Digital transformation: Empty promises equals digital hesitancy!

As we gear up for key democratic elections around the globe, let’s brace ourselves for heightened political rhetoric. Politicians can have a reputation for stretching the truth and then leaving voters frustrated when the soundbites fail to translate into policy action. Disappointingly, I’m witnessing this scenario much closer to home within the insurance industry. Repeatedly I’m speaking to business leaders who are looking for support to reset their digital ‘transformation’ programmes following the relationship breakdown – as a result of empty promises – with their software vendor.

Over-promising and under-delivering

The vendors responsible have left these insurance businesses in a state of ‘digital hesitancy’ by over-promising what they could do from a product and delivery-timescale perspective. But what’s even more unacceptable is that these bad players substantially underquoted to get the signature and then once the ink had dried revealed extra, necessary costs. The consequence? Projects have been terminated with the respective businesses reeling from the experience. Consequently, they’re now unsure as to how to salvage their digital plans and naturally are super cautious about how they implement future digital engagement.

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The insurance sector understands that it needs to optimise and evolve its digital capability. While some are more mature in this acknowledgement and want to be at the forefront of technology and incorporate the latest innovations, others simply want to move off their legacy platform. But vendors with a trail of empty promises are, in my view, preventing the insurance industry from moving forward.

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While I contemplate writing a manifesto calling for the regulation of software vendors, here’s eight pointers to empower insurance businesses through the vendor selection process to identify the right long-term tech partner.

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1.???? Transparency of total cost of ownership

Due diligence is your friend so max it to your advantage. When talking to vendors focus on understanding the financial outlay and the required ongoing financial commitment around the total cost of ownership of your digital evolution programme.

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You’re looking for transparency of your total cost of ownership across a realistic time period. Remember this relationship will last more than one year, budget and plan accordingly. Push for robust answers from vendors until you’re satisfied that you’re covering ‘known knowns’ as well as ‘known unknowns’ and that the tech and your chosen partner have the flexibility to quickly cope with the inevitable ‘unknown unknowns’.

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2.???? Commercial stability

Make a point to scrutinise the commercial stability of vendors at the start of your RFP process. Understand their funding history. What’s their value and what does their fundraising look like – how many investor fundraising rounds have they been through? Could they be under shareholder pressure to sell at all costs to meet an eye-watering valuation? Be frank, how many systems do you think they will have to sell to repay investors?

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3.???? Sustainable talent

The foundation of every vendor is the talent of its team and you as the client want to truly benefit. When scrutinising vendors’ financials, explore how talent has been recruited sustainably. For instance, could a high-value fundraising round create salary inflation leading to the potential loss of talent in a few months’ time when the salaries can’t be sustained in the long-term?

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4.???? Study the vendor’s digital roadmap

Take a forensic look at the vendor’s very own tech roadmap as it’s critical to the success of your digital evolution programme. What’s their plan for tech updates and new features and could these come too late down the line for the enhanced functionality you’re looking for right now? Think about your operational ambition to deliver now as well as in the future.

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Be realistic. A milestone highlighted on a vendor’s roadmap isn’t an absolute guarantee of timely, or actual, delivery so consider any potential negative impact to your plans. Your commercial success is reliant on their own digital roadmap staying on track so don’t ignore.

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5.???? Go micro

Become laser-focused on your requirements and take the time to explore in minute detail. Concentrate on your micro requirements to support your macro commercial gains. Avoid groupthink by getting the right colleagues in the room from the start of the discovery process. Ask them how they want to deliver a service now, and in the future, to make life easier for them and the customer and how tech can work to support their specific business targets, for example the ability for the Sales team to plug in a CRM system further down the line.

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6.???? Take the TLC approach

Seriously consider doing a light-weight proof of concept followed by a minimum viable product before you vendor. If you’re unable to do this in-house then find someone you trust, who comes recommended, even if they aren’t part of the final selection process. I like to call this the TLC approach – test, learn and choose. Through this low-risk approach you experience your vision without fully committing to an expensive implementation but you’re taking action.

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You’re looking for a partner who will put their arms around you and support you on the discovery journey. Avoid any vendor who wants to rush through a well-structured, formal discovery process to get your signature. I believe that no true long-term tech partner can possibly deliver your key requirements if they haven’t spent the time to really get to know and understand you.

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7.???? Ask for a show and tell… and then break it

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When it’s time, get your ultimate users in the room to play with demos and proof of concept to break the system. Ask yourself how the vendor reacts in this situation: will they let you loose on the demo to get a real sense of how it works or do they want you to sit there and smile and nod? Don’t take someone's word for it that vital functionality exists if you haven't actively tested it for yourself.

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8.???? Do you want a vendor or a partner?

A positive move in recent years is clients applying more weighting to a vendor’s culture fit when scoring in the selection process. It’s a sensible, welcome approach. This will be a long-term relationship – we’re talking five to ten years as partners.

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Explore how you will be able to work with these people. Will they always have your back when the going gets tough? Do you think they will always do the right thing? Focus on the right fit of long-term relationships and the stewardship of the vendor’s senior team. Are you seeing the demonstration of values which align with yours? Ultimately you want your vendor to become a true partner. Strong, long-lasting relationships are built on transparency – honesty and openness.

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Manifesto for change

I realise that regulating software vendors may seem extreme. But empty promises are damaging to the insurance sector and ultimately to the policyholders who are funding the digital transformation.

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Digital programmes should be about driving an insurance business forward – improving efficiency and the user experience, unlocking innovation and growing revenue. They shouldn’t be about deciphering the vendor rhetoric, failed implementations and the resultant digital paralysis as leaders work out how to rescue their transformation vision.

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My manifesto would be pretty short and sweet, simply calling for vendors to do what they say they can do while being upfront about what they can achieve. After all in life, our actions divided by our words, equals the trust and respect we earn. Let’s remember that.