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BUSINESSINTELLIGENCEDRIVER FORBUSINESSTRANSFORMATIONIN INSURANCE INDUSTRY

Authors Name: Sunitha Chavaly & Satish Vemuri

BUSINESSINTELLIGENCEDRIVERFORBUSINESSTRANSFORMATIONIN INSURANCEINDUSTRY

TABLEOFCONTENTS
WHYBI?....................................................................................... ..........3 BUSINESSCASEFORENTERPRISEWIDEDATAWAREHOUSING ANDBUSINESSANALYTICSPROGRAMS..................................................4 ROADMAPFORASUCCESSFULBIPROGRAM.......................................6 ADOPTTHEINCREMENTALANDITERATIVE(2I)APPROACH FORBIPROGRAMS.6 VALIDKPIASTHEFRAMEWORKFORBISTRATEGY7 DATAGOVERNANCE8 DATAMUSTBEGOVERNEDASTOSOURCE,QUALITY,AND SPEEDOFAVAILABILITY .......................................................8 INTELLIGENCEFIRST,QUALITYLATER........................................10 MAJORISSUESREPORTED,IRRESPECTIVEOFDATAQUALITY MANAGEMENT...........................................................................10 ROIANDOWNERSHIPAREKEYCHALLENGES.............................10 FLEXIBLE,ADAPTIVEBIARCHITECTURE...............................10 BUSTINGTHEIFWEBUILDIT,THEYWILLCOMEMYTH..10 APPENDIX.................................................................................... ..........12 ABOUTWIPROTECHNOLOGIESANDWCIR.13

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BUSINESSINTELLIGENCEDRIVERFORBUSINESSTRANSFORMATIONIN INSURANCEINDUSTRY

WhyBI?
Therearepainterswhotransformthesuntoayellowspot,butthereareotherswhowiththehelpof theirartandtheirintelligencetransformayellowspotintothesunPabloPicasso Thecubistpainterwasrightonthemoneywhenhesaidthatwithintelligenceandartonecould transformapedestrianyellowspotintoastunningrenderingofthesun. ThisringsverytruefortheinsuranceindustrywherethebrickandmortarPolicyandClaims Administrationsystemsareinplaceforalltheinsurancecompanies.Whatsetsthetrulyinnovativeand efficientcompaniesapartisthewaytheyputtheunderlyingtransactiondatatouse.Efficientand imaginativeuseofthedatagivesremarkableinsightsintothewaythecompanyconductsbusinessand alsoprovidesforesightonhowthefuturecanbeorhowbusinessshouldbeconductedinthefuture.

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BUSINESSINTELLIGENCEDRIVERFORBUSINESSTRANSFORMATIONIN INSURANCEINDUSTRY

BUSINESSCASEFORENTERPRISEWIDEDATAWAREHOUSINGAND BUSINESSANALYTICSPROGRAMS
Intheseturbulenttimes,wherethecompetitionisveryintense,insurancecompaniesaretryingevery trickinthebookforgarneringnewbusinessaswellasforcustomerretention. Thefollowingaresomemajorchallengestheinsurancecompaniesarefacingtoday: Constant innovation on the product and features front to stay in the game the insurance companies need to launch new products, introduce new features in existing products at a very fastpace Very little timetomarket Ideate, Design and Deploy new products/new features to existing productswithinashorttimespan Broadenthesalesscopeagents,callcenter,internet,mobileapplications Managerisks Respondquicklytoeverychangingregulatorypolicy

Toquicklyandmoreimportantly,correctly,makedecisionsregardingaproduct/anewsaleschannel, historicandextrapolateddataarerequired.ThisinformationisprovidedbythecompanysData Warehouse/BusinessAnalyticsgroup. Leadingorganizationsareincreasinglyturningtobusinessanalyticsasakeymeansofsurvival.Business analyticssolutionsarebeingusedbyinsurerstoreducethetimerequiredtoreacttocompetitive pressure,torespondefficientlytomarketchanges,toincreaseeffectivenessofbusinessmanagersin improvingfinancialresultsanddrivingvaluefortheorganization,tomoreeffectivelymanagethemany riskstheenterprisefaces,andtoimprovetheprecision&efficiencyofoperationaldecisions. BusinessintelligenceisanInformationTechnologyplatformthatincludesperformancemonitoring, performancemanagementandperformanceenhancementtoolsandapplications,aswellasdata warehousetechnology. AccordingtoIDC,businessintelligencesuiteisusedtoaccess,transform,store,analyze,model,deliver andtrackinformationtoenablefactbaseddecisionmakingandextendaccountabilitybyprovidingall decisionmakerswiththerightinformation,attherighttime,usingtherighttechnology. Datamining,datavisualization,forecasting,optimizationandotheranalyticcapabilitiesraisethe businessvalueofthekindofquestionsyoucananswer,saysT.K.George,worldwideBIproduct marketingmanageratSAS.Ahistoricalreport,whileuseful,isnotasvaluableasfindingout,Whatsthe bestthingthatcanhappenifImakethisproductlinedecision?Anexecutiveusingsophisticated forecastingtechniquecanoutcompeteanexecutivewhoreliesonasimplerollingaverage.With analytics,youbegintoseeliftsandchangesthatimpactyourstrategy,youmayrecognizenewniche markets,oryoumaystartnegotiatingcontractswithvendorsaheadoftimebasedonyourforecastof peakproductivity.Predictiveanalyticscanimproveyourabilitytocompeteandinnovate.

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BUSINESSINTELLIGENCEDRIVERFORBUSINESSTRANSFORMATIONIN INSURANCEINDUSTRY
Figure1showcasestheimportanceofastrongBIprogram.

Figure1:SignificanceofaBIProgram Theabovechart(adaptedfromSASWhitePaperResourceHandler)illustratesthefactthatasthedepth andqualityofbusinessintelligenceincreasessodoestheadvantagebusinessusersget. Letuslookatsomeofthecategoriesofbusinessintelligence: Scheduled Reports These reports are generated at regular intervals and provide the asis informationtobusiness.ThesetypicallyanswerthequestionWhathappened? Ad hoc/User Query Tools With the help of the available BI tools, business can query the underlyingdataandmakedecisions.ThesetypicallyanswerthequestionWhydidithappen? Dashboards These are BI solutions where analysis and reporting tools are used to provide feedback on the achievement of KPIs. They are also used to do ad hoc reporting to improve organizations ability to make correct decisions. Dashboards can be prepared on claim reporting and settlement time, sales service support teams response times, etc. These typicallyanswer the questionAsacompany,howareweperforming? Trend Analysis Reports These business analytics solutions involve data mining to determine the historic behavior of a group, or the performance of a grouping of people, risks or transaction types.Trendanalysisreportscanbepreparedonsegmentofcustomersbyrisk,typesofclaimsby occurrence,etc. Forecasting This BI solution allows an insurer to attempt to figure out what will happen in the future based on evaluation of current and historic data. This typically answers the question Whatisgoingtohappennext?

Toputthissuccinctly,letuslookatthesurveyGartnerhasconducted.Gartnersurveyed1,500CIOsand theresultsshowthatdespitepredictedflatITbudgetgrowthin2009,BIprojectsremaintheirnumber onetechnologypriority.

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BUSINESSINTELLIGENCEDRIVERFORBUSINESSTRANSFORMATIONIN INSURANCEINDUSTRY

ROADMAPFORASUCCESSFULBIPROGRAM
FiveBestPracticesThatCanCreateanAdaptive,AgileandRobustBIPlatform Adopttheincrementalanditerative(2I)ApproachforBIprograms
ThecommonconceptionisthatBIprojectsarebehemothsandwouldalwaysrunabovebudgetand behindschedule.Andthatwhentheprogramgoeslivetherequirementsofuserswouldhavelong changed.
Figure 2: Intelligence Enterprise Survey 2008

TheabovesurveyresultspointtothefactthatmorethanhalfoftheBIprojectsdidnotmeetthe aspirationsofthebusiness. The2IapproachtoBIprojectscanbesummarizedasfollows: Gettogetherwithbusinessandprioritizeuserrequirements Divide the development of requirements into small development cycles of 1 to 4 weeks and showcasetheendresultstobusinessandgettheirbuyin IterativelyincrementthescopeoftheBIplatform Donotputmucheffortinupfrontdetailedarchitecture,modelingandrequirementcapture

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BUSINESSINTELLIGENCEDRIVERFORBUSINESSTRANSFORMATIONIN INSURANCEINDUSTRY
Figure3showshowthe2Iapproachworks.

Figure 3: 2I Approach

ValidKPIastheframeworkforBIstrategy
KeyPerformanceIndicators(KPIs)aredefinedasthemeasureswhichindicatethehealthofthebusiness. Foraninsurancecompany,thefollowingcouldbeconsideredasKPIs: Customerretention Processimprovement Garneringnewbusiness Timetomarketnewproducts Riskmanagement

KPIsandtheirdefinitionneedtobespecifictoeverycompanyanditscorrespondingbusinessneeds.Itis imperativethattherightperformanceindicatorsbedefinedandmeasured. KPIsplayamajorroleinhighlightingtheinterconnectivitybetweenbusinessactivities,performanceand financialgrowth.Anorganizationwouldrequireanywherebetween2to6KPIs.

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BUSINESSINTELLIGENCEDRIVERFORBUSINESSTRANSFORMATIONIN INSURANCEINDUSTRY

Figure 4: Establishing Robust KPIs

TheaptormostsuitableKPIsfortheentireorganizationcanbeidentifiedinthefollowingmanner: Understand the KPIs at various levels business unit, business departments and organization wide AlowerlevelKPImustfeedorrollintotheKPIsofalevelaboveit EachlevelofKPIsmustmergeintotheorganizationalKPI

KPIsarethemostcriticalpartoftheBIstrategy.KPIshelpanorganizationtouseBIforbetterbusiness performance.

Datagovernance
Datamustbegovernedastosource,quality,andspeedofavailability

Datagovernanceencapsulatesthedataquality,datamanagement,businessprocessmanagementand riskmanagementsurroundingthehandlingofdatainanorganization. Thefollowingarethekeyfeaturesofdatagovernance: Keydataassetsaremanagedthroughouttheorganization Ensures that data and the information based on the data can be trusted to make strategic decisions Appointingsuitablepeopletofixandpreventissueswithdata Avoidingregulatoryissuesbecauseoflowqualitydataorforreportinginconsistentdata

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BUSI INESSINTE ELLIGENCEDRIVERFOR F BUSINESSTRANS SFORMATIONIN INSU URANCEIN NDUSTRY


Improvingdataquality

DataQualityinBusinessIntelligence:Sur rveyResultsSourced S fromDataqualitypr ro.com Note Thissu urveywascom mpletedby203respondentsfrom f the3rdofApril2009to othe12thofApril2009. HereDQstandsfor rDataQuality.

e 5: Data Quali ity in Business s Intelligence: Survey Result ts Figure

Thissu urveywascom mpletedby203respondentsso s theresultsneed n tobeasse essedinthisco ontext.

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WIPROTECHNOL LOGIES

BUSINESSINTELLIGENCEDRIVERFORBUSINESSTRANSFORMATIONIN INSURANCEINDUSTRY
Thefollowingaretrendsthatemergefromtheabovesurvey(Thesetrendshavealsobeensourcedfrom dataqualitypro.com): Intelligencefirst,QualitylaterOfthe31%whohavenodataqualityprocessintheirbusiness intelligencecapability,only9%hadplanstoimplementonewithin3months.Thiswouldappearcounter intuitivewhylaunchadecisionmakingcapabilityfirstandthenensurethequalityofthedecisions afterwards? MajorIssuesReported,IrrespectiveofDataQualityManagement50%ofrespondentscitedthefact thattheirorganizationshavemajordataqualityissuesintheirbusinessintelligencesolution.Thisis worryingasitimpliesthatalthough69%oforganizationsarecreatingadataqualitycapabilitywithintheir businessintelligenceservice,majorissuesarestillgettingthrough. Whereorganizationshaveadataqualitycapabilityitwasfoundthat44%ofrespondentswerestill witnessingmajorissuescausedbydataqualitydefects.Clearly,theseorganizationsarestrugglingto eliminateproblemsfurtherupstreamintheinformationchains,andiftheyarecausingissuesinthe businessintelligencelayeronecanbedoublysurethattheyarecausingissueselsewhere. ROIandownershiparekeychallengesLookingthroughthecommentsreceived,itisapparentthereare somecommonthemes.Creatingabusinesscasetoobtainfundsappearsseveraltimesasdoesfindingthe rightsponsorandstewardstoeliminatepoliticalstruggles.

Flexible,adaptiveBIArchitecture
ThefollowingaresomeofthekeyfeaturesofaflexibleandhighlyadaptiveBIarchitecture: High quality data Data presented to the business should be consistent and holistic. Users from variousgroupsshouldnotenduparguingregardingwhosedata/numbersare correct. Right from the analyst to the CEO everyone should get the same numbers when queryingametric. Datawhichispresentedtobusinessshouldbecorrect,completeandcurrent. Data sources should be accurately identified. Business and IT should work hand in hand to arrive atthemostsuitabledatasources. Data storage and maintenance IT group should establish processes, checks and balances for datastorageandmaintenance. Selection of suitable ETL (Extract Transform Load) Tools Depending on the organizations requirementETLtoolsshouldbechosen.

BustingtheIfwebuildit,theywillcomemyth
OfalltheITprojects,BIisthemostbusinesssponsorshipdependant.BIprojectsshouldverykeenly understanduserrequirements.ITandbusinessshoulddelveintothebusinesscaseforwhytheywantBI andalignthebusinessproblemswithBI.Veryoften,entireBIsystemsarebuiltfortheuppern management.ButthisdefeatsthepurposeofBIasawhole.BIshouldbemadeappealingtoalmostallthe users.

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BUSINESSINTELLIGENCEDRIVERFORBUSINESSTRANSFORMATIONIN INSURANCEINDUSTRY
TobesuccessfulwithBI,youneedtobethinkingaboutdeployingitto100%ofyouremployeesaswell asbeyondorganizationalboundariestocustomersandsuppliersCindiHowson(SourceSuccessful BusinessIntelligence) Onclosingthispaper,wewouldliketoreiteratethatBIprojectsshouldbeaboutgaininginsightintothe organizationandnotaboutprovidingdata.Oncethisgoalisachieved,theBIplatformwillsurelybeonthe highroadtosuccess.

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BUSINESSINTELLIGENCEDRIVERFORBUSINESSTRANSFORMATIONIN INSURANCEINDUSTRY

APPENDIX
References
http://en.wikipedia.org Successful Business Intelligence by Cindi Howson http://www.dataqualitypro.com/ http://www.sas.com/ (white paper Resource Handler) http://www.idc.com/

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ABOUTWIPROTECHNOLOGIES
WiproisthefirstPCMMLevel5andSEICMMiLevel5certifiedITServicesCompanyglobally.Wiproprovides comprehensiveITsolutionsandservices(includingsystemsintegration,ISoutsourcing,packageimplementation, softwareapplicationdevelopmentandmaintenance)andResearch&Developmentservices(hardwareandsoftware design,developmentandimplementation)tocorporationsglobally. Wipro'suniquevaluepropositionisfurtherdeliveredthroughourpioneeringOffshoreOutsourcingModelandstringent QualityProcessesofSEIandSixSigma.

ABOUTWIPROCOUNCILFORINDUSTRYRESEARCH
TheWiproCouncilforIndustryResearchcomprisingofdomainandtechnologyexpertsfromtheorganizationaimsto addresstheneedsofcustomersbyspecificallylookingatinnovativestrategiesthatwillhelpthemgaincompetitive advantageinthemarket.TheCouncilincollaborationwithleadingacademicinstitutionsandindustrybodiesstudies markettrendstoequiporganizationswithinsightsthatfacilitatetheirITandbusinessstrategies Formoreinformationpleasevisitwww.wipro.com/industryresearch

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