Insurance firms face increased challenges to build and retain their customer base, keep up with regulatory change, and reduce cost. Business transformation has moved up the corporate agenda accordingly in a bid to optimise end-to-end processes, improve customer satisfaction, and meet regulatory expectation.
But business transformation is expensive and may take years to achieve. Firms can get far along with the process – even years in – before realising the proposed plan just doesn’t work.
To save time and money, a proof-of-concept project can help you figure out if your transformation plans are realistic and viable. This simple step allows you to choose a small number of processes to see if your transformation approach works in practice. If it does, great. You can start rolling out the changes across your organisation, building on lessons learned. If it doesn’t work, that’s okay, too. Better to find out now than proceed too far down that road and invest too much money.
Here we outline our three-step process for a proof-of-concept project in business transformation.
Selecting processes for business transformation
As with any project, it’s important to start with a clear idea of what good looks like and what your goals are. For business transformation this may target your finance function, HR, payroll, operations, onboarding or other areas. Over time, it may target all the above. Regardless of what area is under review the goals are generally the same: to reduce cost, boost revenue, create efficiency, and improve customer satisfaction.
When choosing your processes for review, you'll need to consider the complexities involved, any upstream or downstream dependencies across your business, and the number of steps involved. You can minimise the risk of any disruption to your services with thorough due diligence, including a review of the processes’ strategic importance, maturity, supporting documentation, and its impact on the firm’s wider IT infrastructure. Ideally you want to choose processes that are fairly simple, with few dependencies, but that are indicative of how your wider business operates.
Three steps in a proof-of-concept process
Once you’ve chosen your processes for the proof of concept, it’s a straightforward three-step course of action.
During this stage, you define the scope and create the project charter to keep everyone on track. Only a small team is needed and you can start with introductory sessions to understand the processes in scope. Mapping them will help you understand any unexpected complexities and figure out any interdependencies.
At this point, an 'as-is' analysis will help you figure out what’s working and what isn’t. Drawing on lean tools and principles, you can identify any wastages or non-value adding activities. A root-cause analysis will help you find out why there any bottlenecks or pain points.
Finally, decide what type of data you’ll use as key performance indicators to track project success.
Now you can think about the 'to-be' state – where you would like to be. Start by brainstorming ways to re-imagine your processes, drawing on industry best practice and lean optimisation levers. The end goal is to optimise, standardise, and automate as many steps in the process as possible.
You may benefit from right sourcing some steps or entire processes, through outsourcing or centralising the work to a specialist in-house team. Once this step is complete, you can evaluate your expected cost savings, and quantify the benefits.
Using lessons learned in the previous two steps, you can prioritise the rest of your business transformation work and put your roadmap into action. The roadmap may include quick wins, as well as medium and long-term benefits.
An indicative cost-benefit view will help you quantify your findings to obtain signoff and agree work for the wider implementation project. Creating a deliverable based around as-is, to-be and quantifiable benefits may be an accessible and simple format to state your case.
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A safe space to fail fast
If you’re considering a business transformation programme, a proof of concept will help you work out if your plans are feasible. The idea is to help you fail fast – to check your plans work in practice or to cut your losses if they don't. Investing some time and money early in your business transformation programme will help you embed meaningful, sustainable change that genuinely meets business needs.
To find out more about business transformation, or how a proof-of-concept project can help, contact Stuart Riddell.