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2021 and the digital manifesto in Insurance

After a year of facing a global pandemic, an economic downturn and the continuation of typical industry headwinds like new competitors, talent wars, and regulatory pressures, Insurers are more focused than ever on the need for digital transformation in the finance department.

But today’s business cases have evolved well beyond the 2 year – or even the 12 month – business cases of old. Today’s Insurance C-Suite wants to see incremental value delivered at regular intervals and measured in months, not years.

Bob Broz, Head of Finance Transformation at Transamerica observed this trend in a recent webinar  stating, “I don’t see a lot of appetite for the long business case. I don’t see people signing up for 12 or 18 month returns. The expectation is that you have something that you are driving in the short term where you can get to effectively self-fund it where you are delivering some degree of change, some degree of cost reduction, some degree of top line growth in that first 6 months.”

So how can Insurers create a project approach and business case that balances the need for holistic and strategic transformation with the desire to show value early and often in a project?  

Define ‘surgical’ use cases

Today, the vast majority of Insurance executives and employees have an appreciation for the breadth and value of opportunities and benefits a digital transformation can offer. But a transformation project that attempts to act as a panacea to issues faced by all areas of the business can backfire with blown budgets and business benefits that get lost in the project complexity and scope.

By identifying processes or areas of the architecture where you can get the biggest bang for your buck, you gain buy-in and momentum. Start small and agile and continue the transformation journey only when checkpoints have been met and the value gained from each project is achieved, documented and socialized.

Establish a benefit delivery workstream.

A benefit delivery workstream on a finance transformation project can play a vital role. Building this into a program can hold the wider project team accountable for ensuring targeted outcomes happen and track the impact of efficiencies on the organization at large to ensure cost saving targets are met.

This workstream should have enterprise-wide buy in and visibility to ensure the savings happen and the program is working toward managed outcomes, not just a long-term strategic vision. A Senior Executive must sign off and take ownership of the business case and underlying assumptions at the start or it won’t be executed.

Strike the right balance between central and functional members of the project team.

There are many roles to be played in the execution of a finance transformation and the makeup of a team will depend on several things, including size of the company. Central change teams can bring data and technology expertise as well as program management skills but it’s critical for a large segment of the team to know the content and have the industry and functional knowledge to deliver effectively. Using the central change teams to help bring together multiple functional groups, and manage spend and capacity can be helpful, but program managers should not make up the majority of the team.

 

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This post is from a series of posts in the group:

Financial Transformation

The pace of evolution for many corporate finance and accounting functions is accelerating. The mandate of the CFO is expanding and the challenges they face accumulating. This blog is an exploration of these topics.


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