(Image source: Majesco.)
Brad Denning, Principal, PwC: Welcome back to ‘Two-Minute Q&A Chat ‘exploring distribution management, where we ask the tough questions on how to get the most out of your transformation. In our previous discussions, we introduced the DM Maturity curve and discussed how carriers can define their current location on the curve. Today we will be discussing where you should be, and how to move up along the curve. Denise, what questions are lined up for today?
Denise Garth, Chief Strategy Officer, Majesco: Brad, carriers are curious, based on your experience in the industry, where should they be on the maturity curve?
Brad Denning: There is no one-size-fits-all answer to where carriers should be on the maturity curve. Each carrier must make this decision for themselves, and it will ultimately depend on a carrier’s respective strategies, goals, and objectives. If carriers view Distribution Management as a place where they would simply want to “keep the lights on”, meaning maintain current-state operations, then the current state is the first or second stage of the maturity curve.
On the other hand, if carriers have decided that Distribution Management is a place where they want to differentiate themselves in the market, then striving to move from the third to the fifth and most mature stage should be the goal. If this is the case, and if the carrier has made the necessary investment to undergo a DM Transformation, then the fifth stage should be viewed as the end goal, with every stage before that viewed as a temporary state necessary for a complete transformation.
Denise Garth: Interesting—and what are the most critical things to focus on in moving from stages 1 and 2 to stage 3?
Brad Denning: Carriers at stage one are putting in huge amounts of manual effort in order to stay just one step behind the competition. As a result, business operations tasks are time consuming, and it is almost impossible to scale to the enterprise level. Information is siloed in many offline documents that are hard for business users and carriers to access. In stage one, issues take a long time to address and presenting incorrect or incomplete information are pain points.
To move on to stages two and three, carriers must focus on automating processes and moving data to a singular online portal for all parties to be able to access. At stage two there is automation and data-sharing mixed with stage one manual processes and offline information. Stage two is developing operational efficiency in order to reach stage three. The organization should view this stage as a “practice phase” and focus on not being discouraged by slow results.
Once a carrier reaches the third stage of the maturity curve, enough automation has been implemented that the carrier can notice the operational efficiency that has been achieved.
Denise Garth: Great. Now, once a carrier achieves stage 3, how are they able to best differentiate themselves from their competitors and move further up the curve?
Brad Denning: At the third stage, operational efficiency has been achieved. Critical business processes are automated, freeing up the bandwidth of business users. Users can prioritize research that drives continuous improvement.
Reaching the fourth stage means that business users need to invest little to no effort to access the information they need, and portal capabilities should be fully self-servicing with human interaction being almost a luxury upgrade. At this fourth stage leadership at the enterprise level will be able to start tying measurable outcomes to the distribution strategies implemented during the transformation. At the channel level, incentivization will be based on target markets, and business will be driven to those channels that are most productive.
To reach stage five, distribution capabilities must be mature enough so that carriers have a holistic understanding of their business users’ wants and needs so that they only focus on developing services or tapping into ecosystems when it makes sense to do so. Carriers will be fully informed of their distribution strategy according to what the data is telling them. This stage will allow a carrier to fully differentiate themselves from competitors since we have not yet seen an organization fully achieve this level.
Denise Garth: Finally, why is it important to continue to measure your organization’s progress along the curve over time?
Brad Denning: These capabilities will give your organization tangible goals to achieve as a part of your efforts and provide measurable results as the backbone of any business case for change. Measurable goals give leadership a way to quantify the change as it is occurring, and provide team members with objectives to work towards as a part of their ongoing efforts to support the transformation
I hope we answered your questions on how to start thinking about Distribution Management and the benefits of defining your current location on the maturity curve. In our next session, we will start to dive deeper into key parts of your organization impacted by distribution, and the path along the maturity curve. For more information on how Majesco and PwC are working together to redefine Distribution Management, check our resource hub.