In an increasingly competitive market, insurers must use business intelligence (BI) to differentiate themselves in the digital age. But how best can the effectiveness of such a solution be measured?
Simply put, ROI comes down to the benefit of a solution minus its cost. The faster such benefits can be realised, the higher the ROI. When it comes to BI, these benefits can be quite impressive from both a strategic and an organisational perspective. But then, such a solution must deliver demonstrable results against the specific challenge an insurer sets before it.
And while BI has the potential to give an insurance provider the impetus for better strategic growth, a Cloud-based BI solution can deliver even better results given its cost-effectiveness and faster time to implement.
The key to maximise the ROI of BI for the insurer is to frequently deliver small solutions with a limited scope. This has the obvious advantage that business requirements are less likely to change over a short time period. Being able to implement a Cloud-based solution faster than a traditional one also means there is a significant advantage when it comes to improving the ROI.
Nucleus Research, a firm specialising in measuring the value of technology, states that a BI solution delivers ROI on three levels – eliminating manual processes, limiting errors, and saving time. According to the firm, in some instances, this yielded an ROI of almost 200 per cent. Moreover, leveraging analytics to improve decision-making following a BI implementation, the ROI derived increased to almost 400 per cent.
Even more impressive is the fact that when BI is deployed across the bulk of the organisation and aligned to daily operations in addition to the goals of senior management, ROI jumped to just under 1 000 per cent. BI cannot operate in isolation but must be pulled through all aspects of business in the insurance company. Additionally, the insurer has to set specific targets that need to be delivered on and evaluated against to prove the efficiency of the BI implementation.
BI provides companies in any industry with better information, resulting in faster and more improved decision-making.
As a result, there is a direct impact on the bottom line. Given this, organisations must ask themselves what would happen if they do not implement a BI solution. BI enables the insurer to remain relevant, competitive, and provides the information required to develop innovative solutions designed to meet specific customer requirements.
Kelly Preston is the data analytics manager at SilverBridge.