Business Readiness to Go Digital - Why it Fails & What to do about it

It's difficult for businesses to figure out which trading platforms to engage with. Digital transformation programmes often fail - especially those involving combinations of products. 

So, what are some of the key roadblocks businesses encounter on their digital journeys, and how can you safeguard against them?

Unclear strategy and vision

Product implementations are unsuccessful when organisations don't have a clear idea of what they are solving for, how to quantify their desired Return on Digital Investment (RODI), or how to sequence the work within pre-existing systems. 

Get clear on the problems you are trying to solve. You may want to digitally trade, but this has a multitude of meanings in today's market. Is it consistent, structured data exchange you want to get to? Efficiency realisations in your trades? Better risk clarity on individual risks on a portfolio basis? Once you land on specific goals, you can then focus on the implementation of products or solutions that speak to the benefits you're trying to realise. 

Big change means longer timelines, especially when it comes to digital trading. Don't try to oversell for internal buy-in; it can be tempting to promise near-term ROI. However, if you don't manage expectations, you run the risk of spending half of your time managing why the benefits have not been realised quickly enough, rather than focusing on proper implementation of the product(s). Realistically, you may well lose out in the first couple of years and begin to see growth in year 3 or 4. 

Understand the wider technology landscape you're dealing with. These tools are pretty complex, and ultimately they'll fit within a whole host of other systems. Be mindful as you implement the tool of what data strategy you already have in play, what the integrations will be and whether they are worthwhile. Maybe you're integrating into a PAS that's set to expire in 12 months; that could benefit from being a light touch integration. Don't create unnecessary technical debt. 

Largescale inflexible change programmes

A programme that is implemented with little room to make mistakes, pivot and change direction when it starts going off the rails is destined to fail. 

Sometimes a huge waterfall project is unavoidable; however, be open to a combination of these and more agile approaches to delivery - try often, fail fast. Give yourself some flexibility wherever possible and make sure you have a control stop in place to reassess when things aren't going to plan, before it's too late. Testing and proof of concept can be utilised before the building out of a massive waterfall project and implementation.

Technology that doesn't work, or is stretched beyond capacity

Issues often occur when users attempt to stretch systems beyond their intended functionality. In rare cases, the tech simply can't do what was advertised or the vendor is unable to deliver.

You might be a broker who looks at a product and re-imagines the desired functionality. Be careful. I like to use a ridiculous analogy: you wouldn't take a scuba tank on the moon. Find out exactly what it is you're trying to solve, and then work with your vendors on the best combination of products to achieve your goals. 

We also like to assume that tech vendors are akin to vaccine providers, who have gone through adequate testing to ensure that the product does what it says on the tin. However, you need to be mindful of who you're engaging with and what their track record looks like. 

Poor implementation and programme governance

Staffing appropriately, with ongoing project management in place, is key to the continued success of an implementation and wider digital programme. This one speaks for itself.

People and adoption issues

Culture, culture, culture!

Transformation programmes fail when there is a lack of business engagement, accountability and commitment from leadership to the strategy. There may even be some subtle saboteurs within your organisation... These will be resistive and comfortable in their ingrained ways of working. This is critical to tackle from the outset.

It's not enough for leadership to decide on a strategy, cover the costs and step away. The underwriters and actuaries will be the ones in the weeds, implementing and maintaining the programme, so they need adequate motivation and support throughout.

This may involve figuring out an incentivisation scheme, whether monetary or career track focused. Your direction should be non-negotiable but never threatening - rather, helping employees to embrace a shared opportunity within a culture of testing and learning.

 

About Reid

Reid Stanway joins Verisk Specialty Business Solutions from Marsh, where he most recently held the position of Global Digital Placement Leader. At Marsh, Reid worked with the global leadership team to define, lead and execute the business' digital trading strategy. In his new role at Verisk, Reid works with insurance market participants to navigate the increasingly complex world of digital transformation and digital trading.