Archives for March 2011
5.19.11: Celent Insurance in France: The CIO Perspective and Adoption of Social Media by French Insurers in Paris, France
- Old people want to leave their apartments to their children after death.
- There is no legacy tax in China.
- The possibility of apartment prices going down is the main factor that worries financial institutions.
- Banks do not have sufficient data for life expectancy.
- Regulations are not complete: China land usage is limited to 70 years. If it is not renewed or does not get approval, then theoretically the land reverts to the state.
The identification, communication and management of business requirements is a critical skill set in any company pursuing significant change. In order to determine the state of the business analysis function in the financial services industry, Celent teamed with the International Institute of Business Analysis (IIBA) to survey banks and insurance firms and take a snapshot of current performance in key business analysis skill areas. The survey was designed to hold a mirror up to the industry and reflect its perception of its performance. These are reviewed in a recently published report – Business Analysis Competencies: Mirror, Mirror: A Self-assessment by Banks and Insurers.
The data confirms what many people say in discussion on this topic – that skill development in business analysis is often insufficient to maintain sustained performance at sufficient levels. Very few companies rate their performance in any business analysis area as a strength. The highest rating was for the elicitation skill in banks and this level was assigned by only 21% of the banking participants. The study also collected opinions on which BA competencies are most critical to successful implementations. The good news for insurers is that both Life/annuities/health and P&C insurers report a close match between their highest ranked importance areas (elicitation and requirements analysis, respectively) and their performance. That is, delivery in these areas is ranked at or above average, indicating that investments that have been made are beginning to pay off and deliver benefits.
Many financial services companies are updating automation systems and continuing to improve business processes. For organizations that are modernizing their platforms, an expected benefit is to reduce the dependency on IT and move maintenance and some development into business analyst areas. Many software vendors are producing products which are designed to be configured, not programmed. This is intended to increase flexibility and speed in system development and maintenance. Neither group will realize its goals without solid business analysis skills. The Celent/IIBA survey identifies the specific gaps in business analysis skills in banks and insurance companies. Celent encourages financial services firms to use the results of this survey to examine their current approach to business analysis, place their bets on which areas are most important, and invest in skill improvement.
In the frame of our first report about the French insurance market published in the beginning of 2008, we warned that the French government deficit and debt levels could represent a threat for the country’s economy. This was well before the financial crisis hit the European continent and its impacts on public spending. Now the problem has worsened, and even though France is still not directly fingered – as is the case for Portugal, Spain, and Italy following the Greek and Irish governments’ debt crises – the situation remains alarming.
We recently asked French insurers CIOs to tell us their feeling about their industry’s near future and more importantly whether they felt some macro-economic factors were impacting their business and growth prospect in the mid to long-term. Some of them mentioned that the French government was in serious need for more financial resources and would try sooner or later to tap savings accumulated by the French population.
It is well known in France that the government is currently analyzing different alternatives to change the current tax system. It’s been publicly announced last week that the tax shield (law stipulating that no taxpayer pays more than half their income in taxes) implemented by Nicolas Sarkozy after his election as president will be abolished. Taking into consideration the current public debt of the country a reform of the tax system is a priority that everybody should understand. Among the different alternatives currently evaluated by the government, there is the willingness to increase taxes wealth accumulated through life insurance products and retirement savings.Our CIOs were right and the decision to tap savings accumulated by French citizens is going to impact the French life insurance industry in the coming years…
As part of research effort into building business analysis skills, I was talking with a manager of a business analyst department in a major U.S. bank this week. He described their approach to improving requirements collection. It struck me as an effective and practical method that I want to pass along.
Many of the models for building business analysis skills are top-down initiatives, planned and executed as part of a wider improvement program. These are often driven from a learning and development department or a special training area within the IT organization (see the Celent Report Building a Better Business Analyst – Transforming the Enterprise). This bank’s approach was more “bottom-up” and grew out of a focus on their software testing process. They improved the rigor of their business requirements documentation through automating their test scripting, planning and test case development process. As part of their revised methodology, it is now necessary for business analysts to gather requirements in a structured manner that can be automatically uploaded into their test automation software. These then generate test scripts, plans and cases. This yields increased consistency, control and structure to what previously was a very ad hoc process.
This practical development approach is valuable in that it delivers skill and process enhancements as part of the day-to-day activities of software development. For those looking for a different strategy for improving requirements gathering, getting there through automated testing may help. For those that have also taken this same approach, I would be interested in knowing what the results have been.