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Cloud and Complexity in IT

Companies are moving to the cloud for speed and agility. But many find they are not moving fast enough to reap the promised benefits.

It’s an old story by now—the cloud is the computing of the future. What has become evident in recent years, however, is cloud has established itself as the computing of the present—and the agile IT architecture it has enabled is critical to any organization’s efforts to increase efficiency and business resilience. In other words, transitioning IT capabilities to the cloud is seen as an (if not the) critical success factor to realizing digital transformation goals. An MIT Technology Review Insights survey has found that while an overwhelming majority of technology decision-makers are using the cloud to operate with more speed and agility, many believe they are not moving fast enough to achieve those benefits. Here are the main findings: 

Companies are looking to the cloud for speed and agility. Nine out of 10 respondents say they are trying to move their infrastructure to the cloud to run as quickly and nimbly as their business objectives require. Two interdependent drivers—scaling up infrastructure quickly and increasing business agility and speed to market—were cited as the top cloud adoption drivers by respondents. In reimagining their customer engagement models, forward-thinking insurance executives have identified ecosystems as essential to future success.

Migration schedules are challenged by complex integration. While respondents want to use the cloud to enable more responsive operations, nearly half, or 47%, of surveyed executives believe their organizations are not moving to the cloud on schedule. Most of those have found migrating workloads, data, and operational processes more difficult than anticipated. Another layer of complexity: integrating a tangle of on-premises and cloud systems and cloud applications. Moving to the cloud, while offering a step-change in the cost and capability of IT resources, is not a simple process.

The bottom line is that insurers may need to become more digital, efficient, and agile if they are to find new revenue streams, boost customer engagement, achieve sustainable profitability, and generate higher returns on equity. Incremental enhancements in disparate parts of the business or traditional approaches to cost-cutting are not likely to work. In fact, for the top 10 auto insurers, expense ratios are at their lowest level in a decade – according to S&P Market Intelligence¹ -, suggesting that further cost-cutting won’t be enough to expand growth. Still, most insurers have been reluctant to invest in large-scale transformation, partly due to past change initiatives that failed to deliver the expected results.

The approaches to modern architecture are diverse. There is tremendous diversity in the technology and tools that organizations are deploying to modernize their IT capabilities: roughly half of respondents indicate they are deploying application programming interfaces (APIs), containers, or serverless architecture. Microservices are also fairly widely used, and adopting multiple technologies is the norm—the average respondent indicates their organization is adopting or planning to adopt at least two technologies. Organizations are adopting multiple approaches to modernizing IT infrastructure because cloud migration requires a radical reorganization of infrastructure and development teams, processes, and resources. They need to be reworked into a continuous integration, architecture, and delivery process, through which new capabilities are constantly deployed, evaluated, and refined. 

Collaboration is an important part of the digitally transformed organization. With technical transformation comes operational and organizational change. More than three-quarters of the survey’s respondents believe that better cross-organizational collaboration is the greatest capability enabled by their digital transformation efforts.  

The inevitiabilty of cloud migrations

Moving workloads to the cloud has become common practice for organizations seeking to achieve enhanced performance and cost efficiencies. Only 8% of survey respondents indicate they have not yet begun to transition to the cloud. “The cloud is one of the major areas of modernization within IT infrastructure today,” says Ed Bednar, an associate director at the global consultancy Deloitte who leads the company’s cloud infrastructure efforts. Cloud computing lets any company do what previously only tech giants could do, he says. “It democratizes access to infrastructure—infrastructure that is highly scalable and secure—and allows service providers to operate their data centers and the infrastructure that they run wildly effectively, in terms of costs.”

Within insurance, ecosystem-based models typically enable interactions across the value chain by leveraging a differentiated infrastructure to allow for better service offerings, richer customer interactions, and higher rates of automation. Typically, insurers benefit from ecosystems via:

Many legacy tools are really not meant for the type of cloud tools that are available.  So companies have to think about moving to a whole new type of infrastructure to enable fresh capabilities.  The answer for most is an API-based approach.  The benefits can be many including overcoming the need to constantly worry about business rules, security, and data collection processes.

In an API-based approach, the business rules, related data, and compliance requirements are embedded into the collaboration between teams and external partners enabled by the new architecture. 

The original version of this article was first published on www.technologyreview.com

The API Economy Is Coming, and Fast.

In little more than a decade, application programming interfaces (APIs) have transitioned from relative obscurity to become the “digital glue” that empowers developers to create new software applications, partnerships, and even new businesses. This business-to-developer (B2D) market is quickly becoming one of the fastest-growing opportunities within cloud computing.

An API is a specification (think of it as a contract) for how two pieces of software talk to each other and exchange data. Web 2.0 companies were the first to recognize APIs – historically used by developers to help teams work without stepping on each other’s toes – as products to be shared with (and sold to) customers and partners. In just a few short years, APIs have become a crucial channel, attracting customers with the ability to extend products, helping partners deliver the value they promised, and growing the ecosystem as a whole.

In today’s world, having a strong API strategy isn’t just good software practice; it’s a powerful business practice. Amazon has built a multibillion-dollar revenue business in Amazon Web Services (AWS), leveraging powerful API-based elements such as EC2. Google Maps would be a much smaller business if the only access was through its website directly. Twitter has opened up an entire class of businesses and analytical modules by sharing its data API and platform. Even Salesforce.com – with over 800,000 developers and more than 2.5 million applications on the Force.com platform – proudly states that API calls drive more than 60 percent of total traffic to the site.

Empowering developers to build against your platform doesn’t just create value for partners; the API provider also wins by expanding the ecosystem, increasing retention, and driving up the value of the platform. Even more importantly, end customers win when all their products work seamlessly together. Take Box — its API-based integrations with popular applications like Salesforce.com, Yammer, Jive, Netsuite, or even custom internal applications make it easy for end-users to work with their files wherever they need them. Similarly, DocuSign’s API lets customers design e-signatures right into their workflows. For example, when a rep closes an opportunity in Salesforce, DocuSign can grab all the right data and automatically send out a contract for signature.

Another example is Twilio, where over 200,000 developers have built applications on top of their API-based communications service offering. Opening up for the first time what used to be a completely cloistered world of telecom boxes and copper wires, Twilio gives developers an easy way to use all the communication services we have on our phones (SMS, voice, Shortcodes, etc.) in web and mobile applications. This enables a slew of new use cases, from the SMS alerts you get from Uber when your car is arriving at highly customized call centers for Home Depot and others.

The common thread here is to take something that’s difficult (or just plain annoying) to do and make it easy for the developer to use, at a reasonable price — much like software as a service (SaaS) companies do for the B2B world, and consumer electronics do for you and me.

Companies like these have shown the value of executing a strong API strategy, and we likewise encourage our SaaS and PaaS (platform as a service) companies to do the same. We’re also seeing more companies finding success with an API-first approach to the B2D market. Layer in the fact that developers are rapidly building a new marketplace of API-driven mobile apps projected to be worth $25 billion in 2015, and we’re at a key moment in time for the API economy.

The original, unedited version of this article was first published on www.venturebeat.com.

How to Improve NPS: 7 Proven CX Strategies

Customer experience metrics like Net Promoter Score® (NPS®)  matter. NPS has gained a lot of traction in recent years and is now the most widely used CX metric. But now that you’re measuring it, how do you improve NPS? Here’s a detailed article on why you should make it a priority to improve NPS.

A 10% improvement in a company’s customer experience score can translate into more than $1 billion in increased revenue. — Forrester

In a Bain podcast, Chief Customer Experience Officer, Charlie Herrin, said that when he joined Comcast, his first step was to focus the company on NPS:

“I wanted a customer measure that we could incorporate into our business thinking. Just as we make business decisions from a revenue and profit and product perspective, I wanted a customer measure to be part of that discussion. So that was goal one. Number 2 is improvement against that metric and others. And the third was…what can we take out of our business that is costing us money, causing customer’s frustration, and it’s just not productive.”

– Charlie Herrin, Chief Customer Experience Officer, Comcast

NPS can quantify how your customers feel at a particular moment in time, but it doesn’t reveal what made them feel that way, how to change the way they feel, or how to prevent them from feeling that way in the future. 

It’s impossible to know which actions you should take to address a weak or declining score without first understanding the factors driving NPS, nor is it possible to decide whether to prioritize small incremental changes or introduce sweeping company-wide measures.

How can you overcome these challenges? Let’s jump right in and explore 7 strategies that leading CX teams are using today to improve NPS.

1. Establish a Baseline

The first step to improve NPS is to determine your starting point. If you’re not already measuring NPS, a variety of tools are available. These range from survey tools like SurveyMonkey to purpose-built NPS platforms like Promoter.io and enterprise customer feedback management platforms like Medallia, Qualtrics, and Clarabridge.

2. Analyze NPS within a Journey-based Context

“An understanding of customer feedback doesn’t tell you all you need to know about your customers’ experiences. To get the full picture, you also need to understand actual customer behavior. Customer journey analytics is an approach to insights and measurement that examines customers’ behavior not just at individual touchpoints, but along the paths they take as they attempt to accomplish their goals and tasks.”

– Kerry Bodine, author of Outside In

You need to know where NPS is being measured within the context of each customer’s end-to-end customer journey to truly understand its root cause. Use customer journey analytics to analyze NPS across millions of actual customer journeys spanning numerous touchpoints, channels, and time periods.  What About tNPS?

If you’ve already implemented Transactional NPS (tNPS), you may think you already have this covered. Transactional NPS is a specific form of NPS. It’s meant to determine the customer’s opinion on a certain business transaction, such as placing an order online. While NPS simply asks a customer how likely they are to recommend your business, tNPS asks them to rate your company based on their most recent purchase or order.

Transactional NPS provides feedback based on a specific transaction but doesn’t address more complex customer journeys. It doesn’t help you understand, for example, the impact of an interaction further back in time. Nor does it predict the effect of customer behavior variations across multiple channels and segments.

3. Discover the Journeys that are Driving Net Promoters and Net Detractors

Use customer journey analytics to uncover the journeys that lead to Promoters (and those that lead to Detractors), so you can pinpoint their root causes.

4. Link NPS with Operational Data

Voice of the Customer programs (VoC) yield far more significant insights when their data is combined with operational data residing in CRM, POS, billing, fulfillment, and other internal systems. Analyzing responses with these variables at hand gives insights into the “why” behind the interaction and can inform approaches to improvement.

5. Calculate the ROI of Your Initiatives to Improve NPS

To put VoC initiatives on a level footing with other business programs, it isn’t enough to simply provide the soft benefits. You need the quantitative ROI to make a strong business case and obtain approval for continued investment.

6. Automate Proactive Cross-Channel Customer Engagement for High-Impact Journeys 

Because customers’ preferences can vary greatly, sending important communications through a single channel will often fail. Instead, CX leaders launch proactive outreach programs through multiple channels to successfully reach the customer promptly.

7. Democratize Access to NPS data

Once you can identify journeys that have a high potential impact on NPS, especially for negative experiences, you’ll want to proactively communicate with customers in key moments to prevent the issue(s) or minimize the damage.   

This unedited article was first published on www.pointillist.com

Four Trends That Will Influence Insurance in 2021

Events that transpired this year have pushed insurers to further embrace digital tools and challenged the industry to better understand customers’ needs, according to TransUnion.

“COVID-19 pushed the need for nascent, innovative digital solutions and services to the forefront of standard insurance industry operation. The unpredictable environment that lies ahead indicates consumers and businesses will increasingly rely on and choose insurers offering online resources and tools that can best meet their needs, particularly as digital adoption continues to grow,” Mark McElroy, executive vice president and head of TransUnion’s insurance business, said in a release.

To give insurers a better vantage point for what 2021 has in store, PropertyCasualty360.com connected with McElroy to gain some exclusive insights from TransUnion’s recent consumer survey and the trends to expect in the coming year.

1. COVID’S hit on profitability

Rising unemployment and varying financial impacts from the pandemic will put a check on consumer confidence and spending, TransUnion predicted. For the coming three months, 44% of consumers said that being able to pay their auto insurance bill was a primary concern, followed by car payments, mortgages, and life insurance bills. This will make identifying customers facing hardship, and engaging with them, critical.

With consumers feeling financial strains, anticipate interest in discount-oriented solutions such as usage-based insurance (UBI) to gain popularity. Commercial clients are also showing interest in telematics.

An upshot stemming from the pandemic, as hard as that is to imagine, is a stabilization in commercial vehicle insurance markets that haven’t been seen in a long time, according to McElroy.

2. Preferences turn toward personalization

For both personal and commercial line customers, understanding their individual needs and tailoring products to those desires will be vital, especially given the vast changes experienced during the past year.

“This factor bridges across a few key trends,” McElroy told PC360.com. “First and foremost, there was a significant portion of respondents that are using their vehicles less. For 2021, we are seeing a lot of consumers wanting and desiring that work-from-home experience.”

He explained this is leading to some people simply not using their car at all, which is making UBI coverages more attractive in the eyes of consumers.

Further, more interest in working from home and hybrid work setups will have an impact on commercial real estate.

“Certainly, the demand for certain types of real estate has changed and will continue to change. That is one piece that has to be on the forefront, understand the position and use of those particular buildings,” McElroy said. “Those things are going to change going forward, so it is important to understand what those changes.”

3. Digitization surges onward

As previously noted, digitization trends will become vital to meeting a slew of customer expectations for the coming year.

Further substantiating this trend are survey results around consumer preferences for digital/online interaction tools. When it comes to communications from insurers, an equal amount of consumers, 32%, said they prefer email and telephone calls, while 18% had a preference for a company’s mobile app, TransUnion reported.

“Organizations needed to focus and bring digital capability along,” McElroy said. “Look at the environmental requirements, there needs to be less one-on-one contact, and consumers are coming along the journey very quickly and demanding engagement across different mediums. Those are key aspects of remaining connected and engaged with customers that also is going to be a key part of the decision process for consumers.”

4. Extreme weather, extreme claims

During the past 12 months, 21% of survey respondents were impacted by a natural disaster, which isn’t difficult to imagine given the record-breaking number of weather-related catastrophes experienced this year. This unfortunate trend is anticipated to continue into 2021, bringing along with it an uptick in frequency and severity of natural-disaster-related claims for insurers to address, TransUnion reported.

McElroy explained there is a need for additional data to help assess these upcoming risks, but educating homeowners can also have an impact.

“Consumers can certainly look for better-protected homes and training on how to protect their homes and assets,” he said.

Article first published in www.propertycasualty360.com

Customer Expectations of the P&C Insurance Industry Are Changing. Keep Up.

The Amazon Effect has upended traditional modes of business across all industries, as customers increasingly expect personalized, on-demand service.

The property and casualty (P&C) insurance industry is no exception, with customer needs and expectations driving a digital transformation within the industry.

As companies in the P&C insurance industry strive to digitize their businesses, they must focus on implementing tools and processes that improve the customer experience. Gaining customer loyalty will be key to the survival of these companies.

What Do Customers in the P&C Insurance Industry Expect?

Today’s customers have high expectations of the brands they patronize, and a saturated market means they’re less incentivized than ever to remain loyal to a single company. Customers expect on-demand, personalized service, even from their P&C insurance providers, and companies should turn to digital tools to fulfill those expectations.

Modern customers expect quick answers to their questions at all times, whether they’re contemplating a purchase, refining their policy, or filing a claim.

Consumers expect a shorter and easier onboarding process. A full 45% of prospective customers who shop for insurance fail to convert, citing historically cumbersome, drawn-out, and inefficient processes as the reason. Once they become active customers, they expect a fast, user-friendly, and transparent claim-filing process.

Why Should Companies in the P&C Insurance Industry Care About CX?

Improving the customer experience is a tangible way to regain customer loyalty and boost your bottom line.

Loyal customers are more than consumers; they’re advocates and your promoters. When insurers double-down on providing an experience that prompts a customer to promote the company, they can realize tangible benefits. According to a 2020 auto insurance industry study from J.D Power:

“Small movements in NPS can translate to large losses of potential premium, even without taking defection risk into consideration. The stronger the customers’ feelings are about the brand, the more likely they are to talk (positive or negative), but more importantly, the more likely others will take action on their positive or negative recommendation.”

J.D. Power highlights the significant difference between positive and negative advocacy. They studied two groups of 1,000 customers, with the first group giving their auto insurers NPS scores of 8+ and increased premiums by as much as $362,142 through their positive advocacy. The second group gave their auto insurers NPS scores of less than 5, creating up to $751,464 in premium losses. Your ability to drive loyalty through better customer experiences truly makes a difference to your bottom line.

Today, P&C insurance companies need the support of loyal customers more than ever before. A recent McKinsey report suggested that the P&C industry has largely been “running in place,” with industry growth stagnating or even decreasing in some markets. Moreover, a growing number of competitors has diluted historic customer loyalty. One way insurers can combat risk and regain growth is by delivering an exceptional customer experience that wins and retains customers.

What Technology Can Help P&C Insurance Providers Improve CX?

Today’s customers are more digitally savvy than ever. They associate helpful tech tools with a better experience, leading to a more positive perception of the insurance company. To enhance the customer experience, insurers should invest in a slate of digital tools that customers want and, in many cases, expect.

Chatbots

Chatbots improve the experience for P&C insurance customers by answering easy questions more quickly. Rather than wait on hold to speak with a live agent, customers can leverage chatbots for self-service. Not only does this save time for the customer, but it also streamlines the paths toward the initial purchase, cross-selling, and improved customer service.

Automated quotes

Automated quotes improve the customer experience by expediting the sales process for customers, thus boosting an insurer’s conversion rate. Today’s customers don’t want to spend hours (or longer) speaking with agents and sifting through documentation in order to receive a quote. Since 45% of interested customers don’t convert, companies should invest in tools that simplify these early interactions and encourage the speedy, easy purchase of P&C insurance.

Automated Claims Processing

Automating the claims process improves the customer experience, one of P&C insurance customers’ largest pain points. An antiquated claims process, which can be slow and confusing, is one of the biggest detractors of a positive customer experience. Automation expedites the process and eliminates potentially frustrating interactions, which improves the customer’s perception of the company and enhances the overall customer experience.

Omnichannel Consistency

A consistent experience across all devices is critical for a positive customer experience. Today’s customers expect easy access to information, regardless of which channel or the device they’re using. According to the Bain Report, “Over the next few years, acquiring and interacting with existing customers will increasingly cut across different channels.” Insurers should prepare for this inevitability by ensuring a consistent experience on every medium—the company’s website, mobile, social media, etc.—and thus improving the experience for customers.

Telematics

Telematics improves the customer experience by offering the personalization today’s customers crave. Telematics offers “personalization at scale” by sending diagnostic data directly from a connected device to the insurer. This creates a direct line of contact between the insurer and the customer, who expects and prefers customized service. Ultimately, this type of personalized engagement allows the insurer to form a deeper (and ultimately more lucrative) relationship with the customer.

The Future of the P&C Insurance Industry Is Digital

It’s a tough time to be in the P&C insurance industry, but digital transformation represents a new opportunity for connection and growth. P&C insurance companies ensure their own longevity by investing in digital tools that improve the customer experience.

The original, unedited posting of this article was first published on www.whatfix.com

Moving Beyond CX to the Business of Experience

The structure of almost everything we do – how and what people buy, how and where they work, how they interact with others – has been upended by world events in 2020. The shift in consumer behaviors we’re seeing today is not an anomaly. They are likely to stay with us for a long time, some possibly forever. Many have been in motion for years, while even more have been accelerated by the COVID-19 pandemic.

Right now, an experience renaissance is just beginning – one that is galvanizing companies to push beyond the CX philosophy and organize the whole business around the delivery of exceptional experiences. These experiences must respond to customers’ new, often unmet and frequently changing needs and enable them to achieve their desired outcomes. This is the Business of Experience (BX).

An evolution of CX, BX is a more holistic approach that allows organizations to become customer-obsessed and reignite growth. Whereas CX was limited to the chief marketing officer’s (CMO) or chief operating officer’s (COO) purview, BX is in the board room as a CEO priority because it ties back to every aspect of a company’s operations. In fact, 77% of CEOs said their company will fundamentally change the way it engages and interacts with its customers.

BX is very much a new category of leadership that savvy CEOs and their leadership teams will embrace as we move deeper into the coming decade.

An innovative approach to expand business

In our research, we spoke to 1,550 executives (nearly a quarter of them CEOs) in 21 countries across 22 industries. We found that the organizations that embraced and reoriented around practices that we have defined as important for BX grow their profitability year-on-year by at least six times over their industry peers.

Three trends that gave rise to the Business of Experience

While attention to customer experience is not new, BX has taken on an urgent business imperative today in large part because of three major challenges plaguing CX as we know it: customer demands, sea of sameness, and flight to purpose. 

These trends have been barely discussed but are very real. The first is a legacy of 20th-century organization, the second has been happening for some time and is a sign of market maturity and the third has been very much accelerated by the pandemic.

Many organizations seem to be out of sync, too rigid, or moving at a pace that is slower than consumer change. If an organization’s experience fails to meet standards set by companies that do not directly compete with it, then they will be seen as a failure. That’s because consumer expectations have become truly liquid across different product and service categories. They no longer compare their brand experiences between two different companies in the same space. Rather, they make comparisons between their brand experience of, for example, a mobile service provider with a best-in-class airline, or even a design and tech-driven play such as Airbnb.

When executed well, CX investments have yielded good results: more customers, sales, and loyalty. Its importance is not going away, but its value proposition is stalling because many of the fundamentals of CX are now commonplace. Designers everywhere have been making increasing improvements to touchpoints for more than 25 years, and norms have been established. For example, we know how to welcome new bank customers with good onboarding routines. We’ve seen how clothes should be presented in a digital store. We commonly expect ultra-fast online check-out with minimal clicks.

As expectations have risen, simple, fast, clear, and intuitive experiences like these have become a given for customers, meaning they’re easy to copy and aren’t different enough to automatically gain you market share. As a result, it’s now harder to differentiate through customer touchpoints alone than it has been in decades.

Brands are facing intense pressure to stand for something bigger than the products and services they sell. Today, 8 in 10 consumers say purpose is at least as important to them as CX.  More than half of Gen Y and Z consumers (compared to 37% of other consumers) say they have shifted a portion of their spending away from their current service provider when a company disappointed them due to its words or actions on a social issue. 

Recognition that a brand’s vision and purpose can play a critical role in its growth is the foundation of a BX approach. Our research shows the leading 20% of companies are 2.5 times more likely than their peers to say they’re able to establish and manage a brand promise that connects directly to customer experiences. This coincides nicely with what consumers want, with nearly half of Gen Y and Z saying they prefer brands that make them feel part of something bigger and connect people around common causes or beliefs.

Becoming a BX leader starts with becoming customer-obsessed.

Beyond the CEO, every C-level executive and leader inside both front- and back-office functions needs to be invested in shifting their thinking about experience.

The customer experience is still central to a company’s success, but it is no longer enough to simply provide the products your customers want. For continued success, the entire business from bottom to top, internal and external must serve customers’ needs when, where, and how they desire, and adhere to CSR principles that align with customers’ and stakeholders’ expectations.  

This post is an edited version of the original first published on Accenture.com