How to Turn Your Company Into a Digital Powerhouse

By Samuel Greengard  |  Posted 2014-04-23
digital powerhouse

For most organizations, the transition to digital technologies hasn't been easy. Amid a growing array of devices, systems, apps and connection points, there's the mounting challenge of integrating everything and building better pathways to business results and deeper connections to customers, business partners and employees.

"A digital business isn't merely about adopting technologies and introducing them into the organization," says Adam Burden, a managing director at Accenture. "It's about how you leverage technologies to reinvent the organization you already have."

It's a concept that's forcing many business and IT executives to rethink and re-examine everything from enterprise systems to how basic business decisions take place. Mobility, cloud computing, big data, social media, connected devices and a whole lot more are creating a level of disruption that hasn't previously existed.

"The barriers are lower than ever for startups, consumers are more demanding, and the business and IT landscapes are changing rapidly," Burden notes. "The goal is to become a digital disrupter, as opposed to a digitally disrupted organization."

"Today, all roads lead to digital," points out Chris Curran, PwC Advisory principal and Chief Technologist. "From business strategy to execution, digital technology has become the foundation for everything."

Tackling this rapidly changing frontier requires new ways of thinking—and far better collaboration and conversation across the enterprise. There's also a need for new IT platforms that support digital interactions rather than merely transactions, and radically different skill sets. In this new order of business, agility and flexibility are essential.

In the past, gaining a competitive advantage in the business world revolved heavily around rapid adoption of niche technologies—ERP systems, CRM applications and other traditional tools—and pushing them out to workers. But the stakes have changed.

Brad Brown, a senior partner at McKinsey & Co., argues that organizations must adopt a digital fabric that supports more modular information technology. That means plugging in smaller, more specialized components, including mobile apps and capabilities, clouds, social components and the Internet of things. "The key question," he asks, is: "How can digital technology fundamentally change the company?"

David Nichols, EY America's IT transformation leader, adds that within the emerging digital business model, innovation is everything. The starting point for building a digital powerhouse is to understand that communication and collaboration are the foundation for faster and better decision making.

When organizations assemble the right technologies in the right ways, they're able to improve data flows and workflows. Advances in connectivity and connectedness have created entirely new channels and a highly fractured business environment. "The same technologies that create the enormous opportunities create enormous challenges," Nichols says.

Insuring a Digital Future

One organization that has placed digital transformation in the spotlight is AEGIS Insurance Services, an East Rutherford, N.J.-based mutual insurance company that provides liability and property coverage, as well as related risk management services, to the utility and energy industries.

When CIO Gene Blauvelt joined AEGIS in 2008, the organization was mired in legacy systems and software that couldn't support a digital enterprise. Since then, he has focused on transforming the company through a combination of automation, agile software practices, data sharing, collaboration and standardization. He began constructing a digital business model that migrated the company off a legacy midrange system that held a proprietary database and toward a more agile and modular infrastructure that uses a configurable rules-based environment.

"We had a portal, but there was no way to access data other than from desktop computers in the building," Blauvelt says. "That impacted a whole array of processes, including the ability for claims lawyers and others to attach photos to documents from losses and handle tasks in the field."

What's more, the system required a huge amount of IT time, money and resources. "The goal was to find a much quicker, cheaper and more efficient way to do things," he adds.

Over the past few years, AEGIS has embraced a number of new systems and processes. For example, working with global BPM and CRM firm Pegasystems and independent consultant Shirley Shea, it built a platform that ties together back-end systems and operations with a portal and mobile tools, including iPads that are used in the field.

By connecting policy information, authorizations and key cloud applications and databases—and adjusting workflows to take advantage of the technology—the company's loss control group has condensed a process that could take 30 days into two or three days. Along the way, it has trimmed costs and improved accuracy. Moreover, "Everything is digital, accessible and in one place," Blauvelt says.

In fact, AEGIS is now paperless. The integrated claims process spans multiple systems, including a data warehouse, contact management application, underwriting application and financial systems. This has resulted in overall productivity gains exceeding 40 percent, Blauvelt says. It also has helped build a foundation for faster development cycles and universal standardization across the organization.

Finally, the company has turned to human resources, payroll and expense clouds. "Information is accessible quickly and easily," Blauvelt reports. "We can pull up reports in minutes that previously took a few weeks, and we have one version of the truth."

Embracing Digital Disruption

Building a more agile and flexible framework requires a strategy and buy-in from business and IT leaders, EY America's Nichols says. Systems and processes must be built with security in mind, but they also must allow employees and customers to do the things they need—and want—to do.

"Smarter and more forward CIOs work to understand how to build systems and address challenges in a way that satisfies the user community and eliminates the need for workarounds and policy violations," Nichols says, adding that policies must be embedded in systems and workflows at an organic level. "Once you start plugging the holes in the boat, you're in trouble because you will be plugging the new ones as fast as you're finished with the old ones," he warns.

Accenture's Burden says that achieving a digital enterprise requires both a vision and an ability to hit constantly moving targets. It's wise, he says, to understand not only what industry peers are doing, but also what younger and more agile startups—essentially the digital disrupters—are doing.

Within an agile framework, it's crucial to understand how new methods supplant older and less efficient ways of doing things. For instance, crowdsourcing and social listening can reduce—if not replace—the need for focus groups and questionnaires.

"Business leaders must take the time to identify the right mix of technologies and tools for their specific needs," Burden advises, "and then put them to work in a disruptive way."