Building a Digitally Enabled Future: An Insurance Industry Case Study on Digitalization
Situation faced: INSUR is one of the top fifteen insurance companies in Germany. Between 2000 and 2015, the organization focused on (1) external growth through several acquisitions as well as (2) the integration of these acquisitions including the corresponding IT landscape into the overarching organization. From 2016 onwards, INSUR’s strategic focus shifted to actively shaping its group’s digital journey, including the build-up of new digital capabilities to fulfill the agility and innovation requirements of the business units. INSUR’s strategy focused on growth and efficiency gains through digitalization as well as on fostering innovation in developed digital solutions and services.
Action taken: At the end of 2015, INSUR's top management started a strategic digital transformation initiative to define the cornerstones of the groups’ innovation and digital agenda. This agenda followed six strategic imperatives: (1) creating digital awareness throughout the organization; (2) developing a group-wide common understanding of digitalization and establishing the first digital and innovation strategy; (3) selecting and validating strategic focus areas for digitalization; (4) enlarging the company's digital ecosystem using collaborations with startup accelerators and universities; (5) setting up a digital lab to develop and prototype digital use cases and (6) enhancing and scaling the digital lab towards a digital factory.
Results achieved: INSUR successfully initiated its digitalization journey and developed a high-level, group-wide digital and innovation strategy and selected its digital focus topics. Further, it set up an innovation management process and enlarged its digital ecosystem. The digital lab that INSUR started, however, did not take on as well as expected. Realizing that a small incubator is insufficient, INSUR is currently upscaling and transitioning the lab towards an integrated end-to-end digital factory.
Lessons learned: While all changes might require some management support, the nature of digitalization requires top management support across all business and functional areas right from the beginning. Even if there are still legacy systems that need to be shut down or renewed, digitalization should be addressed early on while continuing to renovate the IT. Furthermore, fostering cultural change to be an attractive employer for new digital talents, which are required on all levels to make the digital transformation a success, is a key success factor. Finally, handling and actively managing concerns and required cultural change within the organization are paramount.
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