Technology Offers More Than Speed
Everyone recognizes that companies can use technology to process information faster and more accurately. But the real key to working smarter is applying technology to re-engineer and reorganize business processes. Where one firm will use technology to make the old processes faster, the successful one will leverage the technology by creating new ways of getting things done.
Insurance companies, banks and securities firms are a good case in point.
Traditionally, they developed computer applications to support the needs of specific departments. In an insurance firm, for example, the automobile insurance policy, the homeowner’s policy and the life insurance policy systems were all separate, so information about one customer was stored in three different formats in three different places. Bankers, similarly, were able to get account information but were not able to look at a customer’s total relationship with the bank.
Today, the concept of the “information-based organization,” as introduced by Peter F. Drucker, is organized around a view of the whole customer relationship. Information is entered only once and is consistently available across all departments.
The chairman of one major bank said the better use of technology is one of the few remaining ways to beat the competition in a regulated environment. This bank’s information systems department is a full partner in the organization’s strategic planning. The bank has a major effort with a systems integrator to develop an integrated system that will serve it and its partners throughout the 1990s and into the next century.
A well-known insurer spent $15 million over five years to develop a state-of-the-art computer environment that would allow a single customer service representative to handle all insurance needs from a single terminal and to promote cross-selling. This same company is investigating the possibility of giving its customers direct access to their own information, which will allow the employees now involved with this customer interaction to perform other work.
Customers have high expectations of the service they receive from financial service firms. That service could be through an agent, a telephone, a teller or an automated teller machine. Regardless of the delivery mechanism, customers expect the service to be both accessible and timely, especially when they have questions or concerns about paying premiums, making deposits or changing account or policy information.
The results of business re-engineering can be dramatic. Companies are cutting in half the time it takes to serve a customer and are reducing overhead by more than 30%. Thus, leading-edge firms are extending their lead over competitors.
