Creating Business Value from Business Process Management: Solutions in Insurance

by Benjamin Moreland,  Donald Light, December 8, 2010
Industry Trends
North America

Abstract

Insurance is a process, rules, and data business. Competitive success depends on making processes more efficient, consistent, and agile. For many insurers, large portions of their business processes are still ill defined, poorly documented (or not documented), and labor-intensive.

The business process management (BPM) cycle begins with modeling the business processes, designing and implementing an automated solution; monitoring the predefined SLAs; monitoring business value and IT value metrics; and feeding the data into an analytics and optimization tool to make the original model more efficient. This may sound simple enough, but many companies have had their BPM projects either fail or simply not meet expectations.

In a new report, Creating Business Value from Business Process Management: Solutions in Insurance, Celent provides 10 BPM recommendations at the enterprise governance level and project level to enable insurers to maximize their BPM investment.

“BPM has reached a level of maturity where the insurance industry has learned enough lessons to avoid the most common failure points of the past 10 years,” says Donald Light, Senior Analyst with Celent’s Insurance Group and coauthor of the report. “Insurers now have the BPM roadmap to be successful.”

“In this competitive environment, insurers either select, or are selected against,” adds Benjamin Moreland, Senior Analyst with Celent’s Insurance Group and coauthor of the report. “Insurers that do achieve maturity in their use of BPM, meaning both business modeling and business processing, will not have the tools to compete.”

This report provides recommendations for both BPM governance and BPM project execution. It aims to help insurers be as successful as possible in reaching their business goals.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction

4

What’s in a BPM Solution?

5

 

BPM Elements

5

 

Deepening and Extending Insurance Value from the BPM Cycle

6

 

Getting Centered: Workflow, Integration, and Content

7

 

BPM Standards

9

Recommendations for BPM Success

11

 

Recommendation 1: Establish BPM Governance

11

 

BPM Planning and Governance Recommendations

13

 

Recommendation 2: Define BPM Strategic Direction

14

 

Recommendation 3: Identify and Evaluate Business Projects

15

 

Recommendation 4: Create a BPM Center of Excellence

16

 

Recommendation 5: Inventory BPM Solutions

17

 

BPM Project Execution Recommendations

18

 

Recommendation 6: Document the Business

19

 

Recommendation 7: Design the "Sad" Path

20

 

Recommendation 8: Define the Business and IT Process Metrics

20

 

Recommendation 9: Understand the Integration Effort

22

 

Recommendation 10: Identify the Data Owners

22

Conclusions

24

Leveraging Celent’s Expertise

26

 

Support for Financial Institutions

26

 

Support for Vendors

26

Related Celent Research

27

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