At the 2016 IASA conference, held in San Antonio, Texas - Novarica, Erie Insurance and ValueMomentum collaborated to present a session titled ‘Digital Journey: From Strategy to Implementation’ where Ruben Fechner, Senior Vice President, Erie Insurance Group shared his insights on how organizational leadership, organizational structure, a strong digital team and technological architecture play a crucial for digital success.
Leadership as a change agent
According Ruben Fechner, organizational leadership needs to act as change agent to spearhead digital transformation; whereas management should have the skill set to manage complexities around digital transformation. Both are essential for the transformational digital journey; in absence of these elements, an insurer will face a lot of challenges.
Flatten the organization
There is a need to reorient the processes and operations within insurer’s organization to promote a culture of innovation for successful digital transformation. Traditionally, the organizational structure of insurance industry is such that different teams within the organization work in silos where responsibilities flow from one team to the next. This type of organizational structure makes it difficult for the leadership to keep track of accountability for any kind of solution. To evolve into a digital organization, insurers need to move to an accountability model where they flatten the organizational structure. Cross-functional teams including IT, business, agents, customers and technology partners can be engaged and involved from the beginning to make digital transformation an organization-wide initiative.
Ruben further added that Erie Insurance as an organization is maturing where they are leveraging their independent agents to get regular and open feedback to improve on their business processes and technologies. Ruben admitted that it is really difficult for insurers to keep up with all the technologies available in the market. He suggested that independent agents can be leveraged as innovation think tanks to gather information on technologies. Subsequently, insurers can invest and scale on these technologies to create a better experience for all. Commenting on the importance of collaborating with technology partners, Ruben suggested that insurers need to count them as strategic partners rather contractors or vendors for the success of digital transformation.
Organizing work within the organization
Speaking on how Erie insurance organizes work given that these experiences are going to impact the entire organization, Ruben said that a company has to organize their work differently. Erie is working on grouping their work from the corporate perspective vs silos as it has been in the past. According to him, there are organizational entities within Erie on corporate levels that help to see if there are disconnects in terms of what Erie is trying to do. The goal is to create the experiences as well as advance their products and improve efficiencies. This creates another management dimension – they must work from a corporate perspective instead of individual capabilities,
Technological architecture for digital should come from the bottom up
Commenting on developing technology architecture for digital, Ruben stated that insurers need to start building technology from inside and then go out. What it means that whatever the experiences insurer is trying to implement at the front-end have to be supported by insurer’s core system, otherwise the front-end system would not function as desired. For that reason, insurers need to make some investment initially in the core systems.
Watch a quick video of Ruben Fechner, SVP, Erie Insurance Group, speaking at the IASA 2016 session: Digital Journey - From Strategy to Implementation about organizing team and technology to embrace digital.
If you are inspired by the takeaways of the post and want to learn more, click below to watch the complete recording of Ruben Fechner, SVP Erie Insurance, speaking at this 2016 IASA session.