Despite digital transformation (DT) being necessary to maintain a competitive edge, many businesses are slow to implement it.
A recent Forrester report found 70% of organisations either have a DT strategy or are currently working on one, but only 21% of companies believe they have finished their digital transformation. Interestingly, 87% of business leaders still believe that digital transformation will disrupt their industry.
With four out of five digital transitions reportedly failing to reach their goals, it’s understandable why these transformations strike fear into the hearts of many experienced executives.
Fear aside, undertaking DT is not only necessary in maintaining competitive advantage, but it ensures less disruption in the long term.
So says Kevin Kerridge, CEO of Hiscox USA, who has successfully launched DT for the leading specialty insurer in both the UK and US.
Kevin, who created Hiscox’s first direct online business in the UK and who has been instrumental in driving forward the firm’s ambition of becoming a leader provider of small business insurance in the US, first forayed into DT in the late 90s when dial-up-modems were a thing and before insurtech was a thing.
“My mandate was to take Hiscox UK digital to streamline the commercial insurance opportunities for businesses,” Kevin tells Business Chief. “Fast forward to 2010, as Hiscox entered the US market, we discovered no commercial insurance company offered a digital platform to help companies purchase needed insurance.”
Listed on the London Stock Exchange and headquartered in Bermuda, Hiscox currently has over 3,000 staff across 34 offices in 14 countries.
And the rest is history. Kevin launched the first business digital commercial insurance offering and Hiscox now has 600,000 policies on just its digital platform.
Kevin, who has secured numerous industry accolades, points to a few key tactics that are essential for delivering a successful digital transition.
Depending on the organisation, the commitment to digital transformation, and the team’s ability to overcome problems, DT can take anywhere from six months to six years. You will need to be flexible, regardless of the initial timeline established in the strategic plan, to allow your teams time to react and resolve issues.
The first step, he says, is to gather the right team.
Building a digital transformation team
“The three crucial factors behind a successful digital transformation are people, people, and people. If you don’t have the right people managing the transformation, you will likely run into problems quickly even with an unlimited budget.
“It is imperative that you include technical experts, project managers, and executive leaders for the transition to be a success.”
- Technical Experts Close collaboration with technical leadership will add the needed expertise to the decision-making process that is essential to success. Their technical expertise in developing software and coding will be critical to effectively implement the transformation.
- Project Managers To gain accurate and reliable reporting about key milestones, you must establish a direct and honest relationship with project managers. Their time management skills are crucial to overseeing each element of the process and keeping everyone on track. They must feel comfortable sharing both good and bad news.
- Leadership This starts with you and your leadership team maintaining realistic expectations about the timing of the process and what can be accomplished. Provide a detailed strategic plan, prioritize the DT elements, and make sure you are motivating each team. When a DT team is confident in your support, you’ll decrease chances of having a project team member avoid reporting an issue for fear of reprisal. A transformation runs smoothly when issues are identified and resolved as quickly as possible before they snowball into a much larger problem.
Kicking off the digital transformation process
Before starting the process, Kevin says teams must consider the needs of potential customers.
“For us, that meant conducting multiple focus groups to understand the insurance buying pain points of our customers to determine how we could resolve their issues,” he tells Business Chief.
“We recognise that the choice to purchase products is a very personal one, and we keep this top of mind. While digital is the priority, it’s important to realise that you cannot fully eliminate traditional sales channels. Some customers may prefer to speak to a salesperson over the phone or meet in person with an agent who can present them with options. Offering every sales avenue is key to giving customers an option they prefer.”
A further consideration for DT is the cost of technology. What will it cost to make a customer’s journey smoother? Every change can be expensive. By determining preferences, organisations can eliminate technology costs associated with unwanted digital tracks and deliver the highest return.
Among the biggest obstacles leaders face when engaging in DT is employee pushback, says Kevin.
Challenges faced by executives in digital transformation
“Many US companies fail in their DT efforts because employees did not buy into the transition. Especially employees who will be experiencing the greatest change, may feel threatened or fearful that their jobs will be replace or made redundant.”
Kevin urges executives to communicate their plans and set expectations to avoid fear, rumours and anger – often natural responses to unknown disruption in an employee’s work life – to avoid employee attrition as a result of uncertainty and stress.
It’s not only employees that need consideration.
“Many businesses rely on a delicate ecosystem of partners, suppliers, and brokers that should be considered, and some consulted, when going through a digital transformation. It’s important to keep them informed and make sure they are on board with the changes. They can also be extremely helpful resources, as many have experienced similar transformations.”
Research shows a full commitment from the CEO and executive team is pivotal in addressing all issues and moving forward on any DT initiative.
“Leadership skills will continually be tested during this transformation,” explains Kevin.
“Constant communication between teams is key, and it falls to leadership to make sure the ball isn’t dropped on this. Because the roles and responsibilities of your team members may be ever evolving, regular check-ins are necessary to ensure they have the appropriate resources to perform their roles effectively.”
Budget is often a stumbling block too. Deloitte research shows more than 50% of IT budgets are spent on maintenance and only 19% on innovation.
For the sake of the organisation’s current and future business success, Kevin urges leaders to flip the script and devote a higher percentage of budget to innovation to accomplish their goals.
“DT is an ongoing process, however if you dedicate your organisation to making the initial switch, the benefits will be immeasurable not just for the customer experience but for internal operational efficiencies as well.”
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