Digital Transformation: Are You Sure You’re Ready?

Are You Ready for Digital Transformation?

Motivations behind digital transformation initiatives usually involve improving speed, cost, or quality of products or services. Migrating to the cloud, increasing mobility, implementing robotic process automation (RPA), deploying intelligent automation solutions, or capitalizing on data from the internet of things (IoT) all have the power to profoundly impact an insurance company’s competitive standing – if not their very survival.

With 67% of insurers considering implementing digital transformation initiatives over the next twelve to eighteen months[1], companies not considering these changes will soon be left behind.

However, undertaking an initiative too hastily may overlook critical organizational considerations likely to inflate project costs and jeopardize the success of the program.

Throughout hundreds of insurance technology consulting engagements, we have identified five phases comprising successful preparation for every tech project: Initiate, Design, Experiment, Prioritize, and Plan. Each is a valuable component of the process which, if executed carefully and correctly, has the potential to double the chances of success of your IT project.

In this article, we’ll cover an often-overlooked – but vitally important – aspect of the Initiate phase: determining your readiness to even begin.

The Picture Is Bigger Than You Think

Because every company’s systems are so deeply intertwined, each affects more aspects of the business than may be initially apparent. Even if equipped with good intentions, simply jumping into major structural or process changes can create serious roadblocks for other departments or processes down the line.

In our decades providing insurance technology consulting services, we have seen dozens of costly – and avoidable – challenges arise when companies implement new initiatives without adequately ascertaining the impact of their project on the whole of the organization. It’s not uncommon for organizations to discover their planned initiative reflects only a superficial portion or “end of the line” aspect of the required change, when they should plan for complementary tech upgrades or cultural impacts in other departments as well.

By “preparing to prepare,” you determine your organizational readiness to undertake any transformation – digital or otherwise. And, taking a holistic view reveals the true scope of the initiative, one that may extend well beyond initial expectations.

Conduct a Readiness Assessment

We believe so strongly in the value of determining whether organizational readiness supports – or inhibits – a project’s ultimate success that we have designed a comprehensive organizational Readiness Assessment.

Conducted during a sixty- to ninety-minute web meeting, the assessment reviews key questions about your organization to determine its level of readiness in six areas of your business: Personnel, Processes, Technology, Metrics, Governance, and Environment.

The assessment drills down into a range of relevant factors:

  • Personnel availability
  • Team skills
  • Individual and team empowerment
  • Staff commitment
  • Impact of program on processes
  • Process indoctrination
  • Benefits realization
  • Technology infrastructure
  • Software considerations
  • Interfaces
  • Metrics definitions
  • Visibility into KPIs
  • Response to met or unmet KPIs
  • Extent of existing program planning
  • Program organization
  • Program procurement
  • Program implementation & deployment
  • Program support, monitoring & evaluation
  • Physical location
  • Company culture
  • Team morale
  • Other business-specific considerations

Readiness Assessment for Insurance Technology

A page out of Perr&Knight’s Digital Transformation Readiness Workbook

Answers to straightforward questions on these subjects reveal a clear picture of your organization’s strengths and weaknesses in areas with the potential to impact the result of your transformation initiative. This valuable contextual view enables your team to further develop your strategy before beginning project planning, in order to avoid playing costly catch-up later.

The results of this exercise create the foundation for the remaining four steps of preparation for your project. In addition to determining your level of readiness overall, this assessment provides a useful starting point to prioritize areas for work before and during your digital transformation initiative.

Readiness Assessment Results by Perr&Knight

The results area of Perr&Knight’s Digital Transformation Readiness Workbook

Preparation Is Important – But So Is a Tolerance for Risk

Successfully executing any major change requires commitment, tenacity, and a risk tolerance from leadership and the organization as a whole. To promote innovation, there must be support for experimentation and a willingness to endure the challenges of repeatedly failing, learning, and failing again before success finally takes root. The values that represent your organizational culture are crucial – if individuals are punished for failure, they will cease to experiment, and innovation will become a distant hope rather than a realized goal.

Gaining a thorough understanding of the benefits of a successful endeavor balanced against the pitfalls that lie ahead – even before approaching the starting line – gives you a much stronger chance of completing a successful digital transformation initiative and truly remake the way you do business.

To support the insurance industry’s unprecedented embrace of digital transformation, the workshop is being offered by Perr&Knight on a complimentary basis to organizations contemplating any type of transformation project. The accompanying readiness workbook and resulting assessment will be provided at the workshop’s conclusion.

Interested? Contact Perr&Knight today and carve out just ninety minutes to significantly increase the likelihood of a successful digital transformation initiative – ready or not.

[1] SOURCE: 2020 Financial Services Digital Transformation Survey, BDO