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Digital transformation done right

Successful efforts start by identifying customers’ pain points. Two experts reveal how to implement a successful transformation plan.

Digital transformation done right

Starting in March 2020, nearly every company experienced a digital transformation—whether they liked it or not. The pandemic ushered nearly all transactions and interactions online literally overnight. The business repercussions of those first, frenzied months still reverberate—a subsequent explosion in e-commerce, the pivot from theaters to streaming, and remote work becoming the norm, to name just a few—as the companies best prepared to embrace or enable these trends were rewarded with 11-, 12-, and even 13-figure market capitalizations.

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Nearly two years on, what’s more remarkable is how many organizations failed to manage this transition—a whopping 70% haven’t met their goals, according to research by the Boston Consulting Group. Common causes include senior executives clinging to a wait-and-see approach, along with the delusional belief that just adding tech will make their current operations a little faster, cheaper, and more efficient to run. That’s a recipe for disaster in light of both customers’ post-pandemic expectations and new technologies such as AI and the Internet of Things coming to the fore. The consequences are stark—successful organizations achieve earnings growth 80% higher than their peers. 

One industry ripe for transformation is insurance, with many carriers laying the foundation to redefine what’s possible, says Shivani Govil, chief product officer of CCC Intelligent Solutions. She notes that auto insurance claims in the U.S. alone can cost more than a billion days of lost productivity annually. “There’s a huge opportunity to take what’s still early stages of digitization and apply intelligence more broadly to offer a seamless end-to-end experience, while retaining the empathy that’s core to the industry,” Govil said during a recent panel discussion as part of Fast Company Innovation Festival 360. Govil, who was joined by David Rogers, author of The Digital Transformation Playbook and a faculty member at Columbia Business School, also provided an inside-outside look at transformation journeys, including those in the insurance economy and enabled by CCC technology.

For insurers, that journey began with utilizing tools to estimate the damage in collisions—previously an analog task requiring a repairer’s eye and potentially an adjuster’s visit. Today, using CCC’s technology, AI-powered claims tools assess photos of vehicle damage and within seconds generate an estimate without human intervention, saving customers days or even weeks in scheduling repairs. “We’ve gone from mostly manual processes to digitizing and automating them, and now we’re using intelligence to help customers assess, guide, and navigate more frictionless experiences,” Govil explained.

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This is a textbook example of digital transformation, noted Rogers, who literally wrote one. “I want to stress that Shivani didn’t start by talking about the technology,” he said. Successful efforts start by identifying customer pain points—such as the lengthy wait to repair a vehicle—and use tech to redesign processes, services, and even entire business models rather than adding a sprinkling of data to what’s already in place. “Companies should step back and ask, ‘What is the problem we’re actually solving?‘ “ he advised. “This is more about strategy and organizational change than tech.”

CREATING AN “END-TO-END EXPERIENCE”

In CCC’s case, the problem was clear: helping customers address a disjointed and lengthy claims-and-repair process following a potentially traumatic event. The goal, as Govil described it, is creating an “end-to-end experience” in which a formerly reactive procedure—a collision occurs; at each step, someone waits for the customer to initiate the next one—becomes a proactive one. In this vision, onboard sensors and telemetry can detect an incident the moment it happens, automatically triggering a claim and activating an entire suite of services and an ecosystem of providers designed to support and guide the customer. “That’s what we’re trying to accomplish,” Govil said. “The technology is just a layer on top of that.”

The pandemic reset everyone’s agendas. “It stopped being a question of if and became a question of how fast—as in boards asking, ‘How much faster can we do this?‘ “ Rogers said. Companies that had already started on their journeys—such as Disney, which had launched Disney+ just a few months before—raced to finish and reaped the rewards. Elsewhere, the crisis spurred executives to embrace changes that were once unthinkable. “What we learned is that the biggest barrier to transformation has been political capital all along,” Rogers said. The challenge now for leaders, after the adrenaline has ebbed and deep fatigue has set in, is to tell a new story and make the case for continued change. “You can’t always rely on the house being on fire,” he added. “You have to bring people with you.”

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For Govil’s team, the pandemic instantly justified their investments in automated claims. “Insurers could no longer send an adjuster or an appraiser out to people to assess the level of vehicle damage,” she said. “No one was going anywhere.” Usage of CCC’s digital and AI tools more than doubled in 2020, and her company’s research revealed that 80% of consumers prefer the mobile and digital tools over traditional call centers. For her, the big takeaway is that “we need to meet customers in the mode of their choice,” and that digital transformation can bolster a company’s ability to deliver empathy as well as drive efficiency.

THE FIVE OBSTACLES TO A SUCCESSFUL TRANSFORMATION

CCC’s technology is behind some of the companies in the 30% succeeding in their transformation efforts. Why do so many others fail? Rogers highlighted five barriers holding organizations back:

1. No shared vision. Some companies, “hired a chief digital officer because [their] two biggest competitors did!”

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2. No growth strategy. For others, Rogers added, “it’s just about digitizing the things they’ve done before.”

3. They’re stuck “using the same processes and org structure they’ve used all along.”

4. An excessive focus on planning. Or, as Rogers put it, “Let’s find out what we should do, rather than do it.”

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5. Trying to transform, but with the same old culture and capabilities.

“And all of those things are going to give you a lot of heartburn and a lot of running around in circles,” Rogers concluded.

For her part, Govil sees the next step in her company’s journey as continuing its work to help customers redefine the insurance experiences of tomorrow. “It used to be about peace of mind and protection,” she said, “though now peace of mind is expanding from protection to prevention as well. How can we further leverage technology from an increasing number of sources to protect policyholders and the public?”

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That’s the kind of transformation everyone can get behind.

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