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. Ruben Fechner, Senior Vice President and Ben Noble, Vice Presidents Digital Experience from Erie Insurance Group were among the panelists who shared their experiences going through their digital transformation journey. The article briefly discusses the seven key takeaways from Ruben and Ben’s presentation at the session.
Learn more about their session, Digital Journey: From Strategy to Implementation, here.
1) Outside-in and end-to-end orientation for customer experience
When Erie began their digital journey, they wanted to ensure not to replace ‘human touch’ with technology. The core objective of Erie’s digital transformation program was to enhance customer, agent, and employee experiences through digital innovation. Erie had a change in their organizational orientation when they started their journey - to work with customers, agents and employees in a way they want to engage and interact with them the best. This is completely an outside-in orientation, which involves looking at insurers’ business processes from a customer’s eyes.
Another important aspect of Erie’s digital journey is the creation of customer journeys, which are end-to-end. At Erie, customer journeys were not created merely to operationalize a specific business function, but they were part of a larger process that the customer experiences. While creating these journeys, they considered scenarios even before an actual loss happens and took into the account customer's emotional experiences involved at each stage of the journey.
2) Order matters in technology investments
Carriers usually adopt the tactical approach while investing in technologies to support digital innovation. The tactical approach serves to attain only short-term goals without taking into account the values it could add to organization's long-term digital strategy. It is critical to understand the implications of adopting tactical vs strategic innovations.
At Erie, however, such technology conversations would start by identifying the broader objective of an investment. Then they would try to understand the customer, agent and employee experiences involved, followed by translation of the experiences into a process. Then they would decide whether the process needs an upgrade or replacement, and only then they would talk about technology.
3) Reinvent Yourself
Digital technologies brought huge opportunities for the carriers, which enabled Erie to reinvent their business models and reimagine their customer, agent, and employees engagements to provide superior experiences. Erie harnessed the power of digital to reach out to new audiences widening their revenue streams.
4) Reuse your core systems
Carriers’ core systems are responsible for managing their back office operations such as policy administration, claims, billing, etc. These are key to their business, but are built of age-old technologies incapable of supporting modern customer engagement technologies.
Erie understood the criticality of keeping their front-end innovations independent of the core systems to meet faster time to market with customer experience innovations. To overcome this technology barrier, without rebuilding the core systems, Erie partnered with technology service provider to add a component (API gateway) in their architecture, which enabled them to separate the front-end systems from their core systems. Thus, Erie could completely control the experiences at the front-end without the core systems functions dictating them.
According to Erie, partnership is crucial for consultation in defining and implementing digital transformation strategies. Considering the heterogeneous systems and technologies involved in digital transformation, carriers’ IT department may not be able to figure out the complexities and the solutions on their own. Further, carriers may not want to invest their time and effort developing these technologies, as this is not core to their business. Partnering with a digital solution provider who has already invested on these digital solutions can help carriers get connected with all the technologies and accelerate their transformation.
6) Team structure
Erie had gone through a transformation in their team structure. They built a presentation team, which is responsible for creating end-to-end experiences for their entire business processes and separated the presentation team from the core systems teams. However, this team needed to work in close collaboration with rest of the teams at Erie to create consistent and empathetic experiences. To achieve this, Erie conducted an org-wide orientation to ensure that working in the presentation team does not require one to have expertise in policy, billing, or claims processing domains.
7) Team interaction and management of work
Traditionally, the organizational structure of insurance industry is such that different teams within the organization work in silos. This structure makes it difficult for the leadership to keep track of accountability of a solution under development. To evolve into a digital organization, Erie moved to an accountability model where they flatten the organizational structure. Cross-functional teams including IT, business, agents, customers and technology partners were engaged and involved from the beginning to make digital transformation an organization-wide initiative.
Carriers need to organize their work a little differently to achieve the digital goals. Everyone in the organization needs to understand how all these user experiences are going to impact the entire corporation. To address this, Erie grouped their work from a corporate perspective and then sequenced it from corporate perspective. There are organizational entities within Erie that look into if there are disconnects in terms of Erie’s core objective of creating modern and enriching user experiences.
You can watch Ruben Fechner and Ben Noble sharing their experiences with Erie Insurance group's digital journey by playing this video:
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