Transformation is as a result of moving from one state to another. We make use of innovation and transformation in a synonymous manner. Both words evoke thoughts of change and modernization. Both innovation and transformation are important outcomes of the change management life cycle. We know that innovation is occurring all around us, and in simple terms, it is finding new ways to improve or change something that already exists for the better.
Do we use innovate or transform? or both?
The best way to answer is to explore the differences between innovation and transformation in insurance and breakdown each into definitions and examples. Then you can determine where your company is in the change management life cycle and what will work best for your organization.
Innovation
Innovation is defined as rethinking, re-imagining, and reinventing the business of insurance. We have seen the results of innovation in business models, customer relationships, new products and services, and how investments in technology are made. A perfect example of innovation is the focused improvements of customer experience.
Once, customers had to push paper and phones calls back and forth between agents, but innovation has made these types of interactions a distant memory. Today, chat, apps, portals, mobile, and others have started to create an innovated customer experience. It is different and (arguably) better. Similarly, in the data analytics arena, innovation in the ways we use and apply data has changed the way insurers operate, price policies, handle claims, and compete in the market.
Innovation makes something that once seemed impossible possible. It is rethinking the way of doing things, questioning the possibilities, and turning them into action.
Transformation
Transformation is the evolution from a current level to a different and better state. SMA describes it as modernizing and optimizing. Transformations produce an improved state of things, but we can also measure the journey as an outcome of the process. The journey of transformation is the tangible process, structure, or building block for future success even if a project fails or takes a different shape.
Transformation can be seen in core system replacements, during which existing and necessary underwriting, billing, and claims capabilities are shifted and moved into a better state through improved technology and processes. Transformations are evolutionary and occur over a period of time.
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