Building the Customer-Centric Enterprise

Building the
customer-centric enterprise
An Economist Intelligence Unit report sponsored by SAPPreface
Building the customer-centric enterprise is an Economist Intelligence Unit report sponsored by SAP. The Economist Intelligence Unit's editorial team conducted the interviews and wrote the report. The findings and views expressed in this report do not necessarily reflect the views of the sponsor. Dan Armstrong was the editor of the report. Our thanks are due to the interviewees for their time and insights.
January 2008Building the customer-centric enterprise
Building the customer-centric enterprise
ike the proverbial aircraft carrier, the "Marketing organisations in most insurance industry's turn towards a customer-centric viewpoint from its traditional insurers may have a segmentation Lunderwriting-oriented vision has been painfully model but it is not usually deployed slow. Success, many insurers have come to accept, is a matter not merely of delivering superior products elsewhere in the company."and services, but of incorporating customer insight into enterprise strategy on an ongoing basis, Michael Bernaski, acting chief analytics officer, Safecocreating a cycle of insight and action facilitated by transparency between front and back office. However, insurers wishing to translate conviction "Today in most insurance companies, the financial into action face persistent obstacles. systems are downstream from the customer and "The challenge that many companies face today product systems, and therefore you're potentially is that they have either abdicated understanding able to do analytics on customer and product systems of the customer to their agents or have insufficient but not directly link them to notions of profitability infrastructure to be able to develop a clear for financial analysis," Mr Bernaski comments. understanding of a customer's value to the "Marketing organisations in most insurers may shareholders and the agent," observes Michael have a segmentation model but it is not usually Bernaski, acting chief analytics officer for Seattle- deployed elsewhere in the company," Mr Bernaski based property/casualty insurer Safeco. adds. "Ultimately it needs to be an additional lens The model for that understanding has existed for corporate performance."for a long time, as exemplified by the enterprise Today at Safeco and most of its competitors, resource planning (ERP) capability developed in Mr Bernaski says, use of customer and distributor manufacturing industries over a decade ago. Mr segment analysis for insight into efficient uses of Bernaski recalls the envy felt by fellow insurance capital remains elusive because companies cannot industry consultants a decade ago at the ability of navigate with sufficient granularity between manufacturers to categorise and analyse customer customer, product and financial data. and distributor segments and to link customer, Mr Bernaski discerns three levels of maturity in product and financial views based on the "one analytics:truth" of a central data repository. Ten years l The most basic is "departmental analytics", where ago manufacturers could measure the relative each department draws from its own data sources profitability of customers and distributors and to execute the necessary analytics to set prices develop agile product, service and distribution and underwriting policy.strategies. Yet this capability remains out of reach l The next level expands that concept to a cross- for most insurers today. departmental framework where, for example,
© The Economist Intelligence Unit 2008 3Building the customer-centric enterprise
product and claims data are integrated for can guide senior leadership to make the decisions actuarial purposes. to accelerate business growth while containing l The final tier carries the principle to a unified costs and limiting exposure to fraud, Mr Miller approach across the enterprise. Most insurers, Mr affirms. "But getting reliable data to run through the Bernaski asserts, remain somewhere between the analytics is the hardest part," he cautions. first and second tiers. That effort begins with an evaluation of internal data within a company's multiple, disparate systems, "Very few have arrived at an enterprise analytics Mr Miller advises. Carriers must make an assessment viewpoint that weaves the variou... [download for more]