says. "You’ve got to take advantage of that (uneasiness) — or become roadkill."
During the first quarter of 2017, Alfresco teamed up with Forbes Insights to produce a study that pinpoints the common characteristics of companies that have become digital transformation trailblazers. Researchers interviewed 328 senior-level IT executives, representing a range of industries, to produce “The Great Rethink: How Digital Leaders Are Building Tomorrow’s Organizations.”
In broad strokes, digital leaders are companies with the following philosophies around information technology:
- They value design thinking, which means they are relentless about optimizing the customer experience.
- They establish open thinking, which means they foster innovation from both inside and outside the organization.
- And, they promote platform thinking, which means they can take their core competencies and monetize them in the digital economy to create new revenue streams.
Read on as Wiborg illuminates five actionable business priorities that, when executed well, enable a company to become a digital leader in its industry.
The Alfresco white paper says that while some insurers will succeed at adapting to disruptive threats, moving quickly into new markets, attracting the best talent and maintaining highly regarded brands, others struggle. (Photo: iStock)
No. 5: Shift tech development to a customer-first philosophy.
Digital transformation, Wiborg says, is about more than taking paper processes and moving them online. It starts with mapping the customer journey, looking for friction points, and developing systems that smooth out those friction points at every step along the distribution line.
He characterizes the challenges for insurers in particular with the following anecdote:
"Let’s say I’m in an auto accident. I’m going to pull out my mobile phone, take snapshots of the accident, and maybe record a video of what happened. I also want to be able to submit a claim before I go to my next meeting… How many insurance companies, five years ago, allowed you to do that? I would say zero."
The Alfresco research found that the companies that are considered digital transformation leaders in their industries adopt a strategy of customer- and user-first thinking:
- 85% currently have dedicated user experience teams, and
- 60% plan to increase resources in customer experience over the next three years.
"In IT, you have to flip around your way of thinking and think from the outside in," Wibord says. CIOs and their IT teams should be asking themselves: "What does the customer really want to do, and what do they really need? Versus what am I going to give them, or how am I going to train them to use my system?"
Insurance businesses that are not yet thinking about how they will innovate with new approaches to leveraging technology will find themselves fighting to survive. (Photo: iStock)
No. 4: Look beyond automation and digitized business processes.
Shifting toward 'customer-centricity' will immediately present new challenges as well as solutions for IT professionals, Wiborg says.
Going back to the car accident example: A tech-savvy auto insurance customer who wants to file a claim after an accident no longer simply makes a phone call and then waits for a response.
"Now, that customer is going to be submitting images, voice recordings, video, and of course documentation as well… Can (their insurer) handle transactions with large files? Also, if I file a claim, I want to hear back about it quickly."
In order to develop these types of digitized processes, Alfresco’s research found that industry leaders have committed to “an open approach to the flow of ideas and concepts in their organizations”:
- 85% say a commitment to open standards is important/very important.
- 90% report the use of open source technologies as important/very important.
- 85% describe open data as important/very important.
Digital leaders start at the core by building platforms that are easily integrated with other systems and digital tools. (Photo: iStock)
No. 3: Move legacy systems and core platforms toward an open-source model.
When digital business leaders employ "design thinking" and "open thinking," Wiborg says, it becomes more feasible to integrate their core processes and legacy systems into innovation strategies. Why? Because IT professionals can take a building-block approach to launching new services.
"Instead of building a monolithic solution," Wiborg says, "a building block approach allows companies to get their core interfaces right. Then they can take a document management system built initially for claims processing, and use that same system for underwriting and risk evaluations."
Open-source software and technologies also make it easier for businesses to forge strategic partnerships that enable them to use outside tools to maximize their core competencies. What’s more, this approach will allow companies that are involved in digital transformation to quickly conceive new tech-driven solutions time and again.
According to Alfresco, "enterprises that are swiftly moving forward on a digital transformation journey are seeing a range of benefits, including higher-than-average corporate earnings." (Photo: iStock)
No. 2: Build partnerships that capitalize on the Internet of Things.
Alfresco says that digital leaders re-imagine a business model that supports a shared economy and leads the way in platform thinking.
Wiborg points to Arity, a subsidiary of Allstate, as an example of an incumbent insurer wading into the digital economy with a product that’s rooted in what the incumbent was already doing well.
Arity is a tech startup that sells big data around driver safety and behavior to other companies.
Allstate announced in 2016 that it planned to spin off this business born from its internal driver data collection and analytics. Arity sells its software tools to other insurers, car manufacturers and transportation companies.
"When I really think of the core value, it’s really the data science," Arity president Gary Hallgren told Fortune. "We’ve been able to take a large quantity of data and turn it into something predictable."
A shift in thinking and priorities on the road to digital transformation will increase agility in adapting to changing market conditions and grow customer loyalty, Alfresco says. (Photo: iStock)
No. 1: Monetize core competencies for the digital commerce.
It was never a foregone conclusion that an insurance industry incumbant such as Allstate would become a digital leader, says Alfresco's Chris Wiborg.
But initiatives such as Arity will help that company insulate itself against startup digital disruptors that seize upon service opportunities within the insurance market.
What does that mean for other IT professionals in the insurance industry? Wiborg says they should be asking themselves: "What are the opportunities around the core competencies that I already have, and how can we expose them as a component that someone else might link to a solution."
According to the Alfresco/Forbes research, fewer than 13% of companies today provision their systems for customers and suppliers to connect to them. But most are now developing plans to monetize these “core competencies."
That’s smart, because this is where real revenue opportunity exists in the digital economy as only a fraction of companies today consume information from other customers, partners or suppliers.
"Platform thinking is about new business models," Alfresco founder and CTO John Newton said in a press release about the new study. "Just think about how Uber embeds itself into Google Maps so that when you pull up some directions, it tells you that there is an Uber three minutes away and that it can get you to your destination in ten minutes. That’s real platform thinking — the ability to extend your reach far and wide to attract more people to your platform."