By Tom Murray, Head of Product Strategy, Exaxe
In the life and pensions industry, this is a common occurrence. Existing processes and procedures have been built up over many decades and prove to be inimical to the very idea of new product design. Bold ideas are agreed but quickly get watered down as the detailed stage starts and everyone begins to have their say. Even bringing in outsiders from dynamic innovative companies often doesn’t help, as they are quickly bogged down in a morass of existing procedures that reflect a history of conservative business procedures and strategies.
The problem is that life and pension companies are not traditionally designed to handle the type of rapid design process that goes into product development today. A great deal of effort is expended but unfortunately in large companies this takes place in a number of silos. When the time comes to reveal what has been designed, it turns out that too many people were working individually and have designed independently of each other. The attempt to bring this together into a single coherent offering means compromises and this results in a product that has lost all uniqueness because it is an amalgam of multiple ideas with the best bits shorn off to fit into the whole.
We keep trying to turn individual ideas into new products without helping the team to work together in sophisticated ways. We need to change our processes and utilise technology to support a more team-based approach to new product design and development. The trouble is that many in the life and pensions industry are still wedded to a conservative approach to technology usage that is reluctant to adopt the newer technological innovations that are appearing almost daily.
This attitude needs to end or life and pension companies will find themselves outclassed by newer and more flexible competitors from outside the traditional life and pensions market. In a world where technology allows collaboration across time zones and huge distances, there is no excuse for organisations which remain fettered by the shackles of time and space. Real-time online meeting tools that permit the sharing of workspaces have opened the door to faster group working, the type of working that obviates the need for the reinvention of the wheel by allowing people to build on each other’s achievements in order to design and develop new products in timeframes that are mere fractions of what used to be required a mere decade ago.
The move away from spreadsheets to calculation engines and databases of individual calculations allows the re-use of previously designed components. It speeds the time to market for life and pension products and ensures that the knowledge that each innovation is based on is shared widely throughout the company. Re-use of existing components and knowledge sharing are what lies at the heart of fast-paced design that enables companies to get to and stay at the forefront of the industry.
The importance of being able to innovate and change rapidly is heightened by the increase in regulatory activity globally ever since the current financial crisis started. The consequent depression of fund values and the losses sustained by consumers in some investment and pension funds has pushed regulators to increase their level of activity. The result is ever-increasing rounds of new regulations and there is no end in sight. Companies whose ability to respond is stymied by old-fashioned processes supported by out-of-date technologies will struggle to maintain their existing position in such a dynamic marketplace and they will have absolutely no chance of leading from the front.
This regulatory push has little effect on those who make extensive use of automated tools as they come with built in auditing facilities and can also provide comprehensive and rapid scenario testing, which makes it far easier for them to fulfil regulatory requirements and, more importantly, to prove that they have done so. Any company that resists moving to shared and highly auditable development and testing platforms is exposing itself to the risk of regulatory censure and is also running a high-risk of becoming over dependent on individuals within the firm, a position that increases the danger of either regulatory or commercial mistakes, which could be very costly to shareholders.
Improving communications by using web-based communication technologies and increasing re-use by utilising calculation engines rather than spreadsheets are two key ways that product design people can speed up product design and development processes within a life and pension company. Without them, the flow of information and knowledge throughout the organisation is greatly impeded creating dangerous silos that inhibit rapid response to dynamic market conditions.
Existing processes impede clever design. Efficient collaboration is required to build on ideas in order to maximise the creativity and capabilities of our employees. Without the support of technology, companies are doomed to slower, complex processes that waste the ideas, talent and energy of their staff and leave them unable to compete in today’s fast-moving business environment.
If you would like to read more of Tom’s articles on life and pensions, please visit the Exaxe blog: http://www.exaxe.com/blog
Tom is also on twitter – http://twitter.com/TomMurrayDublin
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