Why do so many managers, investors and Boards in financial services and insurance find the process of evaluating and making wise decisions about technology investments so darn difficult? After all, they probably spend more time “living” with some form of technology than their partner or children.
I was reminded of this in three separate conversations recently with the COO of a mid-sized global insurance company, a Private Equity Operating Partners community and the Head of the UK’s Wealth Management regulator, the Financial Conduct Authority.
All three agreed that the speed of technological advancement and the resulting impact on firms’ business models is likely to be the biggest catalyst for businesses to raise professional standards, transparency and the customer experience. Nothing like the fear of losing clients, key people or being labelled increasingly “irrelevant” to your future customers, to move money rapidly towards upgrading skills and technology.
Where I observe key decision-makers get lost is the conversation meanders towards how to use the technology (the inputs, the “cool” images and so on), not the outcomes (results) it achieves.
Try answering these three questions:
- We have the correct level of accountability within the organisation to enable the technology to dramatically enhance the relationship with our target clients and their dealings with our firm (legacy systems, silos, CRM systems, internal compliance etc)
- We demonstrably have people today (or we can hire them quickly) with the skills and volition to apply the new technology effectively and efficiently to our target clients’ needs. In so doing, dramatically increasing the quality of the target clients’ outcomes (increased revenues, increased productivity, increased peace of mind) while reducing the time taken, and the risks of meeting or exceeding their expectations.
- Our target clients with minimum assistance are able to quickly grasp the degree to which they are better served and personally better supported by the new technology. Client’s good deal = (Tangible Benefits over the duration + Intangible Benefits x impact on their well-being + Supplemental Benefits) / Investment Required.
So the investors, Board and top management of a health insurance company, who is considering a $10M investment in a new “tele-health” tool for a worldwide group of executive travellers, providing “real time” access to a General Practitioner, they would want to readily see hard evidence or strong anecdotal reports from the firm’s research stating some or all of the following before committing to the investment.
- Tangible benefits: increased speed of responding to and resolving health conditions, increased productivity, reduced time procuring treatment, greater accuracy and less duplication exchanging information with the patient’s “home” doctor, reduced costs of healthcare expenses etc.
- Intangible benefit: increased peace of mind for the executive and his/her next of kin, increased reassurance about the quality and accuracy of the healthcare advice, less stress and so on.
- Supplemental Benefits: improved image for the employer, more fulfilled executives willing to travel to remote and hazardous locations, repeat business (new user groups within the same client or in different geographies demanding the same tool), unsolicited and solicited referrals to their peers with similar needs and so on.
If you cannot unequivocally state you are “highly” confident to each of the above questions, you have ground to cover before signing off on any proposed investment in new technology.
Technology is a tremendous boon in enhancing the customer experience in a regulated world (stopping fraud, speed of making electronic payments, accessing real time valuations) but in equal measure it can erode customer loyalty at lightning speed (automated telephone banking systems, overzealous ATM fraud protection protocol etc.).
Think about the client experience you want to see, feel and hear. Understand the impact the new technology has in enhancing the relationship and your dealings with your target clients . Never allow technology to replace the relationship with the client.
© James Berkeley 2014. All Rights Reserved.