Why do organisations embark on digital transformation? The precise drivers differ from company to company, but in most cases, it’s driven by a desire to deliver a stronger customer experience, to boost efficiency, and gain a competitive advantage. For marketing leaders, it’s worth giving careful thought to the role you play in all of this.

You could take a narrow view: i.e. focusing squarely and solely on upgrading your own function’s capabilities. The smarter move – especially if your aim is to elevate the status of the marketing function – involves leading by example.

You arguably understand the customer and customer trends better than any other function. Working with data – e.g. around advertising traffic and engagement – is already second nature to your team. Building on all of this, marketing is uniquely positioned to take a leading role in transformation throughout the whole business.

But what does taking a lead role actually mean? We would suggest the following:

Think about the various categories of data generated and owned by marketing (surrounding, for instance, customer behaviour, preferences and demand trends). To what extent might this information be of value beyond the marketing function when it comes to updating legacy processes?

For example, when it comes to digital marketing initiatives, it is likely that you have a wealth of data linked to metrics such as browsing behaviour, average session duration, click-through, and engagement (to name just a few). Looking beyond a narrow, marketing-specific perspective, this type of information tells you a lot about your customers; i.e. what devices and channels they prefer and what type of material encourages the most engagement.

Now consider this in the context of digital transformation across the wider business – for instance, in sales, customer service and product development. What type of new features and capabilities should those departments be developing in order to really resonate with your customers? Your marketing data can potentially provide valuable intel on all of this.

Action points:

• The desire to build a stronger customer experience is a major reason for instigating digital transformation right across the business. The marketing function typically owns a rich seam of data that provides intel on how customers perceive value and usefulness. This data can enhance decision-making surrounding a wide range of digital transformation initiatives.
• A few examples of digital transformation initiatives where marketing data may prove valuable include AI-driven virtual assistants in customer support, customer self-service portals in fulfillment, and digital payment platforms in finance.
• Marketing leaders should consider carrying out periodic audits of the data they own, to determine possible business-wide applications.

Do you have the right solutions to turn that data into workable insight? Consider the use of visualisation tools (e.g. Tableau, Microsoft Power BI – to name just a couple) to help make complex datasets easier to understand, analyse, and communicate.

Marketing leaders are generally no strangers to joined-up strategic thinking, whether it’s integrating sales and marketing touchpoints in B2B spheres or seeking to create a consistent ‘omnichannel’ experience for customers across multiple sales platforms and social channels.

As part of this, most marketers know instinctively (and often from experience) that silos are bad news. They lead to mixed messaging, wasted resources, confused customers, and lost revenue. But it isn’t just campaign execution where silos can cause problems; siloed approaches are also problematic when it comes to budgeting, planning and allocation of resources.

Let’s say you are seeking to allocate your department’s budget and devise an operational plan for the coming year. The traditional approach to this generally involves using mostly marketing-specific data, setting your own targets and working with your own spreadsheets. Meanwhile, however, other departments – e.g. HR, sales, production, and finance – are carrying out their own planning processes, using independent data silos, and devising their own targets.

Let’s also say you want to increase activity linked to a particular sales channel, product range, or geographical market. You can see how this will impact the marketing budget. But what knock-on effects will it have on, say, production, HR, and IT support? Analysing the data and getting answers can mean having to obtain and reconcile data from disparate systems – often drawing on a range of different assumptions and arrived at using different methodologies. It’s an approach which can be both drawn-out and error prone, and one which can very easily result in inaccurate conclusions being drawn.

Especially if you are still reliant on siloed, spreadsheet-based processes, it’s time to give serious consideration to integrated planning; i.e. the ability to bring together information from across strategic and operational areas of the business. For all decision-makers, this can help deliver a more joined-up view of business performance, equipping you to assess the company-wide consequences of decisions.

Action points:

• Rather than focusing solely on meeting department-specific goals, CMOs should ensure that everyone within the marketing department is aware of the organisation’s overall business objectives.
• Ensure that each new marketing initiative is fully aligned with the company’s broader strategic agenda.
• Encourage joined-up planning and strategic thinking by building closer relationships with colleagues from other departments (e.g. IT, sales, operations, and customer service). Seek opportunities to work together on cross-functional projects and initiatives that support digital transformation.
• Make the case for a single source of data and a single platform for financial, operational, and strategic planning and budgeting.
• CMOs can and should take a prominent role when new planning and analysis tools are being considered or implemented across the business. This includes input in choice of vendor, and helping to define organisation-wide, customer-centric KPIs.

Will the return justify the cost? How much disruption can we expect, and what will be the impact on day-to-day operations? What will new technologies mean on a purely personal level? When it comes to digital transformation, a certain degree of hesitancy or pushback is inevitable. It’s also fair to say that some parts of the business will be more resistant to change than others.

For most marketers however, responding to change is second nature. Creative thinking combined with the ability to ‘read the room’ are essential; whether it’s experimenting with new digital channels, or leveraging data and analytics capabilities to optimise the performance of campaigns.

If a willingness to innovate is already an important element of your team’s culture, how might this be put to work throughout the wider business? The CMO can and should be a change agent within the organisation as a whole. It’s a case of leading by example, and inspiring others to embrace innovation.

Action points:

• Look for ‘easy wins’, for instance, by carrying out an audit of activities within the marketing department, and highlighting those time-consuming manual tasks that are ripe for automation (thereby potentially creating more bandwidth to devote to more strategic and growth-oriented activities)
• Use the customer experience as a starting point. Map out the entire customer journey from the first marketing touchpoints right through to contract fulfillment (and beyond). Consider what type of capabilities and functionality are needed to deliver a standout customer experience (this will likely span multiple departments).
• From collaboration tools through to data analysis, carry out your own research to identify those tools and technologies that are most likely to boost efficiency, drive business growth, and create differentiation.
• Become an advocate of a collaborative approach to strategic development, for instance, by suggesting multi-department strategic planning sessions to consider digital transformation. Be ready to share your insights from a marketing perspective, while referring back to the organisation’s wider goals and objectives.

Billed as a once-in-a-generation reporting overhaul, the move to IFRS 17 was never going to be completely glitch-free.

The topline aim of the new regime seems simple enough: i.e. boosting comparability and increasing transparency, by establishing “unified standards for insurance contracts, related accounting, valuation and reporting for enterprises’ assets and liabilities”.

In reality however, becoming compliant has meant an overhaul in multiple areas, from accounting and actuarial methodologies, new reporting solutions to get to grips with, through to reconfiguration of existing data management processes. It’s meant a significant spend in terms of time, effort, and financial resources.

A year on from its effective date, have insurers successfully absorbed these changes? Evidence suggests that it’s still a work in progress. A recent survey from WTW indicated that 70% of first-time IFRS 17 reporters anticipated the new regime leading to a longer working-day timetable (WDT), with the majority saying that substantial work is still required until they reach a “business as usual” state.

KPMG found that post-implementation, insurers are encountering the following:

• Resource-intensive processes and longer close cycles
• Significant manual workarounds
• Data preparation and cleansing
• Large columns of spreadsheets
• Significant process and control gaps
• High resource turnover
• Errors and potential restatements
• Regulatory risk, including non-compliance with filing deadlines

Deloitte found that early implementers of IFRS 17 have encountered a range of challenges, including problems around data capture, the performance/suitability of dedicated IFRS 17 solutions, and issues surrounding integration.

Here are some of the ways in which further IFRS 17 process optimisation may be achieved…

IFRS 17 introduces several new moving parts into the methodology used by insurers to communicate their finances. The ‘contractual service margin’ (CSM) is the most notable novel addition; a complex way of measuring returns that demands the ability to collate, validate, and utilise vast amounts of data at a granular level.

On top of CSM, insurers now have a long list of calculations to grapple with, including present value of future cash flows, liability for remaining coverage (LRC) including all the related effects, liability for incurred claims (LIC), disaggregation (OCI, PL etc.), and an onerous contract test.

More than a quarter (27.2%) of insurers told Deloitte that ‘calculation capabilities’ is one of the areas that has given them trouble with achieving IFRS 17 compliance. KPMG highlights some of the difficulties this has caused on the ground: process and control issues, an increase in errors, and the risk of potential misstatements.

It seems that many insurers are making do with the modifications they have made to existing technology systems. In reality however, comprehensive, easy-to-use modelling and computing capabilities are a must if businesses are going to handle the various cash flow, risk adjustment, discounting and CSM calculations necessary under IFRS 17 in a sustainable way.

For businesses still tied to legacy (albeit minimally modified) processes, the need for constant workarounds – along with the very real risk of misstatements – isn’t going to go away.

For many businesses, the answer comes in the form of a dedicated solution: one that boasts features such as pre-configured standard IFRS 17 calculations and end-to-end reporting and disclosures.

The trouble is that ‘all singing, all-dancing’ out-of-the-box solutions can sometimes fall short of expectations. And in fact, 42% of businesses told Deloitte that packaged software solutions proved to be substantially inadequate for their organisations’ IFRS 17 needs.

As Deloitte points out however, the problem usually isn’t really with the solution itself, but the practicalities surrounding implementation. As with any major software project, it has to be tailored to company-specific requirements. And with IFRS 17 there were added complications, in that changes were made to the standard after it was first issued, so businesses and software vendors were both having to deal with a moving target.

Millennium Consulting is no stranger to complex change management and software implementation projects – so all of this sounds very familiar to us. Close collaboration is essential between you, your software vendor and any implementation partner. There needs to be proper consideration given to your existing architecture to ensure the appropriate flow of data between different areas of the business. This is on top of appropriate onboarding and user-focused configuration tweaks to ensure the right people can put the solution to work in the right way.

In short, there is no such thing as plug and play for a project of this nature. It helps explain why insurers cite ‘Technology design and implementation’ as the most in-demand skillset for achieving successful IFRS 17 compliance.

If you are yet to implement a dedicated solution, it is worth planning early to bring on board suitable external expertise (and avoid expensive mistakes later on!). Likewise, if your new solutions are so far failing to meet expectations, don’t underestimate the value of a fresh pair of eyes for highlighting areas to optimise.

When insurers were asked by Deloitte to list their biggest IFRS 17 implementation problems, ‘Capturing data inputs at the required level of granularity’ came top, cited by more than a third of insurance leaders.

The new standard means that no longer can the financial, actuarial and risk aspects of operations be treated as separate areas. The quantity and quality of historical data available to you feeds directly into your ability to calculate CSM and other metrics in a timely, efficient way. This is in addition to the ability to sort insurance contracts into appropriate groupings based on product type, degree of profitability and year of issue.

In many businesses, data architecture has evolved organically; e.g. separate accounting, actuarial and risk department datasets – each with their own solutions in play. More widely, data may be stored in a host of different locations, without a harmonised data model.

The upshot? No matter how powerful or feature-rich your IFRS 17 solution happens to be, it is always bound to fail in meeting expectations unless the data integration essentials are addressed.

You need an approach that aligns and centralises data company-wide, along with the ability to drill into the details, right down to policy-level, as and when required. Scalability is also key: the new standard means that insurers will be capturing, managing, and processing ever-increasing volumes of granular data, so it’s vital to have the capacity necessary for this.

There is, however, more to this than just staying on the right side of the regulators. In the Deloitte survey for instance, a sizeable number of businesses recognised that the changes they had made – or were planning on making – in response to IFRS 17 could have a number of valuable business benefits.

The removal of data silos can deliver a much clearer picture of enterprise-wide performance. As a few examples, this can help drive efficiency, strengthen fraud detection and prevention measures, optimise pricing and even deliver better, more personalised customer service.