Greenfield: Fast Track to Enterprise Transformation

Greenfields innovate quickly and freely, and they combine what’s possible from a new build with the capital resources and savvy associated with an established firm.

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It’s a sure bet that about half of your leading competitors are pursuing a disruptive innovation approach called greenfield. That’s right. Half. According to recent survey [i] of innovation practitioners by Celent, just over 50 percent of these future-focused carriers, regardless of size or type, are embracing greenfield.

In a nutshell, greenfield initiatives operate as a separate and autonomous entity from the mother ship. Their purpose is identifying and exploiting unmet customer needs in ways that the parent—or the entire insurance industry for that matter—has not been able to.

Unhindered by the legacy mindsets, processes and systems of the hand that feeds them, greenfields innovate quickly and freely. They start small, test, learn and adjust until an offer is ready to scale. In this manner, they combine what’s possible from a new build with the capital resources and savvy associated with an established firm.

Prominent strategies for leveraging greenfield

To leverage greenfield, there are two prominent strategies insurers are pursuing. Which path you choose depends upon your firm’s culture and preference. A few companies are even undertaking a hybrid approach, using each strategy for a specific initiative to gain internal expertise and determine which strategy it the best fit.

Establish a challenger proposition to an existing product or service by building a new offering that gradually replaces, or integrates with, legacy system functionality. As the challenger offering improves customer experiences, it will gain acceptance until it eventually overtakes the existing offering’s market share. At this point, the challenger becomes the primary product or service, sunsetting the existing offering. Rinse and repeat across all lines of business and product offerings.

Act as a catalyst within the enterprise that enables your greenfield team, or teams, to learn how to innovate and then bring the resulting best practices back to mother ship. From there, you can use your first greenfield to spawn other projects to change legacy processes, attitudes, skill sets, distribution systems and products. Additionally, you can use the first greenfield to create wholly new business models that blend various aspects of traditionally siloed offerings to design novel products and services.

Using either strategy, the initial effort serves as a center of excellence for building expertise across the enterprise. By combining strategy with a robust greenfield technology solution, insurers gain an agile innovative and open platform on which channels and services can be easily configured

4 reasons a greenfield technology is a good platform for success, now

Once you’ve decided which greenfield strategy to pursue, the next fundamental element is having the right technology platform to ensure success.[ii] Here’s why a purpose-built solution helps keep you on track to success.

  1. Time-to-market and build costs have decreased dramatically, thanks to advances in cloud-based services and technology.
  2. Starting with a blank slate makes it possible to create businesses that are natively digital, with significantly lower run costs.
  3. New business models and data-driven approaches are already winning over customers to insurers pursuing disruptive innovation.
  4. You create momentum via collecting, analyzing and combining data in ways that enable launching and testing offerings rapidly to deliver increasingly value-added products and services. Eventually, it will become difficult for your competitors to even catch-up.

What should we look for in a technology platform?

Unsurprisingly, innovating disruptively requires a fundamentally different insurance technology platform to match. What’s more, an appropriate platform is more than a collection of software components, it’s designed and delivered using the same greenfield principles you need to embrace.

Uses Test-and-Learn to fail fast, iterate rapidly and evolve continuously. There is only one absolute in greenfield: you don’t know what you don’t know. Thus, a greenfield technology platform must ensure you can get an offering to market quickly, analyze outcomes, rapidly adjust and reintroduce not once, but over and over again. Be aware that most technology solutions available today were developed to address yesterday’s market realities, when lengthy development cycles and static product offerings were the norm. Those days are effectively over.

Exhibits agile and DevOps maturity. It’s not a question of whether a technology platform is developed using Agile and DevOps practices, as both are table stakes. Instead, it’s how mature those practices are. After all, a technology platform that isn’t continuously rolling out its own new capabilities can’t be expected to support insurance products that do so.

Open in all ways: open source, open architecture, open APIs, open integration layer. The key lesson our industry has learned from the InsurTech model is that proprietary is out and open is in. Any proprietary components within a platform’s technology stack lead to insurmountable constraints. Remember that openness includes the integration layer for orchestrating internal and external connectivity via open APIs. This supplies you with the capability to connect to partners and ecosystems dynamically as well as providing a path for migrating legacy products and services.

Simplicity-driven. Delivering uncomplicated business capabilities as a quick-start MVP [minimally viable product] is the essence of a road-ready greenfield technology platform. If you detect unnecessary complexity—particularly where it impacts business users—while evaluating a solution, that’s a big red flag.

Scalable and functionally deep. Moving your greenfield from an exploratory initiative to a fully competitive product requires scalability that some platforms are unable to achieve. Although you may need only selected capabilities to start, ensure the platform has the deep bench required to support an enterprise transformation journey. Combined with functional depth, adopting a solution hardened to perform at scale is the critical enabler for supporting enterprise transformation.

As we’ve discussed, industry experts and your own competitors, alike, are embracing greenfield as the quickest way to transforming insurance enterprises of all sizes. The question for you to pose within your firm isn’t “should we do greenfield” it’s “why haven’t we started already?”

[i] Insurance Innovation Outlook 2019, Celent, page 12. “The final notable area from the investment expectation data relates to greenfield startup activities. Just over half, 51%, reported that their investment would increase.”

[ii] Source: The State of the Financial Services Industry 2019: Time to Start Again, Oliver Wyman

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Anthony Grosso // Anthony Grosso is Vice President, Product Marketing & Industry Strategy at EIS Group and the author of The Greenfield Field Guide. Grosso has over 20 years of hands-on experience leading innovation, business development and product management for insurance carriers, financial services and software companies. At EIS Group, which provides a next-gen insurance platform for future-focused carriers looking to launch new digital offerings with InsurTech capabilities, Grosso has served in a multifaceted role from product management to enterprise sales. Prior to joining EIS Group, he led various strategic initiatives at The Hartford.

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