In which Jill reminds us of the 5 first steps in the digital revolution.
Some companies are born digital, some achieve digital, and some have digital thrust upon them. Which one are you?
My new friend Greta wants her company to embrace digital, and has a deep understanding of its promise. But she’s afraid a digital team will soon be thrust upon her—by her boss, an impatient guy.
The company I work for, a property and casualty insurer, is very good at implementing databases and managing data. But [we’re no good] at infrastructure. No dang good. You’d be amazed if you knew our annual IT budget. Everything’s a silo. But we can’t connect anything.
Add to this the fact that we’re falling behind the digital curve. When it comes to analytics maturity, we’ve done a decent job, and for data management I’d give us a B+.
My boss has started to talk about how to become a digital business, but he’s all over the map. He’s obsessed with smart cars, and he’s recently started talking about putting together a “digital discovery team.” But for what? Meanwhile our main competitor’s policyholders are opting into its telematics program. We’re a long way from that. We need to stop talking and start doing something. Any advice?
— Greta J., Iowa
Greta, if I had a dime for every time someone said, “We need to stop talking and start doing something,” I’d have invested in telematics technology a long time ago, and would be soaking up the sun in Turks and Caicos instead of answering this question.
I don’t blame you for your frustration. Most P&C insurers can come up with at least a half a dozen digital use cases and are developing a handful of those. Let’s explore why your company might be taking its time.
When a company is slow on the digital uptake it’s usually due to a lack of understanding of the opportunity among decision makers. After all, why send a payment reminder to a policy holder’s smart phone when she’s perfectly happy putting a check in the mail?
On the other end of the spectrum, trends like smart cars and smart homes can distract leadership from pressing business opportunities that promise more immediate payback.
Executives like the idea of the digital enterprise, especially those who use the word “disruption” a lot. But many can’t articulate the benefits, or they conflate digital with process automation. Executives who believe “the trend is your friend” are at the same time overwhelmed by the prospect of digitizing business operations. They need to understand how to break down the concept of digital into tactics.
Here are the steps I’ve seen work:
Step 1: Find a business unit that “gets it.”
Many leaders in insurance dream big, envisioning smoke detector monitoring in smart homes, or drones transmitting damage images in real time. But there’s plenty of opportunity in the marketing department—the promise of digitized omnichannel outreach is boundless. Sending personalized product recommendations via SMS messaging to customers’ smart devices can result in not only incremental revenues but an uplift in customer retention.
Step 2: Determine what’s realistic.
You might see tremendous potential in bi-directional communication with sensors on smart cars, but might not be ready to ingest that data. Assess which business processes might be digitized in the short term, but at the same time promise significant payback. And when you’re ready to use telematics data to provide additional insights that can be used for customer outreach and underwriting, by all means, move forward!
Step 3: Scope the opportunity and determine its boundaries.
Drill down on specific deliverables and craft what I call a small, controlled project (SCP) that will become the basis of your initial digital effort. Scoping is everything when it comes to digital delivery, so this is the hard part.
Step 4: Do a gap analysis on what technologies, skills, and data are incumbent.
Determine what needs to be acquired to deliver the SCP successfully. Focus only on the SCP for now to avoid scope creep. Additional capabilities and skills will become clearer as new business cases emerge.
Step 5: Appoint a digital product manager to lead the effort.
The scope and reach of this role depend on the boundaries of the SCP. In an article on this trend, McKinsey states that “It is natural for product managers—who are closest to the data—to take on a broader role” in the digital effort. Maybe that product manager is you?
Now that you’ve done the due diligence and figured out the practical value proposition for digital based on a tactical initiative, present a go/no-go decision to your leadership. Introduce the SCP, explaining why it’s new, extensible, and represents an initial platform for subsequent digital efforts. Keep it simple, focusing on business value and the network effect of digital functionality. Avoid “landslide topics” (hint: robotics, deep learning) that might play out later but that can become diversions now.
In this way, you’re essentially showing what digital delivery looks like, bridging all that verbal visioning with a lightweight but rigorous action plan. More to the point, you’re putting executives in the position of saying “No” to becoming a digital business. If your management is truly serious about digital and the SCP is strategic, you’ll likely get a resounding “Yes.” Good luck!