Connect the Dots to Integration.Regardless of an insurer's specific capabilities or business strategy, there is a select set of integration success factors. Remember connect-the-dots drawings? Move your pencil from dot to dot, and soon a picture emerges--or at least it was supposed to. Over the last several years, insurers have had a renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. focus on connecting the dots and integrating components of the internal value chain. Increasingly, the integration of technology, process and organization must be more outward-looking to increase the level of integration with third parties. Insurers can tap several emerging forces to more fully integrate their internal value chains and external value networks. (See chart below) The situation is clear: Insurers achieving internal and third-party integration will have measurably meas·ur·a·ble adj. 1. Possible to be measured: measurable depths. 2. Of distinguished importance; significant: a measurable figure in literature. improved strategic flexibility and operating adaptability a·dapt·a·ble adj. Capable of adapting or of being adapted. a·dapt  a·bil . But achieving and sustaining this level of
integration is no small task. The accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. history--or legacy--of insurers often creates a unique set of organizational-specific integration challenges. Analysis of successful and failed integration efforts reveals several factors and implications (see chart at right). Clearly, the implementation plan must be tailored to each insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual. An insurer is frequently an insurance company and is also known as an underwriter. in the context of legacy factors and the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. strategic vision. But an analysis of insurers that have successfully improved internal and external integration revealed three common success factors: * Integration Strategy and Vision: Develop a strategy and integration vision with the appropriate level of detail. Organizations developing and communicating an unambiguous vision drove specific actions and accountability across the organization. This supported improved levels of business and IT communication and led to improved outcomes. * Value Analysis: Identify and quantify Quantify - A performance analysis tool from Pure Software. the value of integration and identify assumptions and dependencies. Identification of the value potential and capability requirements was a key factor in securing and sustaining organizational commitment In the study of organizational behavior and Industrial/Organizational Psychology, organizational commitment is, in a general sense, the employee's psychological attachment to the organization. . This enabled value-driven resource allocation resource allocation Managed care The constellation of activities and decisions which form the basis for prioritizing health care needs and prioritization that supported fact-based, timely decision making. * Implementation Plan: Develop a long-term, phased plan considering the current integration reality and long-term aspirations aspirations npl → aspiraciones fpl (= ambition); ambición f aspirations npl (= hopes, ambition) → aspirations fpl . This served as a reality-based plan to guide long-term integration efforts as the insurers made incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. , short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments. These factors may seem to be common sense. But given the inconsistent Reciprocally contradictory or repugnant. Things are said to be inconsistent when they are contrary to each other to the extent that one implies the negation of the other. results insurers achieve from integration, they may need to return to fundamentals-and connect the dots to an identifiable, profitable picture. William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack Pieroni is general manager of IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) Global Insurance, White Plains, N.Y.
Selected Forces Integration Imperatives
* Distribution/sourcing * Create infrastructure to
alliances to create support cost-effective and
unique, sustainable timely leverage of strategic
value propositions. sourcing alternatives.
* Customer/producer * Ensure seamless
management in achieving information flow to develop
and sustaining profitable insight, identify strategic
relationships. implications and deliver
differentiated value
propositions.
* Informational scale and * Develop moment-of-value
scope economies around data information-sharing
aggregation and analysis capabilities to
enabled by integration. support aggregation
and analysis for insight
and competitive advantage.
* Shift in focus from * Leverage value-chain
cost reduction to integration to achieve and
customer lifetime value. sustain superior expense
and revenue results through
lifetime value analytics.
* E-business pervasiveness * Seek integration
and its long-term opportunities to leverage
influence on industry e-business as part of an
structure and future integrated, long-term business
business and technology. and technology strategy.
Legacy Factors Attributes Implications
Organization * Skill sets Business and IT skill
* Structure, development and
incentives, level of structural, incentive
accountability and cultural align-
* Culture, values, ment to support inte-
work norms gration imperatives
Information * Data Legacy IT capabili-
Technology * Applications, archi- ties reconfigured as
tecture part of multiphase
* Hardware, network integration plan
infrastructure
* IT-business
relationship
Customers * Demographic pro- Current/potential
file distribution customer character-
* Current/potential istics considered
customer lifetime when developing
value integration plans
* Perception/brand
Distribution * Distribution Producer characteris-
Strategy strategy tics reflected in inte-
* Producer-insurer gration vision and
relationship plan as they can
* Geographic materially impact the
coverage achievable integration
Products and * Focus, share, Product/service
Services market perception strategies, historical
* Mix of revenue/ results and future
profit across product aspirations examined
portfolio, geography to identify relevant
* Support of legacy integration factors
products
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