The dilemma discussed by Douglas Duncan CIO of Columbia Insurance arises when a CTO/CIO is hired or directed to digitally transform the organisation. A killer strategy without trauma or taking resources away from keeping the core systems running. Duncan says this approach is doomed to failure. 

He gives two key reasons.

One: digital transformation is going to be disruptive or it is not transformation. Therefore the whole business has got to plan for that to have any change of not descending into turmoil. 

Two: Digital disruption is a not a technology strategy; it is a Business Strategy that tightly integrates technology.

Duncan points to three critical success questions to answer to avoid the dilemma.

  1. Does the digital transformation strategy align with the vision and strategy of the organisation?
  2. Is digital transformation synergistic with the current operating model or disruptive? 
  3. Is the organisation's leadership aligned to drive the disruptive change?

Question one assumes there is clear vision and strategy. But that needs more than a mission statement and fashionable slogans like 'embrace AI and automation to deliver better customer journeys and user experience'.

Evidence of a clear vision for auto insurers suggests a clear plan to deal with the change from ownership to rental, the long-term evolution of autonomous vehicles and changing driver behaviour resulting from the emergence of work-from-home and less travel. 

Disruptive? Putting lipstick on the pig is the classic approach to introduce automation of predictable and repetitive processes. eFNOL is a good example to allow the customer to click on a button, and from her phone briefly describe the event, add photos, video and supporting evidence and within minutes have the claim well on the way to being settled.  A&D claims actually settled in fact. 

But that is not a killer differentiation; any insurer can do that today. Some do it for one major claim category but rarely for all which makes multi-policy strategies fail at the first claim. 

The focus on prevention rather than cure, usage-based insurance (UBI) automated FNOL and triage and the leverage of massive real-time data like Tesla can achieve all provide the means for real disruptive change. A new operating model in fact. 

Aligned leadership is interesting! Insurers are traditionally structured in departmental silos. Fraud professionals guarding years of experience and gnarled powers of investigation are not keen to turn over their hard won knowledge to data scientists and algorithms. But that is vital as is embedding their evolving knowledge into the watchlists and algorithms. In fact that is vital as fraudsters can use the very same technology to seek out the vulnerabilities in onboarding processes for new policy holders or claims journeys. The more you digitalise, the more likely will technology-enabled professional fraud gangs outwit you.  

Leadership must be aligned to counter that threat.

Duncan believes that success comes from a better understanding of the relationship between business strategy and the way it can leverage technology. Careful planning to deploy technology to engage with people- customers, internal teams, supply chain partners and distribution channel members. Collaboration, orchestration, decision execution and measurement of customer satisfaction.

What added business value is actually delivered to all participants? 

This requires a strong CTO/CIO  part of an aligned team with engaged business leadership and an urge to CHANGE. 

It greatly helps if the technology is an enabler of these critical success factors. However disruptive and gane changing the end result the CTO/CIO must be able to prove from small first steps and teams, iterate test and constantly improve, prove the KPI metrics and scale up fast.  Not be afraid of failure whilst being able to overcome and correct misalignment by applying learnt lessons fast.

The advent of no-code platforms is an enabler for this. Unqork, 360SiteView and Instanda are examples of such technologies. They help the CTO/CIO keep the leadership up & down and across the organisation in step for successful disruption without too much turmoil.