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CORE SYSTEMS

CORE SYSTEMS

Take a Business-Driven Approach to Continuous Improvement for Core Systems and Processes

Sean Sweeney | November 25, 2019

Escape rooms are becoming increasingly popular. A well-designed escape room will present its captives with a set of challenging problems that, when solved and pieced together, achieve the singular objective of the participants in the room—to escape. The creators of successful rooms can establish a puzzle with a clear correlation between solving a problem and the objective behind it. Essentially, the themes reflect the problems. If the creators threw a bunch of riddles in a room with no defined objective, they would significantly diminish the entertainment value of the game.

A property & casualty insurance carrier is much harder to organize than an escape room. Consequently, many P&C carriers utilize a problem-focused approach when maintaining and supporting their core systems. They fall into the trap of accumulating a list of problems with no correlation to overall business objectives and no clear path to continuous improvement. The objectives of organization do not often connect with the problems the support team deal with. How can they shift to a continuous improvement model rooted in overall a business objective? Can they escape the room?

Solving a problem in a vacuum is a reactive undertaking. How many times have you heard the question, “What is the business problem?” While it may feel overused, anyone who asks this question is likely on the right track. It correctly indicates the technical problem at hand may be too far removed from the big picture.

We need to pinpoint what the business wants to accomplish. But, is the business problem far enough? Maybe the right question to ask is, “What is the business objective?” It may seem like there isn’t much of a difference, but it’s a question of nuance. A small shift in mindset can make a substantial difference. Having a continuous improvement mentality is a great start. What drives the improvement is what matters most.

In our white paper, Nine Steps to Navigating a Post-Implementation Journey, we discussed the importance of a continuous improvement mindset. Today, I will build on that concept and share the next steps in taking a business-driven approach to push that mindset within the context of continuously improving core P&C insurance systems and processes.

What’s the difference between being problem-focused and business-driven?

Core system implementations are in a time of transformation, and we tend to develop a scope and system-based approach in order to manage the enormity of the work. Is this change in scope? Is it a defect or an enhancement? In order to get through the implementation, we focus on implementing a solution that is laser-focused on a defined scope.

When the solution doesn’t “work,” we consider it to be broken and need fixing. Similarly, we fixate on an agreed upon solution that was never really going to meet evolving objectives entirely. Once beyond transformation, there is no need to rely on artificial drivers for problems. It is the perfect time to get back to understanding what the business desires to accomplish.

According to a 2018 report by Gartner, “Objectives are generally formed based on the strategic choices of the business, and goals need to be aligned with the objectives. Otherwise, the innovation initiative can succeed in achieving the goal, but will not have the right impact on the business overall.”

Many of the problems encountered post-implementation are a result of trying to provide a technical solution to a business process that no longer meets the overall objective. Rather than looking to solve the pain point, there is an opportunity to understand what the business wants to achieve at this stage. Odds are, it is different than what we thought at the time of design during transformation.

Harnessing the business objective mindset

An effective solution involves a change in mindset or a shift toward a different mindset. Understanding the need to focus on business objectives versus executing those objectives are two different things. You can’t flip a switch and have everyone in your organization focus on only business objectives. The good news is every little bit helps. This is one case where a series of small victories results in a strong overall impact.

Three steps for solving the business-driven mindset puzzle

Shifting the mindset of an entire organization is easier said than done. It takes commitment. Here are some things you can do to move in the right direction. Keep in mind that every little bit helps. You can start small and build from there. You do not need to be perfect with any of these.

1. Define achievable objectives

One common challenge with the business objectives we traditionally communicate is they are often too lofty or abstract for a team focused on a specific business function or step. An executive responsible for an entire line of business may have the general goal of improving underwriting efficiency, penetrating new markets or improving loss ratios. The executive responsible might express these objectives to the CIO, who will likely pass it along to their reports with no additional specificity. While it is great information, it’s hard to correlate that to an incremental improvement opportunity in a Policy Admin system. The objective gets lost in the shuffle.

Creating structured interaction opportunities across multiple levels of the business will help you understand the underlying objectives that leads to the overall business objective of the organizational leaders. The more you structure business objectives into manageable pieces, the easier it becomes to achieve organizational mindset shifting. If this becomes too much of an obstacle, consider an emphasis on Business Architecture or Process Excellence to help create digestible components of overall business objectives.

2. Challenge and trust your team

The single biggest deterrent to continuous improvement is the notion you should minimize system support and maintenance from both a cost and skillset perspective. If you do that, you miss out on enormous opportunity. A key tenet to continuous improvement is to allow everyone to achieve growth in increments.

Most likely, you have a team, that when challenged, effectively focuses on and achieves an incremental objective. The key here is to infuse your team with talent, provide them with fulfilling and meaningful objectives to meet, and then trust them to do it.

3. Don’t just fix problems. Put them into perspective and solve them

When you focus on business objectives, it does not mean individual problems are not important. Most problems are very real and very important. You still need address and attend to them. What matters is the way in which we address them. Problems, issues, and even patterns of problems need perspective. How is this problem impeding the business objective, and more importantly, is there an opportunity for improvement? Aspire to understanding where problems fit against your objectives and seek to improve beyond them.

This part of the continuous improvement mindset helps protect us from bumping up against an improvement ceiling. If we only fix what is broken, we will only be as good as when we started. Conversely, if we put problems into perspective, we can solve them by providing a solution that advances our objectives.

Are you using a problem-focused approach when maintaining and supporting your core systems? Harnessing a business objective mindset ensures your team understands what the business strives to achieve, rather than attempting to simply solve riddles and pain points. By defining achievable objectives, challenging and trusting your team, and maintaining a continuous improvement mindset, you will have a greater chance of escaping the problem-focused room.

 

 


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