By Christopher O'Malley
I’ve had countless conversations with business executives on the topic of liberating data as a means to better and faster decisions. From those conversations, I have witnessed a pattern of business goals and challenges that executives are struggling to resolve.
These discussions normally start with a description of their respective organization’s intense frustration in efforts to leverage data as an asset. In one example, I heard from a business-to-business insurance executive that his company, as a normal course of business, suffers losses on underwriting, but overachieves on the investment of premiums. The losses in underwriting are frustratingly tolerated because of the extreme difficulty in correctly pricing a new policy on a timely basis. In her company’s case, the analytics time required to get the pricing right would take as much as three days. In the business-to-business insurance market, buyers demand a rapid turnaround on quotes and will factor the quality of the response when assessing how they would be serviced as a future customer. Given that a three-day turnaround would make the proposal dead on arrival, sales people resort to matching competitive bids or leveraging their experience to make an educated guess. The entire organization knows that they must do better, but data physics seemingly lock them into this frustrating situation.
After spending time on the risks found in the “Aggravated Forest”, business executives will then step back and get excited about the outcomes that could be achieved by solving these data physics challenges. I hear remarks such as, “It would be a great win for the business to be more timely and accurate in pricing and, as a result, make better underwriting decisions on a given policy to a given customer, but solving these challenges in real time would create a whole new set of competitive possibilities for the company.” The discussion then becomes more specific on possible competitive advantages that could be gained.
“Imagine how our brand image could be changed and our winning percentage improved if our sales people could quote a policy while sitting in front of a customer. Customer experience plays a big factor in the decision process and being nimble in the sales process can often make the difference in earning the business.
With analytics that can be done in real time, imagine how much more productive our sales force could become. First, we could get more of sales people’s time in front of prospects building relationships rather than sitting in the office building proposals. Second, we could increase sales people’s confidence in pricing as to being reasonable and fair. This would more effectively guide their tactics and decisions during negotiations. Third, the increase in productivity could allow the company to have sales people cover a larger territory thus reducing the cost of sale.
Imagine how the buy side/sell side stock market analysts that follow our company would show support for our stock if we could demonstrate a proven method for profitable underwriting.”
This pattern of thought is one of being sensitive to mitigating business risk while imagining how such efforts could seize market opportunity. Liberating data to make better and faster decisions can improve performance from both a bottom line and top line perspective. New innovations, such as VelociData, are radically changing what is possible in leveraging data assets in terms of velocity, volume and variety.
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