Would you spot the warning signs of a failing project?

Would you spot the warning signs of a failing project?

Every large project I have been involved with began with enthusiasm and high hopes. The go decision concludes a sizable project of its own — creating and receiving approval for the business case. The initiative begins in a celebratory fashion. The project sponsors are overrun with volunteers for the project. There are numerous kick-off meetings with a festive tone. Communication about the project occurs often promoting the merits of the project. It is sunshine and roses ahead!

Flash forward, the project communication may have slowed down to a trickle. The project team members have lost their enthusiasm, and the project has become mundane. Many times there have been as many failures as successes. It is not unusual to lose a key sponsor. At times, it may become necessary to revise the goals of the project, or, in the direst situations, abandon the future phases.

I am sure that readers are thinking, “This will not happen to my project.” I certainly hope that is true! But, if your project is on a downhill slide, there are steps that can be taken to get back on course. An important first step is a project health check.

A project health check is designed to provide an independent and impartial evaluation of a program or project. The health check evaluates the overall health or risk profile, assesses stakeholder satisfaction, and provides practical recommendations that the team can use for reducing risk and in extreme situations, for project audit, recovery, or rescue. The health check covers all levels of the project from the business executives and sponsors to the technical team members to provide a comprehensive view. It focuses on:

• Business objectives, scope, and requirements assessment.
• Contracting and financials.
• All processes, deliverables, and communications quality.
• Exception management that includes issues, changes, and risks.
• Project data and plan assessment.
• People assessment.
• Best practices effectiveness.
• Evaluation of the technology and its feasibility and compatibility with the current and/or planned environment.

Very often, those closest to a project are the ones that have difficulty in seeing the progress. Health checks are best undertaken by third party assessors, who can provide an unbiased and balanced view and opinion.

My new report,  Staying on Track when the Transformation Road Changes, has more information on project health checks as well as the do’s and don’ts of running a successful project. I hope all of your projects are success ones!

Announcing the winners of the 5th Asia Insurance Technology Awards

Announcing the winners of the 5th Asia Insurance Technology Awards
Celent and Asia Insurance Review hosted the 5th Asia Insurance Technology Awards (AITAs) at AIR’s CIO Technology Summit at Le Meridien Hotel Jakarta on 1 September 2015. The AITAs recognize excellence and innovation in the use of technology within the insurance industry. This year we received over 30 nominations from Australia, Hong Kong, Taiwan, India, Sri Lanka, Indonesia, and Pakistan; as well as the Asia Pacific divisions of global insurers. There were many impressive submissions, from which our international panel of Celent insurance analysts selected the very best to receive the six awards. The Innovation Award recognizes innovation in business models or in the use of technology. The winner was MetLife Asia. MetLife Asia implemented Advanced Data Analytics to transform big data into customer insights and to deliver a more personalized customer experience – delivering the right products and services, for the right people, at the right time. They are using these insights to inform product and services development, and to deliver sales leads to agents. The company won the award because of the innovative usage of data analytics. The IT Leadership Award honors an individual who has displayed clear vision and leadership in the delivery of technology to the business. The recipient will have been responsible for deriving genuine value from technology and has demonstrated this trait with a specific project or through ongoing leadership. The winner was Girish Nayak, Chief – Customer Service, Operations and Technology at ICICI Lombard General Insurance. ICICI Lombard implemented a business assurance project to address the ever present gap between real business uptime on the ground vs technology uptime. The firm implemented an in-house customer experience center; and deployed an infrastructure as a service model in Microsoft Azure Cloud. These initiatives generate genuine value for the business. The Digital Transformation Award honors an insurer who has made the most progress in implementing digitization initiatives. BOCG Life was the winner. BOCG Life implemented the Electronic Commerce System to provide online needs analysis and policy services. Through a transparent, direct and needs-oriented process, it facilitates prospective customers applying for multiple products they need in one go, and allows customer to adjust the offer according to their budget. The company won the award because of the way it is building trust and developing long-term relationships with customers through digital transformation. The Best Newcomer Award recognizes the best new player in the insurance technology field. The winner was CAMS Insurance Repository Services. CAMS Insurance Repository Services launched the Insurance Repository to provide e- Insurance Accounts to maintain policies as e-policies. This brings new efficiencies and benefits across the stakeholders, including Policy Holders, Insurers, Agents and the Regulator. The company won the award because they demonstrated real, unique value to the ecosystem. The award for Best Insurer: Technology honors the insurer who has made the most progress in embracing technology across the organization. The winner was RAC Insurance. RAC Insurance implemented a series of projects to digitize the business between suppliers, members and RAC Insurance. These projects include Claims Allocation, Motor Repairer Integration, and a B2C platform. The company won the award because of the way technology transformed the organization’s capability by offering an exceptional, one-touch experience for their members through online channels. Finally, the New Business Model Leveraging Mobile Applications Award recognizes the insurer who has developed a new, perhaps disruptive business model involving the innovative use of mobile technology. Max Life Insurance won the award. Max Life Insurance launched mServicing and mApp which enable digital servicing of customers, sales force and operations. The company won the award because of the use of mobile technologies to increase agent activity and engagement, enable speedy issuance of policies, and enhance business quality and operational efficiency. Be on the lookout for the 6th Asia Insurance Technology Awards in 2016. We’ll post another blog when the nomination period opens, sometime around June 2016. You can also find information on Celent’s website: http://www.celent.com/aita.

A Value Roadmap: Don’t implement a new core system without it

A Value Roadmap: Don’t implement a new core system without it
I’m sometimes asked, “What is the worst error an insurer undergoing replacement of its core solutions can make? And how can that pratfall be avoided?” There are a lot of candidates for this honor: for example poor governance, inadequate project management, underestimating the complexity of data conversion and or integration, incomplete knowledge transfer—the list goes on and on. My nominee is: Failure to define and follow a Value Roadmap as part of the implementation and near term post implementation process. Conceptually, a Value Roadmap identifies the specific types and sources of value which the new system will provide. If the insurer has already developed a good business case for the new core system, the Value Roadmap will address many of the cost reduction and revenue enhancement elements of that business case. In addition, the Value Roadmap will place these benefits on a timeline which could start (to a limited degree) during implementation, and definitely starts when the new system goes live. If the insurer does not have a reasonably complete business case for the new system (and yes that does happen); the Value Roadmap allows senior management (C-Suite and/or the Technology Governance structure) to: **  Document for future ROI and performance analyses the business and competitive rationale for the project **  Provide guidance for the remaining implementation period **  Focus on realizing value through new offerings, processes, and organizational structures Note: an earlier version of this blog appeared on the Insurance Technology Association website.

“End the Carnival!” – Innovation as Part of the Business – Practitioner Roundtable

“End the Carnival!” – Innovation as Part of the Business – Practitioner Roundtable
We just held our 3rd Innovation Roundtable in New York City and the event further underscored how important this area is to financial services institutions.  The format of these gatherings is discussion-based and senior leaders from banks and insurers share their experiences in building innovation capabilities in their firms. The New York group included large insurers (all were $5B DWP and above) and a variety of banks, from among the largest in the world to smaller, regional providers.  Mick Simonelli, previously the Chief Innovation Officer at USAA, also attended and contributed his experience. Across these firms, there is a real diversity in their approach – a reflection that innovation programs are most successful when they adapt to the culture of a company. One attendee describes their innovation strategy as making big bets only on carefully selected areas that are the highest importance to their company. Another wants to increase their “innovation velocity” and pursues incremental initiatives that, when added together, result in meaningful contributions the short to medium term. In contrast to these differences, the participants agree that that their senior leaders recognize emerging disruptive threats and/or opportunities posed by new entrants, increasing commoditization, and changing consumer expectations.  For example, one bank reports that its senior leaders are very actively tracking Amazon’s recent activity offering loans to small businesses. This awareness in these companies is not surprising, since these roundtables are attended by organizations which are already actively pursuing innovation.  Most attendees mentioned that they regularly report to their Boards of Directors on their progress. In Celent’s opinion, just the presence of a firm at the roundtable signals that they are building, or on their way to building, a competitive advantage. Without identifying individual participants, here is a sampling of the content of the afternoon:
  • One company, in their 5th year of a focused innovation program, describes their current approach as “moving away from the Carnival”, away from event, one-time crowdsourcing ideation efforts and towards making innovation a systemic and continuous part of their business. Their objective is to “create a social layer of innovation.” They were kind enough to detail the technology and process that they have used so far.
  • There was agreement that financial services firms advance innovations much too slowly.  This has been confirmed in numerous conversations that Celent has had with clients and has also validated our research. In order to address this, one company actively establishes 3rd party partnerships in order to move innovation faster. They partner with startup firms in order to increase their velocity of change.
  • A common theme throughout the day was evolving digital capabilities and how other firms, outside of financial services, are changing the customer experience.  One firm concentrates on building a “macro view” of what they want their customer to experience. As they improve and innovate their current customer process, they are using this this wider set of considerations to ensure that they remain focused. This is exactly consistent with a recent post on this blog regarding designing digital platforms (see Stop Designing to be a Digital Insurer; Use a Business Value Proposition)
  • The attendees were also global, both by birth and by company.  They report the greatest adoption of mobile platforms occurs in Asia and in emerging economies.  It was also noted that in EMEA, the experience of dealing with multiple languages, cultures and multiple European regulatory regimes increases their companies’ agility and, thus, their innovation capability. For firms that have global operations, concentrating on reverse engineering innovations from one region to another is a valuable investment and a viable strategy.
  • During the discussion about changing company culture to further innovation capability, one practitioner noted that innovation leaders have to be very careful about the manner in which they discuss emerging threats (and opportunities) with their business partners.  Leaders must be very careful to use what was called “empirical specificity” in such discussions. In other words, before beginning a discussion about an emerging threat or opportunity, an innovation leader must do their homework and be prepared to offer exact examples of actual cases where the threat/opportunity has actually taken place. Otherwise, the communication is ineffective and “Pollyannaish”.
There were a number of other very useful areas that were covered – governance, prioritization, prototyping, building to a minimal level of functionality, testing innovations, etc. Thanks to all of the participants for an active, open and productive dialog. Celent is continuing this series and we invite senior innovation leaders to join a session.  Listed below are the dates and links to the upcoming roundtables. Tokyo Feb 26: https://www.regonline.com/builder/site/Default.aspx?EventID=1435248 London March 5: https://classic.regonline.com/builder/site/default.aspx?EventID=1439152 Chicago March 20: https://classic.regonline.com/builder/site/default.aspx?EventID=1446980  

Answers to Questions from Innovation Webinar

Answers to Questions from Innovation Webinar
Thanks to everyone who participated in the Current State of Innovation in Financial Services webinar. Over 140 people were listening in! Here is the link to the audio recording: http://www.celent.com/reports/webinar-current-state-innovation-financial-services We especially appreciate all the great questions that came in.  A few were more specific to individual company situations and, in those cases, we will reach out to the specific folks that submitted them. We grouped similar questions and also reworded a few for clarity.  If you don’t see your question in these, give us a shout and we’ll be in touch. Email mfitzgerald@celent.com with any follow ups. Look forward to working with you to move innovation in financial services forward! Mick and Mike  Q: Can you help better define “breaking a tradeoff”? A: We have to credit Michael Porter with the thinking behind this important concept.  The classic example of breaking a tradeoff is delivering better quality at a lower cost.  Normally, increased quality comes at an increased cost. For example, Apple’s iTunes delivered music easier (on an iPod) and at what was perceived to be a negligible cost ($0.99). As a result, the music industry was disrupted.  An example in insurance is the multi-tiered rating of automobile policies.  Insurers using this approach were able to more accurately price high-risk drivers and the tradeoff between pricing and risk acceptability was broken. Q: Should an organization set up a standard process for innovation activities? How flexible should the process be? A: Contrary to popular belief, innovation is not all art.  There are processes which are consistent across companies which are generally recognized as leaders in innovation — identifying ideas (“ideation contests”), incubating new efforts, rotating staff into an out of standing innovation centers of excellence are all examples. An organization should have process for innovations but a key balancing act is required to ensure that the process don’t encumber the innovations (otherwise it’s the wrong process). Additionally, different types of innovations require different processes. A process improvement innovation within the organization should be managed differently from a disruptive product idea that potentially cannibalizes the traditional business. Q: Where can I learn about “Innovation report card for financial services organizations”?  (We promise, this was a question from an attendee and not a plant!) A: The report card is a consulting engagement that provides an organization with an objective and comprehensive assessment on how it rates in key success areas regarding innovation.  It is a stand-alone program designed to meet a strong emergent market need of our clients. Celent has teamed with a leading industry innovation consultant, Mick Simonelli, to deliver a practical, expert evaluation of a company’s innovation efforts. The report card results in a multi-dimensional assessment in areas such as: culture, processes, resources, strategy linkage, rewards and incentives, and performance in key areas of competitive pressure. Q: I have a feeling that th[e report card] is the classical framework in organization infrastructure for any program to be successful. It looks like it doesn’t help to answer the question on how to make the innovation flourish in a structure? (Again, we promise, not a plant!) A: Yes, the innovation report card framework includes many of the classic change management dimensions as these are necessary for success in innovation as they are with other major organizational changes.  However, at its most granular level, key characteristics specific to innovation become clear.  For example, the process assessment contains an evaluation of prototyping capability in a financial services company.  Failing fast is a necessary skill and the ability to rapidly and effectively build prototypes is key to identifying “winners and losers”. Q: What environment is ideal to build a culture of Innovation within a Company? A: This is a great question, and a real key to success. Generally an innovative culture is characterized by a spirit of open communications, teamwork, the recognition of the art of the possible at all levels, supportive leadership, and processes specifically tuned to identify, evaluate, launch and assess innovations. Cultures are all very different though, so it is important to account for the “way things are done around here” at each organization and use that as a framework for developing a plan to influence innovation within the culture. Q: Do you know on average, how much % is dedicated to an IT innovation, especially in an autofinance company? A: About the closest metric that can compare across companies is for public companies, the reported research and development expense.  Building innovation metrics across financial services is a key objective of Celent’s research and we look forward to bringing some clarity here. Q: Some companies have designated a CTO (C Tech O). Is that also an initiative that tries to cater to the same issue (drive innovation) or is that different? A: In our experience to date, the designation of a CTO does not necessarily result in improved innovation results.  A key success factor that is emerging is the degree of ownership of innovation by business leaders. While an effective CTO can be a big help to executing innovation, we recommend that a business evangelist be found. Q: Do you think innovation is critical enough for the CEO to integrate the CIO role with his own and become the CIO too? A: Great point. Every CEO should have the heart of a CIO. However, CEOs are also responsible for the business.  To ensure innovation thrives, we believe it is important to have a dedicated business executive at the top table, charged with leading innovation across the entire enterprise.

Stop Designing to be a Digital Insurer; Use a Business Value Proposition

Stop Designing to be a Digital Insurer; Use a Business Value Proposition
So much has been written about social, mobile, analytics, cloud (SMAC, previously SOLOMO). Insurers are encouraged to be “digital”. It appears to me that most of these efforts are “technology searching for a solution to solve.” I was lucky enough to be listening to my mentor once when he told me “Don’t ever start designing a solution with specific technology, begin with the business problem/opportunity.” One of my expectations for 2014, is that we can start discussing our opportunities in the framework of a higher design principle, one that is not technology-led, but speaks to delivering value for consumers of insurance (both individuals and businesses). By the end of the year, I hope to have had some great back-and-forths on what these principles could be. To start the dialog, I suggest that we start designing our solutions to increase Awareness, helping insurers, customers and agents become more aware of the risks faced by their policyholders and how initiating actions when risks change. To paint the picture, I’ll start with what Awareness looks like in insurance. Then I’ll describe how I think this can lead to higher value solutions as compared with starting with specific technolog(ies). Here are two examples from the Celent research library on innovation in insurance that tell the story of how the Awareness principle has been applied. One is live and one is a past implementation:
  • Tokio Marine & Nichido partners with a telecommunications firm to deliver location awareness for their one day insurance products. If I drive to the airport, I receive a text on my phone with an offer for trip insurance.  If I am approaching a ski area, I get a message that ski event insurance can be bought for one day for as low as $4.00. If I work at the airport or ski employee, I don’t receive the texts after the first few – the system learns that I am not a prospect. Based on location awareness, Tokio Marine is Aware that I am engaging in an activity that is not part of my typical day-to-day routine, one for which I may not be covered, and offers me a policy to cover the gap at the right time.
  • In the United Kingdom, the insurer AXA combined several pieces of public data with their internal policyholder information and created a visual map of where the London riots occurred on the morning after each of the five nights of the 2011 riots. They could tell by looking at the map which of their policyholders (mostly small retail businesses) were located in the affected areas. For those that had not reported a claim, they called them to make sure that everything was alright – NOTE: the insurer called the insured to ask if they had a loss. AXA reversed the traditional FNOL (first notice of loss) process and proactively contacted their policyholders based on this Awareness of the increased risk of their customers.
In an Aware Insurer, the process is engineered to be continuous. For example, data tools allow automated monitoring of the inventory of small business policyholders to detect changes in purchasing patterns and it is discovered that a general contractor begins to purchase roofing materials. Predictive analytics examines these changes and assigns a confidence sore regarding if this is a one-off event or more permanent change — has the contractor started delivering roofing services? Automated rules compare the inforce policy coverage with the possible new operations to determine if the contractor is performing an excluded operation that is not covered for liability loss. Digital technology then notifies the insured of this situation immediately across several technical platforms and suggest coverage options, or sends an immediate notification to the agent and prioritize is appropriately in his/her work queue. The technologies underneath Awareness include digital, analytics, cloud, perhaps some social, but these are not the “end state”. Digital should deliver unprecedented awareness anywhere any place; big data infrastructure should combine varied types and, likely, large amounts of data effectively and efficiently; analytics (algorithms) should mold this data into new insights and predictions. So, does an insurer need to be digital to make this happen? Yes. Have big data skills? Definitely. Be able to conceive, construct and test analytic algorithms? Definitely. But being a “digital insurer” won’t itself deliver this increased awareness, being able to hoover up and handle vast amounts of purchasing data won’t either.  Combining the different forces around making the insured, agent, and company more aware when a risk profile changes will bring the technologies together to solve a business problem.

I’m convinced that starting from this higher order of design will deliver more value faster, will help get business sponsors on board earlier and more completely and will avoid investment in technology for technology’s sake.  As we enter 2014 I am also sure that we are ready to have this conversation and design solutions what change insurance from a backward-facing, financial indemnity product to a continuous, predictive, risk management service.