With digital tools and solutions now more ubiquitous, one might expect firms to be making more transformational progress. However, data from our cross-industry study in July that gauged digital transformation progress and success, found no testament to measurable advancement since our 2012 report. In fact, this year's report shows organizations still struggling to turn their digital investments into commercial success―with the insurance industry particularly lagging. For the insurance sector, technology has enabled new business models, such as on-demand and usage-based products, to appeal to customers' desire for convenience, flexibility, and greater personalization. However, as a result, consumer expectations have spiked and are now putting even more pressure on insurers' digital prowess. Related: The state of insurance technology in 2018 A lesson learned here is that digital mastery cannot be a static goal or single destination. Instead, it is a journey in which firms must frequently and continuously assess benchmarks. In our study, we used a digital mastery framework for organizations to outline the two areas necessary for progress in a company's digital transformation: |
- Digital capabilities: The use of technology to change how a company interacts with its customers, operates internal processes or defines its business model.
- Leadership capabilities: The ability to create conditions required to drive transformation, including a transformation vision, a robust governance model, IT-Business relationships, culture and engagement, and workforce enablement.
Compared with our 2012 study results, we found that when it came to the first focus area ― digital capabilities ― organizations were making headway in customer experience but were not adequately supporting it with back-end operations. Operational alignment with customer demands is also critical to digital capabilities. In Capgemini's World Insurance Report 2018, more than 80% of insurers surveyed said that evolving customer preferences are driving their need for digital agility more than any other factor. Moreover, when various industries are mapped on the digital mastery matrix, which lays out the findings of a sector's confidence in both digital and leadership capabilities, the insurance industry emerges as a Beginner. Overall, our research suggests that implementation difficulties have dampened organizations enthusiasm for digital transformation since the 2012 report. Six years on, organizations are challenged to create an aligned organization and a robust governance model that supports their vision―while ensuring employees are engaged in the journey. Inadequate attention to the talent and culture dimension was also a significant weakness. Related: 9 ways insurers can drive more value from technology investments |
What makes a digital master?
To understand what firms can do to tackle these challenges, we examined organizations that have aced both digital and leadership dimensions and what they are doing differently from the laggards. While there may be no surefire success recipe, across the board these "digital masters" have... These characteristics show that a renewed focus on the key digital transformation success dimensions―operations and governance, and in particular, talent and culture ― will help organizations to breathe vitality into their transformational progress. Now more than ever, digital transformation is a survival must-have, especially for the insurance industry, which faces numerous technology-driven opportunities as well as the increasing prospect of insurance industry tech disruption. Seth Rachlin, Ph.D., is executive vice president of Insurance at Capgemini. He can be reached by sending email to [email protected].
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