Download - Turning digital disruption into innovation
Turning Digital Disruption into Innovation with Data & Analytics
Global Big Data Conference, Santa Clara
Pat Saporito, Sr. Director, Global Analytics COE, SAP
August 31, 2016
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Public
Digital: The 4th Wave of Information Technology
1850
Industrial
economy
2020
Digital
economy
1990
Internet
economy
IT
economy
1970
$0.36T
$12.10T
All figures are in Trillions; 1990 international dollars; Source: Department of Economics, UC Berkeley, BAIN 8 MacroTrends Brief.
$27.50T
© 2016 SAP SE or an SAP affiliate company. All rights reserved.
$90.0T
Gross
world
product
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Living in a Digital Economy
Last two years Last two years End of 2020 End of 2020 In 2014
1 ScienceDaily, May 22, 2015 2 Technology Adoption Report on Business Networks, Ardent Partners
3 Internet of Things (IoT) 2013 to 2020 Market Forecast: Billions of Things, Trillions of Dollars, IDC 4 Statista
5 Cisco Global Cloud Index: Forecast and Methodology for 2013–2018, Cisco Systems Inc.
90%Of the world’sdata has been
generated1
40%Growth in
adoption of business
networks2
212 Billion
“Things” willbe connected3
9Billion
Mobile usersin the world4
51%Of workloadsprocessed in
the cloud5
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SOMETHING
INTERESTING IS
HAPPENING.
New Business Models
AlibabaThe most valuable retailer, has no inventory.
4
UberThe world’s largest
taxi company, owns no vehicles.
AirbnbThe world’s largest accommodation provider, owns no real estate.
FacebookThe world’s most
popular media owner, creates no
content.
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 5Public
Insurance Industry Disrupters
Trends
Peer to Peer Insurance
Usage Based Insurance
Spot Insurance
Contract/or
Management
Aggregators/Quote
Engines
More InsurTech Sources:
CB Insights InsureTech Blog
TechCrunch Insurance
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 6Public
The Analytics Native
Acquired by Monsanto for ~ $1 Bil.
Bayer recently made a $62 Bil. Bid for Monsanto!
200+ data scientists analyzing 50 terabytes of weather data/day!
The Climate Corporation aims to help farmers around the world
protect and improve their farming operations with uniquely
powerful software and insurance products. …proprietary
technology platform combines hyper-local weather monitoring,
agronomic data modeling, and high-resolution weather
simulations to deliver climate.com, a solution that helps farmers
improve their profits by making better informed operating and
financing decisions, and Total Weather Insurance, an insurance
offering that pays farmers automatically for bad weather that may
impact their profits.
Backed by Founders Fund, Khosla, Google Ventures, NEA, Index
Ventures and Atomico.
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Partner, Invest, Innovate
!
Insurers are using
their venture capital
funds to invest in
innovation!
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Data & Analytics as a Core Competency
Business model is based on
behavior science.
Uses thousands of analytic
models to classify and underwrite
risk, adjust claims and help
improve member’s health and
wellness.
Customer life time value focused
Variety of customer engagement
tools and incentives
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 9Public
World Class Data & Analytics; Often Described, Rarely Achieved
Chasm between what we hear … and what we see!
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Analytic Evolution
Raw
Data
Cleaned
Data
Standard Reports
Ad Hoc Reports
& OLAP
Agile Visualization
Predictive Modeling
Optimization
What happened?
Why did it happen?
What will happen?
What is
the best that
could happen?
Us
er
En
ga
ge
me
nt
Maturity of Analytics Capabilities
Self Service BI
Generic
Predictive Analysis
Co
lle
cti
ve
In
sig
ht
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Digital Evolution or Revolution?
Changing Customer Expectations
Changing Risk Exposures
New Partners
New Competitors – including digital start ups
New Business Models
REFER
FRIENDS
POST
REVIEW
JOIN
GROUPS
TRACK
ORDER
RECEIVE
PACKAGE
MISSING
ITEM
SETUP
PHONE
BILLING
ISSUE
MAKE
PAYMENT
PHONE
DAMAGE
TERMINATE
SERVICE
NETWORK
ISSUE
CHANGE
ADDRESS
RECEIVE
OFFER
DISCOVER
NEED
RESEARCH
RECEIVE
OFFER
USE
SERVICE
RESTART
SERVICE
SHOP &
BUYPURCHASE
RECEIVE
INFOR-
MATION
MISSING
ITEM
POST
REVIEW
HELP &
SUPPORT
BILLING
ISSUE
MAKE
PAYMENT
REPAIR
REPLACE
JOIN
GROUPS
CLAIMS
INCIDENT
CHANGE
ADDRESS
ADDITIONAL
PURCHASE
RECEIVE
OFFER
REFER
FRIENDS
WEB
DIGITAL
ADS
WORD OF
MOUTH
SOCIAL
TV
AGENT
WEB
SITE
REVIEWS
SEARCH
KW/ADS
CONTACT
CENTER
WEB
SITE
SOCIAL
AGENTWEB
SITE
CONTACT
CENTER
CONTACT
CENTER
AGENT
CONTACT
CENTER
CONTACT
CENTERSOCIAL
WORD OF
MOUTH
SOCIAL
SUPPORT
PORTAL
?
SUPPORT
PORTAL
?
BRANDED
COMMUNITY
?
AWARENESS
INTEREST
DECISION
ACTION
USE
ACTION
ADVOCACY
ADVOCACY
DECISION
USE
Every customer
chooses his own path!
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Digital (R)EVOLUTION?: Objective
Extend the addressable market
New digitally enabled
insurance products
Today Tomorrow
Core insurance business
New non-insurance offers
New digitally enabled
premium services
Core insurance business
Property & casualty insurance
Life insurance
Health insurance
Banking
Property & casualty insurance
Life insurance
Health insurance
Banking
Telematics (e.g., Pay as you drive (PAYD); Pay as you live (PAYL)
Simple Insurance
Context based offerings and next best offer
Smart Pricing
Retargeting
Infotainment
More advanced digital sales support for brokers and agents
Financial coaching; tire change; collection and delivery service;
retirement planning; eCall, …
Ecosystem; partner offers (for example: tires)
Use case examples
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Digital core
Omnichannel
network
The Internet of Things
network
Service and supplier
network
Workforce network
Front
office
Middle office Back office
Real Time Data Platform
Property Life Health
Real Time Data & Analytics – Engine for Digital Transformation!
Digital Framework for Insurers
Personalized experience
Reduce FTE costs
Engaged partners & suppliers
Optimized risk management
Operational AgilityDigital Orchestration Analytic Transparency
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GOVERN
Analytics Value Cycle
15
PREDICT
VISUALIZE& DISCOVER
PLAN
ALL USERS ACCESS ANYWHERE
ALL DATA
ALL ANALYTICS
REAL TIME,
ALL THE TIME,
FULL CYCLE
Enterprise
Performance
Mgmt.
Governance,
Risk &
Compliance
BI &
Exploration
Predictive &
Prescriptive
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Smart Insurance Architecture: No Touch, Real TimeHybrid – Cloud & On Premise Analytics
CORE APPLICATIONS
ECOMMERCE APPLICATION(S)
PLATFORM
C O N N E C T
CONFIGURATION PORTAL
C O N N E C T
MARKETING PORTAL CRM
Sales/Service
New Bus Acquisition,
Cross-Sell/Up-Sell,
Renewals/ Winbacks
Integration into existing
(customer) portals
CLOUD
New analytics capabilities, build
natively in the Cloud
ON PREMISEExtend, leverage, scalable
on-premise capabilities
MARKETING SUBMIT/QUOTE POLICY BILLING CLAIMS REINSURANCE
Prospect/Customer Data App/Quote Data Policy/Coverage Data
Premium/
Commission Data Claims data Reinsurance Data
SALES
Agent/Sales Data
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Insurers who have begun Digital Transformation
• Easy-to-buy, short-term
accident coverage,
distributed through mobile
terminals
• Owner's profile is
determined for 1 month
• Proactive insurance offer is
made when the telephone
detects a need (in an
airport, on a golf course)
• Installs a camera behind
the interior rear view mirror
• Enables driver to see both
inside and outside car
• In the event of an
emergency, the 10
seconds before and after
the incident are recorded
• Video used to coach
drivers online
• "Accident Toolkit" - a self-
service claim application
for policyholders
– Calls emergency
services
– Helps collect and
exchange info after an
accident
– Takes/ stores photos of
accidents
– Initiates claim process
• Insurance coverage
combined with social
networks
• Based on a network of
friends
• Minor damages (up to
mutually shared risk)
covered by the "network of
friends"
• Insurer helps with more
serious damage
• 300% increase in sales
• Mainly on the same day, or
evening before the activity
• Most sales made to 30-40
year-olds
• 70% drop in high-risk
events frequency for
teenagers
• Quicker claim processing
• Reduction in fraud
• Increase in the acceptance
of self-service portals
• Opportunity to interact with
the customer on a mobile
device
• Reduction in fraud
• Improved risk selection
• Decreased sales costs
• Reduction in admin costs,
especially for minor losses
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 18Public
Critical Success Factors
Executive Leadership
Business Driven Data & Analytics Strategy
Organization Structure (People, Processes, Technology)
Data Driven Culture & Democratization
Analytics Sandbox/Innovation Center
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 19Public
SAP Data & Analytics Strategy Framework
Objectives Business Needs Business Benefit Technology Organization
Background and
Purpose
Current State and
History
Objectives and Scope
Summary of Neds
Envisioned To-Be State
Priorities and
Alignment
Value Proposition of
Analytics
Expected Benefits –
Future State KPI
Business Case
Information
Categories
Architecture and
Standards
Applications
Governance Structure
Program Management
Roadmap and
Milestones
Measurement
Education / Training
Support
• Digital must be part of an overall business-driven data & analytics strategy
• Strategy is operationalized by Analytics Competency Center
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 20Public
Digital Transformation Roadmap
Define a Digital
Strategy
• What does digital mean to
your organization? Your
customers? Your
partners?
• How does digital relate to
your strategic
plans/initiatives?
• What are digital
Opportunities? Risks?
•
Conduct a Pilot
• Conduct pilot with existing / new
capabilities
• Test capabilities needed to support
pilot.
• Conduct next pilot
Review your Digital
Capabilities & Culture
• Data management
• Analytics
• Data bases/ platform
• Business Processes
• Skills & Behaviors
• Agility
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 21Public
Next Steps
• Business Intelligence/Analytics Strategy Assessment
• Review your existing people, process and technologies overall and specifically for digital
• Digital Transformation Design Thinking Workshop
• Define and prioritize your digital opportunities
• Digital Transformation Pilot
• Apply digital capabilities for pilot
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 22Public
Resources
SAP Digitalist! Blog
www.digitalistmag.com/
SAP Analytics Strategy Self Assessment Tool
https://sap-bi-strategy-assessment.com/
Hasso Plattner Institute for Design Thinking at Stanford Univ.
http://dschool.stanford.edu/
The Digital Insurer Forum
www.the-digital-insurer.com/
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 23Public
Thank you!
Pat helps companies form, evolve and leverage a business-driven analytics strategy
to improve business performance. Prior to SAP, she held business development roles
at Teradata and META Group (now part of Gartner).
Pat is a recognized insurance industry thought leader; she is a frequent contributor to
Best Review Technology Insights column and has been on the faculty of the Int’l.
Institute for Analytics, co-founded by Tom Davenport.
She is the author of “Applied Insurance Analytics” and a contributor to “Analytics in
Healthcare and the Life Sciences”, both published by Pearson/FT Press.
Profile
Available on Amazon
Pearson /FT Press &
other channels in print
and/or digitally
Download 1st chapter
(industry overview) free
Patricia SaporitoSr. Director, BI
Global COE for Analytics
SAP Labs, LLC
New York, NY
+1 (201) 681-9671
Blog: www.patsaporito.com