Unleashing value in the finance unit: technological tools will enable the financial unit of an insurance company to provide more specific data more quickly and at a lower cost. (Technology).

Today's competitive environment necessitates that the finance unit, in addition to performing its traditional record-keeping role, expand its services and become a strategic business partner to its internal customers--the key profit centers. To do so, it must be viewed as the provider of useful information that is delivered more quickly, more accurately and with valuable insight. Through the creative use of technology tools, leading insurers are beginning to fulfill that mission.

Improving productivity. Technology, improved work flow and better data capture and reporting can help reduce transaction processing costs. One insurance company, for example, is developing an intranet-based portal to improve collaboration between the finance department and its internal customers by streamlining information sharing and providing enhanced services to these customers.

More than just a repository for financial and management reports, the portal will be an interactive self-service hub, where internal customers can access analytical tools and applications, approve invoices and expenses for payment, submit travel and entertainment reports for reimbursement and even purchase office supplies online. As a result, standard paper forms, manual reviews and approvals are automated. Self-service will enable the business units to quickly get the answers they need without burdening the finance department with data requests. The financial portal and related work-flow changes are expected to reduce the financial closing cycle by 10 to 15 business days and reduce process-related costs by as much as 30%.

Reducing costs. A problem for another leading insurance provider was that the process of having several disconnected business units generating internal financial data was costly, time-consuming and too slow to provide strategically useful information. The solution was to migrate these various financial-services pockets into a single service center. With the same suite of shared technology tools in hand, the center could provide a uniform and consistent work product. Standardizing the accounting systems, along with technology-enabled process improvements, resulted in a more than 20% expense reduction for the carrier. Implementing shared services also offers insurers a unique opportunity to upgrade their entire financial tool set to a state-of-the-art enterprise resource-planning system that includes reporting, analytic and Web-based self-service capabilities.

Some carriers are considering outsourcing various finance functions to reduce costs and to focus their in-house talent on higher-value tasks. Outsourcing gives carriers access to seasoned finance and accounting professionals on a long-term basis and enables them to improve service and accounting processes. Advances in telecommunications, the evolution of Internet technologies and the maturing of the outsourcing industry all make outsourcing a more viable option than in the past.

Monitoring shareholder value. The finance department must provide the early detection and warning system to aggressively track financial results. Leading-edge planning tools enable the department to improve earnings predictability by providing more reliable forecasting data through a continuous planning cycle that is highly collaborative, business driver-based and integrated with actual results. For example, the finance unit could alert management when unexpectedly higher costs threaten the company's ability to achieve its operating income targets. This early warning would enable management to better manage Wall Street's expectations or, better yet, adjust spending levels.

Enhancing strategic value. Enhanced reporting and analytical capabilities can help the finance department strengthen its strategic value to the organization. For example, multidimensional profitability- and performance-management tools enable managers to evaluate performance based on product, channel, customer and region. The traditional "push" approach, in which the financial organization generates and mass distributes hard-copy reports organized around the carrier's various lines of business, is being replaced. By using advanced data-management tools, a product manager now can "pull" out the specific information needed for analysis and reporting as soon as the data is available.

To transform itself into a strategic player, the finance unit must liberate its talent from laborious closing-cycle activities and reallocate that talent to engage its internal customers in interpreting and forecasting results, evaluating growth opportunities, assessing merger candidates and other high-value activities. The right combination of organizational, technological and process improvements can make that a reality.

John L Connor, left, is a partner and Gerald R. Roop is an associate partner in Accenture's Insurance Industry Group. They can be reached at [e-mail].