Automation’s Impact on the Insurance Industry

600px-shutterstock_140576308Businesses across a variety of industries are embracing intelligent automation tools to remove manual business processes and streamline functions.

Technology like Robotic Process Automation (RPA) can perform routine and mundane tasks more quickly, more inexpensively and more accurately than human counterparts.

For insurers, RPA has the potential to simplify many back-office processes, including claims management, credentialing and invoicing. Claims administration and credentialing are very specialized functions. Unfortunately, cumbersome manual processes can have a negative downstream effect on claims processing. So there is intense pressure on internal resources to resolve credentialing issues and ensure that claims are processed as quickly as possible.

In face, just last month Everest Group reported that key drivers for RPA adoption in P&C Insurance center around operational optimization and cost reduction, both listed as +4 on a scale of 1 to 5, with 1 being low and 5 being high.

RPA Acceleration

RPA has been “the latest thing” for years now. You would think that insurance companies would have rolled out RPA programs to help reduce paperwork, rekeying of information and to drive the operational optimization and cost reductions they are looking for. Continue reading

Transform or Be Left Behind

You’ve no doubt heard the famous Tom Goodwin quote, or a riff on it:

“Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.”

It seems that every company wants to be “the Uber of X [insert industry here].” These digital disruptors are today’s cool kids, to be copied and envied.

Yet, for many enterprise-level—often highly traditional—global organizations laden with various levels of bureaucracy and clinging to entrenched operating models and processes, achieving this goal is a near impossibility.

Traditional (think insurance companies, banks, mortgage firms, etc.) businesses are placing customer experience and transformation high on their strategic agenda. However, they seem to be at a distinct disadvantage when compared to newer, highly nimble, technology-based competitors. If they fail to innovate and evolve, there is the risk of being left behind, as their market share is stolen out from underneath them. Continue reading

The F&A Experience

When you see a football player effortlessly pluck the ball out of the air, and in one single move, change the game completely, you understand that days, weeks and years of practice went into the automatic reflect behind that play. When online shopping channels make it easy to purchase (and check out) with the single click of a button, there’s no doubt that thousands of hours of design thinking and GUI coding expertise went into that seamless experience.

It takes a lot of effort to for anything to appear effortless.

The ongoing march of technology, and the intersection of multiple technologies—combined with human ingenuity—make many of these experiences possible.

But how often is the F&A experience considered?

When it comes to partnering with clients, there are two outcomes that should be considered:

  1. How can we improve the client’s employees experience with their own processes and practices?
  2. How can we favorably impact our client’s customers’ experiences?

Inevitably the two are interconnected. Continue reading

The Art & Science of Data-Driven Finance

office-sceneYesterday, Sutherland’s Jon Sunthimer, Vice President, F&A Global Technology Leader, co-hosted a webinar with Veena Gundavelli, the Founder and CEO of Emagia Corporation. The topic? Data-driven finance.

More than ever, finance organizations need to eliminate data silos, turn data into insights (and decisions), and digitalize and automate the Order-to-Cash (O2C) cycle. Finance executives are under increasing pressure to improve performance, with key drivers for finance transformation boiled down to the “4Cs”:

  • Cost
  • Control
  • Compliance
  • Cash flow

After an introduction by Ms. Gundavelli, Mr. Sunthimer pointed out that transformative is imperative. Digital technology isn’t limited to the domain of high-tech companies. Today, every company is a digital company, and those that aren’t have a limited shelf life.

Mr. Sunthimer elaborated on how today’s hot commodity is data. Companies sit on massive amounts of structured and unstructured data, and there is a strong desire to turn that mound into usable, actionable knowledge. Continue reading

The Weekly Roundup: Financial Predictions in an Unpredictable World

F&A weekly roundupChange is afoot. From new standards within finance, to economic and political turmoil across the globe – not to mention digital transformation – accounting professionals face a steady stream of challenges. Yet finance leaders must find a way to move forward during these unstable times; if they don’t, they risk falling far behind the competition. For this week’s roundup, Sutherland’s Editorial Team presents a selection of articles that explore some of the issues and try to predict what F&A can expect in the coming months. Enjoy the reading! (Feel free to tweet us or follow us @Sutherland_iBPO to continue the conversation.)

Robot Revolution? Fear Not, F&A

David Autor, Ford Professor of Economics and associate head of the MIT Department of Economics, recently gave a TED Talk about how technological advancement impacts employment. This AccountingWEB article outlines key takeaways from the research paper that informed Autor’s talk, and explores how they will apply to F&A. One of the main messages is this: Accountants won’t be replaced; they don’t need to fear a hostile robotic takeover. Continue reading

F&A Forecast: 2017 Predictions and Predilections

processesAs 2016 draws to a close, businesses are peering around the corner in anticipation of what the New Year will bring.

Here, we present our predictions for what 2017 will mean to F&A.

Higher Salaries = Greater Demand for Value

Salaries for accounting and finance positions will continue to rise in 2017. That’s the news according to the Robert Half 2017 Salary Guide. Fueled by an increased demand for skilled professionals, starting salaries will increase in range from 3.0% to 4.3% in 2017, conditional on the position. The 2017 average clocks in at 3.7%, one of the highest in the past decade.

The direct outcome of this will be an increased desire (and demand) to get rid of the redundant work that reduces employee output and doesn’t create any value. Robots (from RPA to cognitive) will help humans do more of the innately human work—the work that requires creativity, abstract thinking or human judgment. Continue reading

F&A: What Have You Done for Me Lately?

As we head into 2017, and into the fourth generation of business process services, there is little doubt that the F&A market has matured, dropping to six percent in 2015 after double-digit growth three years earlier. This will no doubt influence the year ahead, in both how process services are offered, and what clients are looking for.

With improvements having been achieved from a best-practices approach, location strategy and access to F&A tools, clients are now indicating that cost savings and existing productivity gains are very nice and well, but there is a deep desire for delivering on business outcomes.

Providers as Capacity Catalysts

Organizations are asking providers “what have you done for me lately?’ and are eyeing the ability to add capacity to their business in four strategic ways:

Actionable Intelligence: Some companies, for instance, want to tap into business insights to improve the customer experience, better their market performance or quickly respond to industry trends. There is little doubt, in our experience, that 2017 will see an increase in the application of analytics. Continue reading

BPaaS: Follow the Yellow Brick Road

In order to arrive at the ultimate destination of Business Process as a Service (BPaaS) “plug and play” success (“The Emerald City”), it requires an understanding of the journey (“The Yellow Brick Road”) and its potential dangers (“Lions and tigers and bears—oh my!”).

Despite all the drum-banging around digital transformation, recent survey results of business process buyers and providers indicate that most are not ready to embrace the magnitude of the change required to achieve the next level of “plug and play” services.

“I could think of things I never thunk before. 
 And then, I’d sit and think some more.” The Scarecrow

Technology is hyper-dynamic. Almost everything that makes your life easier and more convenient is digital. Less than 20 years ago a cellphone was the size and weight of a brick, certainly not “smart” and out of reach financially for most people. Now we can chat with friends using voice commands, ask Siri or Cortana to look up bits of information we’ve forgotten or even watch movies or listen to podcasts as we sit patiently in airport waiting areas.

As individual humans we can adapt pretty easily to technology and its impact on our lives. However, large corporate enterprises are often still supporting legacy systems dating back to the 70s and 80s struggle to keep up.

Yet, every CIO and senior executive understands that digital technologies, intelligent automation and advanced analytics are the “brains” of the organization, helping to deliver the insights required to stay nimble and competitive.

“I could stay young and chipper 
and I’d lock it with a zipper, 
 if I only had a heart.” The Tin Woodsman

A 2015 study by HfS Research of 178 service buyers shows that “seven-out-of-ten enterprises over $10B in revenues do not expect their core enterprises to be delivered As-a-Service for the next 5 years.” They will, instead, be leaning on traditional labor arbitrage models.

Why? Most likely because process and technology are the heart of any operation, and many companies are not as far along the maturity curve as hoped. To stay “young and chipper” companies need to adopt technology, rethink old ways of doing things and step out of their comfort zone, exploring new possibilities.

HfS has noted, “Worryingly, as the future reality for business operations unravels, new research shows more than two-thirds of today’s enterprises are simply not ready for what’s coming. They’re blissfully unaware that their comfortable world of reactionary operations and legacy status quo is going to get ripped apart.”

As well, in the 2016 SSON survey of 500 Shared Services and Outsourcing practitioners, 79% believe their strategy will deliver dramatic and recognized value beyond cost savings. “Most respondents agree that Process Excellence is driving radical change… while innovations such as RPA and Digital Disruption get lower ratings.”

It would seem that there is still plenty of opportunity to simplify operations and take action against significant process inefficiencies throughout the enterprise. This needs to happen first before real change can take place.

Enter the shiny promised land of the Emerald City of BPaaS (Business Process-as-a-Service), a 5th Gen BPO offering that optimizes processes to help clients reduce capex and opex, helps organizations have greater capacity elasticity and improved time to market.

Two of the (many) key attributes of BPaaS address the heart of every organization’s first step toward “plug and play” success: The need to simplify and standardize.

  • Simplification: Practitioners are hosted and leveraged (1:many) across different clients in a shared service model.
  • Standardization: Services are delivered with standard F&A processes with some configuration (and little or no customization).

However, streamlining and standardizing business functions aren’t the only factors in a successful journey. There is a need to re-visit the fundamental reasons for why such projects fail to deliver the expected result.

“But I could show my prowess, be a lion not a mowess, if I only had the nerve. Oh I’d be in my stride, a king down to the core I would roar the way I’ve never roared before.” The Cowardly Lion

What’s the biggest barrier to change? It’s usually a potent mix of a couple of factors:

  • People’s comfort with the status quo.
  • A lack of understanding of the degree of change required.
  • A breakdown in communication

These can be the true “lions and tigers and bears” that businesses will encounter on their journey. To drive change, organizations need to be courageous. They need to have the nerve and resilience to conceive of, implement and enforce digital and process transformation.

This means getting the right level of executive sponsorship to own and drive the change process. There needs to be an atmosphere of creative willingness to write off legacy technology and processes in favor of simple, less complex options. It means starting with the end in mind and being clear about the business outcomes you want to impact.

As well, it’s essential to communicate intentions and leverage key stakeholders. In our experience with facilitating change for our clients, one place to start is to develop “Vision Champions” by leveraging your in-house experts in the vision, design and communications process. And, then testing for understanding and acceptance.

Companies know and understand this in theory, but the practice of change management is often a lesson in the cold reality of dealing with human resistance to change and unexpected hurdles that arise along the way.

Here at Sutherland, we are not only process leaders, delivering “plug and play” business process services, but our #1 job is helping our clients realize change through F&A transformation. It’s what we do day in, day out.

In my next post I’ll share how we helped a client define the business outcome and then enable technology, process redesign and change management practices to achieve their goal.

transformation-roadmap

Does Your RPA Pilot Pass the Sniff Test?

600px-shutterstock_157405238When I go into a discovery session with a potential client, there is a good deal of time spent on discussing which processes that might be an excellent option for intelligent automation. Quite simply, to be a viable robotic process automation (RPA) candidate, a process needs to pass a certain minimal “sniff test” in order to have a deeper, more productive conversation.

So, before we can even head down the RPA road to transformation—or pilot kickoff—three basic, required “table stakes” need to be addressed:

People: The first question to ask is how many people are currently performing this process? To be viable, the process needs to present an opportunity of scalability. If a new RPA initiative will only impact one or two people, the likelihood of seeing a strong return on investment will be difficult. I typically set a baseline of no less than 10 staff members performing a process for it to be considered as an RPA candidate.  Continue reading

5 Ways RPA Increases Data Security

Companies around the world can run the tightest ship, with enforced and strong compliance, there can be a protocol book given to every employee, but walk into any call center or collections center, and inevitably you will see agents with post-it notes or a notebook with client information.

Despite strict protocols, well-intentioned employees can put private and confidential data at risk. From emailing sensitive information —financial, customer, internal or otherwise— using a personal account because it exceeds corporate mailbox limits to chatting with friends about work in a public place, IT managers and compliance officers simply cannot get visibility into all the actions a human may take.

There is no way to gauge what data employees commit to memory, what they retain, what they forget or the knowledge they take with them when they leave for another job. Continue reading