Driver for Business Transformation in - Wipro
Driver for Business Transformation in - Wipro
Driver for Business Transformation in - Wipro
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BUSINESS INTELLIGENCE ‐ DRIVER<br />
FOR BUSINESS TRANSFORMATION IN<br />
INSURANCE INDUSTRY<br />
Author’s Name: Sunitha Chavaly & Satish Vemuri
BUSINESS INTELLIGENCE‐ DRIVER FOR BUSINESS TRANSFORMATION IN<br />
INSURANCE INDUSTRY<br />
2 | www.wipro.com/<strong>in</strong>dustryresearch<br />
TABLE OF CONTENTS<br />
WHY BI? ....................................................................................... ..........3<br />
BUSINESS CASE FOR ENTERPRISE WIDE DATA WAREHOUSING<br />
AND BUSINESS ANALYTICS PROGRAMS..................................................4<br />
ROAD MAP FOR A SUCCESSFUL BI PROGRAM ............................. ..........6<br />
ADOPT THE INCREMENTAL AND ITERATIVE (2I) APPROACH<br />
FOR BI PROGRAMS………………………………………………………………….6<br />
VALID KPI AS THE FRAMEWORK FOR BI STRATEGY……………………7<br />
DATA GOVERNANCE…………………………………………………………………8<br />
DATA MUST BE GOVERNED AS TO SOURCE, QUALITY, AND<br />
SPEED OF AVAILABILITY ..................................................... ………..8<br />
INTELLIGENCE FIRST, QUALITY LATER........................................10<br />
MAJOR ISSUES REPORTED, IRRESPECTIVE OF DATA QUALITY<br />
MANAGEMENT...........................................................................10<br />
ROI AND OWNERSHIP ARE KEY CHALLENGES.............................10<br />
FLEXIBLE, ADAPTIVE BI ARCHITECTURE ............................. ………..10<br />
BUSTING THE ‘IF WE BUILD IT, THEY WILL COME’ MYTH .. …………10<br />
APPENDIX .................................................................................... ..........12<br />
ABOUT WIPRO TECHNOLOGIES AND WCIR………………………………………….13<br />
WIPRO TECHNOLOGIES
BUSINESS INTELLIGENCE‐ DRIVER FOR BUSINESS TRANSFORMATION IN<br />
INSURANCE INDUSTRY<br />
Why BI?<br />
“There are pa<strong>in</strong>ters who trans<strong>for</strong>m the sun to a yellow spot, but there are others who with the help of<br />
their art and their <strong>in</strong>telligence trans<strong>for</strong>m a yellow spot <strong>in</strong>to the sun “‐ Pablo Picasso<br />
The cubist pa<strong>in</strong>ter was right on the money when he said that with <strong>in</strong>telligence and art one could<br />
trans<strong>for</strong>m a pedestrian yellow spot <strong>in</strong>to a stunn<strong>in</strong>g render<strong>in</strong>g of the sun.<br />
This r<strong>in</strong>gs very true <strong>for</strong> the <strong>in</strong>surance <strong>in</strong>dustry where the ‘brick and mortar’ Policy and Claims<br />
Adm<strong>in</strong>istration systems are <strong>in</strong> place <strong>for</strong> all the <strong>in</strong>surance companies. What sets the truly <strong>in</strong>novative and<br />
efficient companies apart is the way they put the underly<strong>in</strong>g transaction data to use. Efficient and<br />
imag<strong>in</strong>ative use of the data gives remarkable <strong>in</strong>sights <strong>in</strong>to the way the company conducts bus<strong>in</strong>ess and<br />
also provides <strong>for</strong>esight on how the future can be or how bus<strong>in</strong>ess should be conducted <strong>in</strong> the future.<br />
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WIPRO TECHNOLOGIES
BUSINESS INTELLIGENCE‐ DRIVER FOR BUSINESS TRANSFORMATION IN<br />
INSURANCE INDUSTRY<br />
BUSINESS CASE FOR ENTERPRISE WIDE DATA WAREHOUSING AND<br />
BUSINESS ANALYTICS PROGRAMS<br />
In these turbulent times, where the competition is very <strong>in</strong>tense, <strong>in</strong>surance companies are try<strong>in</strong>g every<br />
trick <strong>in</strong> the book <strong>for</strong> garner<strong>in</strong>g new bus<strong>in</strong>ess as well as <strong>for</strong> customer retention.<br />
The follow<strong>in</strong>g are some major challenges the <strong>in</strong>surance companies are fac<strong>in</strong>g today:<br />
Constant <strong>in</strong>novation on the product and features front – to stay <strong>in</strong> the game the <strong>in</strong>surance<br />
companies need to launch new products, <strong>in</strong>troduce new features <strong>in</strong> exist<strong>in</strong>g products at a very<br />
fast pace<br />
Very little time‐to‐market – Ideate, Design and Deploy new products/new features to exist<strong>in</strong>g<br />
products with<strong>in</strong> a short time span<br />
Broaden the sales scope – agents, call center, <strong>in</strong>ternet, mobile applications<br />
Manage risks<br />
Respond quickly to every chang<strong>in</strong>g regulatory policy<br />
To quickly and more importantly, correctly, make decisions regard<strong>in</strong>g a product/a new sales channel,<br />
historic and extrapolated data are required. This <strong>in</strong><strong>for</strong>mation is provided by the company’s Data<br />
Warehouse/<strong>Bus<strong>in</strong>ess</strong> Analytics group.<br />
Lead<strong>in</strong>g organizations are <strong>in</strong>creas<strong>in</strong>gly turn<strong>in</strong>g to bus<strong>in</strong>ess analytics as a key means of survival. <strong>Bus<strong>in</strong>ess</strong><br />
analytics solutions are be<strong>in</strong>g used by <strong>in</strong>surers to reduce the time required to react to competitive<br />
pressure, to respond efficiently to market changes, to <strong>in</strong>crease effectiveness of bus<strong>in</strong>ess managers <strong>in</strong><br />
improv<strong>in</strong>g f<strong>in</strong>ancial results and driv<strong>in</strong>g value <strong>for</strong> the organization, to more effectively manage the many<br />
risks the enterprise faces, and to improve the precision & efficiency of operational decisions.<br />
<strong>Bus<strong>in</strong>ess</strong> <strong>in</strong>telligence is an In<strong>for</strong>mation Technology plat<strong>for</strong>m that <strong>in</strong>cludes per<strong>for</strong>mance monitor<strong>in</strong>g,<br />
per<strong>for</strong>mance management and per<strong>for</strong>mance enhancement tools and applications, as well as data<br />
warehouse technology.<br />
Accord<strong>in</strong>g to IDC, bus<strong>in</strong>ess <strong>in</strong>telligence suite is used to “access, trans<strong>for</strong>m, store, analyze, model, deliver<br />
and track <strong>in</strong><strong>for</strong>mation to enable fact‐based decision mak<strong>in</strong>g and extend accountability by provid<strong>in</strong>g all<br />
decision makers with the right <strong>in</strong><strong>for</strong>mation, at the right time, us<strong>in</strong>g the right technology.”<br />
“Data m<strong>in</strong><strong>in</strong>g, data visualization, <strong>for</strong>ecast<strong>in</strong>g, optimization and other analytic capabilities raise the<br />
bus<strong>in</strong>ess value of the k<strong>in</strong>d of questions you can answer,” says T.K. George, worldwide BI product<br />
market<strong>in</strong>g manager at SAS. “A historical report, while useful, is not as valuable as f<strong>in</strong>d<strong>in</strong>g out, ‘What’s the<br />
best th<strong>in</strong>g that can happen if I make this product‐l<strong>in</strong>e decision?’ An executive us<strong>in</strong>g sophisticated<br />
<strong>for</strong>ecast<strong>in</strong>g technique can out‐compete an executive who relies on a simple roll<strong>in</strong>g average. With<br />
analytics, you beg<strong>in</strong> to see lifts and changes that impact your strategy, you may recognize new niche<br />
markets, or you may start negotiat<strong>in</strong>g contracts with vendors ahead of time based on your <strong>for</strong>ecast of<br />
peak productivity. Predictive analytics can improve your ability to compete and <strong>in</strong>novate.”<br />
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WIPRO TECHNOLOGIES
BUSINESS INTELLIGENCE‐ DRIVER FOR BUSINESS TRANSFORMATION IN<br />
INSURANCE INDUSTRY<br />
Figure 1 showcases the importance of a strong BI program.<br />
Figure 1: Significance of a BI Program<br />
The above chart (adapted from SAS White Paper ‘Resource Handler’) illustrates the fact that as the depth<br />
and quality of bus<strong>in</strong>ess <strong>in</strong>telligence <strong>in</strong>creases so does the advantage bus<strong>in</strong>ess users get.<br />
Let us look at some of the categories of bus<strong>in</strong>ess <strong>in</strong>telligence:<br />
Scheduled Reports ‐ These reports are generated at regular <strong>in</strong>tervals and provide the as‐is<br />
<strong>in</strong><strong>for</strong>mation to bus<strong>in</strong>ess. These typically answer the question – ‘What happened?’<br />
Ad hoc/User Query Tools ‐ With the help of the available BI tools, bus<strong>in</strong>ess can query the<br />
underly<strong>in</strong>g data and make decisions. These typically answer the question – ‘Why did it happen?’<br />
Dashboards ‐ These are BI solutions where analysis and report<strong>in</strong>g tools are used to provide<br />
feedback on the achievement of KPIs. They are also used to do ad hoc report<strong>in</strong>g to improve<br />
organization’s ability to make correct decisions. Dashboards can be prepared on claim report<strong>in</strong>g<br />
and settlement time, sales service support team’s response times, etc. These typically answer the<br />
question – ‘As a company, how are we per<strong>for</strong>m<strong>in</strong>g?’<br />
Trend Analysis Reports ‐ These bus<strong>in</strong>ess analytics solutions <strong>in</strong>volve data m<strong>in</strong><strong>in</strong>g to determ<strong>in</strong>e the<br />
historic behavior of a group, or the per<strong>for</strong>mance of a group<strong>in</strong>g of people, risks or transaction<br />
types. Trend analysis reports can be prepared on segment of customers by risk, types of claims by<br />
occurrence, etc.<br />
Forecast<strong>in</strong>g ‐ This BI solution allows an <strong>in</strong>surer to attempt to figure out what will happen <strong>in</strong> the<br />
future based on evaluation of current and historic data. This typically answers the question –<br />
‘What is go<strong>in</strong>g to happen next?’<br />
To put this succ<strong>in</strong>ctly, let us look at the survey Gartner has conducted. Gartner surveyed 1,500 CIOs and<br />
the results show that despite predicted flat IT budget growth <strong>in</strong> 2009, BI projects rema<strong>in</strong> their number<br />
one technology priority.<br />
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WIPRO TECHNOLOGIES
BUSINESS INTELLIGENCE‐ DRIVER FOR BUSINESS TRANSFORMATION IN<br />
INSURANCE INDUSTRY<br />
ROAD MAP FOR A SUCCESSFUL BI PROGRAM<br />
‐ Five Best Practices That Can Create an Adaptive, Agile and Robust BI Plat<strong>for</strong>m<br />
Adopt the <strong>in</strong>cremental and iterative (2I) Approach <strong>for</strong> BI programs<br />
The common conception is that BI projects are behemoths and would always run above budget and<br />
beh<strong>in</strong>d schedule. And that when the program goes live the requirements of users would have long<br />
changed.<br />
Figure 2: Intelligence Enterprise Survey 2008<br />
The above survey results po<strong>in</strong>t to the fact that more than half of the BI projects did not meet the<br />
aspirations of the bus<strong>in</strong>ess.<br />
The 2I approach to BI projects can be summarized as follows:<br />
Get together with bus<strong>in</strong>ess and prioritize user requirements<br />
Divide the development of requirements <strong>in</strong>to small development cycles of 1 to 4 weeks and<br />
showcase the end results to bus<strong>in</strong>ess and get their buy‐<strong>in</strong><br />
Iteratively <strong>in</strong>crement the scope of the BI plat<strong>for</strong>m<br />
Do not put much ef<strong>for</strong>t <strong>in</strong> upfront detailed architecture, model<strong>in</strong>g and requirement capture<br />
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WIPRO TECHNOLOGIES
BUSINESS INTELLIGENCE‐ DRIVER FOR BUSINESS TRANSFORMATION IN<br />
INSURANCE INDUSTRY<br />
Figure 3 shows how the 2I approach works.<br />
Figure 3: 2I Approach<br />
Valid KPI as the framework <strong>for</strong> BI strategy<br />
Key Per<strong>for</strong>mance Indicators (KPIs) are def<strong>in</strong>ed as the measures which <strong>in</strong>dicate the health of the bus<strong>in</strong>ess.<br />
For an <strong>in</strong>surance company, the follow<strong>in</strong>g could be considered as KPIs:<br />
Customer retention<br />
Process improvement<br />
Garner<strong>in</strong>g new bus<strong>in</strong>ess<br />
Time to market new products<br />
Risk management<br />
KPIs and their def<strong>in</strong>ition need to be specific to every company and its correspond<strong>in</strong>g bus<strong>in</strong>ess needs. It is<br />
imperative that the right per<strong>for</strong>mance <strong>in</strong>dicators be def<strong>in</strong>ed and measured.<br />
KPIs play a major role <strong>in</strong> highlight<strong>in</strong>g the <strong>in</strong>ter connectivity between bus<strong>in</strong>ess activities, per<strong>for</strong>mance and<br />
f<strong>in</strong>ancial growth. An organization would require anywhere between 2 to 6 KPIs.<br />
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WIPRO TECHNOLOGIES
BUSINESS INTELLIGENCE‐ DRIVER FOR BUSINESS TRANSFORMATION IN<br />
INSURANCE INDUSTRY<br />
Figure 4: Establish<strong>in</strong>g Robust KPIs<br />
The apt or most suitable KPIs <strong>for</strong> the entire organization can be identified <strong>in</strong> the follow<strong>in</strong>g manner:<br />
Understand the KPIs at various levels – bus<strong>in</strong>ess unit, bus<strong>in</strong>ess departments and organization<br />
wide<br />
A lower level KPI must feed or roll <strong>in</strong>to the KPIs of a level above it<br />
Each level of KPIs must merge <strong>in</strong>to the organizational KPI<br />
KPIs are the most critical part of the BI strategy. KPIs help an organization to use BI <strong>for</strong> better bus<strong>in</strong>ess<br />
per<strong>for</strong>mance.<br />
Data governance<br />
‐ Data must be governed as to source, quality, and speed of availability<br />
Data governance encapsulates the data quality, data management, bus<strong>in</strong>ess process management and<br />
risk management surround<strong>in</strong>g the handl<strong>in</strong>g of data <strong>in</strong> an organization.<br />
The follow<strong>in</strong>g are the key features of data governance:<br />
Key data assets are managed throughout the organization<br />
Ensures that data and the <strong>in</strong><strong>for</strong>mation based on the data can be trusted to make strategic<br />
decisions<br />
Appo<strong>in</strong>t<strong>in</strong>g suitable people to fix and prevent issues with data<br />
Avoid<strong>in</strong>g regulatory issues because of low quality data or <strong>for</strong> report<strong>in</strong>g <strong>in</strong>consistent data<br />
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WIPRO TECHNOLOGIES
BUSIINESS<br />
INTE ELLIGENCE‐<br />
DRIVER FFOR<br />
BUSINESS<br />
TRANSSFORMATION<br />
IN<br />
INSUURANCE<br />
IN NDUSTRY<br />
<br />
Improv<strong>in</strong>g data<br />
quality<br />
Note ‐ Data Quality <strong>in</strong> <strong>Bus<strong>in</strong>ess</strong> Intelligence:<br />
Surrvey<br />
Results – SSourced<br />
from Dataqualityprro.com<br />
This suurvey<br />
was com mpleted by 203 respondents ffrom<br />
the 3rd of<br />
April 2009 too<br />
the 12th of April<br />
2009.<br />
Here ‘ DQ’ stands <strong>for</strong> r Data Quality.<br />
Figuree<br />
5: Data Quali ity <strong>in</strong> <strong>Bus<strong>in</strong>ess</strong>s<br />
Intelligence: Survey Resultts<br />
This suurvey<br />
was com mpleted by 203 respondents sso<br />
the results nneed<br />
to be asseessed<br />
<strong>in</strong> this coontext.<br />
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WIPRO<br />
TECHNOLOGIES
BUSINESS INTELLIGENCE‐ DRIVER FOR BUSINESS TRANSFORMATION IN<br />
INSURANCE INDUSTRY<br />
The follow<strong>in</strong>g are trends that emerge from the above survey (These trends have also been sourced from<br />
dataqualitypro.com):<br />
Intelligence first, Quality later ‐ Of the 31% who have no data quality process <strong>in</strong> their bus<strong>in</strong>ess<br />
<strong>in</strong>telligence capability, only 9% had plans to implement one with<strong>in</strong> 3 months. This would appear counter‐<br />
<strong>in</strong>tuitive ‐ why launch a decision‐mak<strong>in</strong>g capability first and then ensure the quality of the decisions<br />
afterwards?<br />
Major Issues Reported, Irrespective of Data Quality Management ‐ 50% of respondents cited the fact<br />
that their organizations have major data quality issues <strong>in</strong> their bus<strong>in</strong>ess <strong>in</strong>telligence solution. This is<br />
worry<strong>in</strong>g as it implies that although 69% of organizations are creat<strong>in</strong>g a data quality capability with<strong>in</strong> their<br />
bus<strong>in</strong>ess <strong>in</strong>telligence service, major issues are still gett<strong>in</strong>g through.<br />
Where organizations have a data quality capability it was found that 44% of respondents were still<br />
witness<strong>in</strong>g major issues caused by data quality defects. Clearly, these organizations are struggl<strong>in</strong>g to<br />
elim<strong>in</strong>ate problems further upstream <strong>in</strong> the <strong>in</strong><strong>for</strong>mation cha<strong>in</strong>s, and if they are caus<strong>in</strong>g issues <strong>in</strong> the<br />
bus<strong>in</strong>ess <strong>in</strong>telligence layer one can be doubly sure that they are caus<strong>in</strong>g issues elsewhere.<br />
ROI and ownership are key challenges ‐ Look<strong>in</strong>g through the comments received, it is apparent there are<br />
some common themes. Creat<strong>in</strong>g a bus<strong>in</strong>ess case to obta<strong>in</strong> funds appears several times as does f<strong>in</strong>d<strong>in</strong>g the<br />
right sponsor and stewards to elim<strong>in</strong>ate political struggles.<br />
Flexible, adaptive BI Architecture<br />
The follow<strong>in</strong>g are some of the key features of a flexible and highly adaptive BI architecture:<br />
High quality data –Data presented to the bus<strong>in</strong>ess should be consistent and holistic. Users from<br />
various groups should not end up argu<strong>in</strong>g regard<strong>in</strong>g whose data/numbers are<br />
correct. Right from the analyst to the CEO – everyone should get the same numbers when<br />
query<strong>in</strong>g a metric.<br />
Data which is presented to bus<strong>in</strong>ess should be correct, complete and current.<br />
Data sources should be accurately identified. <strong>Bus<strong>in</strong>ess</strong> and IT should work hand <strong>in</strong> hand to arrive<br />
at the most suitable data sources.<br />
Data storage and ma<strong>in</strong>tenance – IT group should establish processes, checks and balances <strong>for</strong><br />
data storage and ma<strong>in</strong>tenance.<br />
Selection of suitable ETL (Extract – Trans<strong>for</strong>m – Load) Tools – Depend<strong>in</strong>g on the organization’s<br />
requirement ETL tools should be chosen.<br />
Bust<strong>in</strong>g the ‘If we build it, they will come’ myth<br />
Of all the IT projects, BI is the most bus<strong>in</strong>ess sponsorship dependant. BI projects should very keenly<br />
understand user requirements. IT and bus<strong>in</strong>ess should delve <strong>in</strong>to the bus<strong>in</strong>ess case <strong>for</strong> why they want BI<br />
and align the bus<strong>in</strong>ess problems with BI. Very often, entire BI systems are built <strong>for</strong> the uppern<br />
management. But this defeats the purpose of BI as a whole. BI should be made appeal<strong>in</strong>g to almost all the<br />
users.<br />
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WIPRO TECHNOLOGIES
BUSINESS INTELLIGENCE‐ DRIVER FOR BUSINESS TRANSFORMATION IN<br />
INSURANCE INDUSTRY<br />
“To be successful with BI, you need to be th<strong>in</strong>k<strong>in</strong>g about deploy<strong>in</strong>g it to 100% of your employees as well<br />
as beyond organizational boundaries to customers and suppliers” — C<strong>in</strong>di Howson (Source ‐ Successful<br />
<strong>Bus<strong>in</strong>ess</strong> Intelligence)<br />
On clos<strong>in</strong>g this paper, we would like to reiterate that BI projects should be about ga<strong>in</strong><strong>in</strong>g <strong>in</strong>sight <strong>in</strong>to the<br />
organization and not about provid<strong>in</strong>g data. Once this goal is achieved, the BI plat<strong>for</strong>m will surely be on the<br />
high road to success.<br />
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WIPRO TECHNOLOGIES
BUSINESS INTELLIGENCE‐ DRIVER FOR BUSINESS TRANSFORMATION IN<br />
INSURANCE INDUSTRY<br />
APPENDIX<br />
References<br />
http://en.wikipedia.org<br />
Successful <strong>Bus<strong>in</strong>ess</strong> Intelligence by C<strong>in</strong>di Howson<br />
http://www.dataqualitypro.com/<br />
http://www.sas.com/ (white paper ‘Resource Handler’)<br />
http://www.idc.com/<br />
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WIPRO TECHNOLOGIES
BUSINESS INTELLIGENCE‐DRIVER FOR TRANSFORMATION IN INSURANCE INDUSTRY<br />
ABOUT WIPRO TECHNOLOGIES<br />
<strong>Wipro</strong> is the first PCMM Level 5 and SEI CMMi Level 5 certified IT Services Company globally. <strong>Wipro</strong> provides<br />
comprehensive IT solutions and services (<strong>in</strong>clud<strong>in</strong>g systems <strong>in</strong>tegration, IS outsourc<strong>in</strong>g, package implementation,<br />
software application development and ma<strong>in</strong>tenance) and Research & Development services (hardware and software<br />
design, development and implementation) to corporations globally.<br />
<strong>Wipro</strong>'s unique value proposition is further delivered through our pioneer<strong>in</strong>g Offshore Outsourc<strong>in</strong>g Model and str<strong>in</strong>gent<br />
Quality Processes of SEI and Six Sigma.<br />
ABOUT WIPRO COUNCIL FOR INDUSTRY RESEARCH<br />
The <strong>Wipro</strong> Council <strong>for</strong> Industry Research compris<strong>in</strong>g of doma<strong>in</strong> and technology experts from the organization aims to<br />
address the needs of customers by specifically look<strong>in</strong>g at <strong>in</strong>novative strategies that will help them ga<strong>in</strong> competitive<br />
advantage <strong>in</strong> the market. The Council <strong>in</strong> collaboration with lead<strong>in</strong>g academic <strong>in</strong>stitutions and <strong>in</strong>dustry bodies studies<br />
market trends to equip organizations with <strong>in</strong>sights that facilitate their IT and bus<strong>in</strong>ess strategies<br />
For more <strong>in</strong><strong>for</strong>mation please visit www.wipro.com/<strong>in</strong>dustryresearch<br />
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