As the proliferation of technology generates new opportunities for growth and competitiveness in the digital economy, it’s clear that today’s insurance organizations need to accelerate digital transformation and revolutionize their business capabilities for a new era. Our experience in today’s market highlights that insurers must be more strategic as they pursue transformation while managing cost, staffing and resource challenges amid changing marketplace demands and consumer expectations. In our view, flexibility has become critical to success.
Despite investing in human capital, for example, insurers around the globe are struggling to attract and retain much-needed digital talent. According to our 2023 Voice of Our Clients (VoC) report, 82% of executives in the property and casualty insurance sector cite difficulty in hiring IT talent. At the same time, they are in the process of planning and implementing significant IT projects. Our research reveals that 73% of executives plan to modernize their applications within the next two years. Similarly, AI and machine learning (ML) and legacy technology are the top two innovation areas over the next three years.
Combined with today’s volatile global markets, mounting operational complexity, and increasingly stringent regulatory requirements, insurance organizations are now facing the inevitable need to solve ‘digital gridlock.’
Agile Squads are solving today’s critical challenges
What can insurers do in response to today’s challenges? Agile Squads offer a unique staffing concept centered on value and business success. This approach is designed to help insurers accelerate the transformation journey and enhance competitiveness in the following ways:
- Digitization strategies for successful transformation. Agile Squads work closely with clients and pursue a deep understanding of their environment and IT challenges in order to accelerate projects. We are seeing insurers benefit from end-to-end management of software-development projects, starting with transformation strategy. The strategy component is key – enabling insurers to formalize, prioritize and execute product development with better results.
- Sharing risk with the client. Our approach focuses on risk sharing as a key benefit – one that we believe is unique in today’s managed-services market. Clients have stressed the need for vendors to increase risk sharing. In our work with clients, we often see the business in high-risk situations where one person alone is in ‘hero mode’ to complete significant projects – or face failure. Agile Squads share risk evenly with the client. Collaboration, knowledge transfer across the organization and risk-sharing mechanisms are baked into our model. Agile Squads are also evaluated on velocity and work in three-month cycles. As they increase delivery and speed in the value delivered during sprints, we re-establish the base velocity target to a higher benchmark.
- Reducing costs and enhancing cost predictability. Unlike traditional models, we don’t charge for time, we charge for value delivered. Businesses pay for a team, not for individuals, with a fixed project price in which we share risks and rewards. Clients gain greater flexibility in managing workloads without soaring costs. We compose autonomous squads or integrate them into the workforce. Our goal is to prioritize immediate client requirements and delegate capacity as needed to optimize flexibility, efficiency and results.
- Accelerating business performance and flexibility. Our approach features a high-retention staffing culture to enhance stability, collaboration and time management. We deliver value, not just skilled talent – helping insurers meet their business objectives by freeing up internal resources and increasing efficiency. Such flexibility is essential today amid changing markets and volatile economic conditions. Insurers often tell us how difficult it is to commit to a fix project scope amid unpredictable conditions. Agile Squads are helping them solve this problem by linking our commitment to the team’s capacity, composition and expertise. Instead of limiting ourselves to a preset list of deliverables and team capacity, we establish a flexible velocity target for project deliverables and adjust capacity as needed.
- Transparency and enhanced quality. Agile Squads apply key metrics for their performance on projects and share those metrics with clients. We also perform a matrix analysis quarterly to monitor the quality of work delivered and identify issues to be addressed. In our work with clients, our goal is complete transparency, featuring close collaboration that drives continuous improvement and value.
Partnering with clients to drive growth and success
Stability of resources underpins the success we are seeing with clients. We strive to maintain as much stability in the squads as possible. The Agile Squad function as a service (FaaS) model shifts the focus from managing key resources to managing key capacities. Several CGI insurance clients continue to increase their reliance on Agile Squads. For example, we supported the training of more than 400 employees over a three-year period for one client organization. The client has increased agility and control over spending on application development and currently has more than 160 Agile Squad professionals working on an array of innovative projects.
Agile Squads have had similar success with another major insurer’s digital transformation program. At the peak of the organization’s initiative, the business relied on 12 Agile Squads comprising about 90 consultants working on various key projects. Our work included support to train more than 1,000 staff and team leaders. We’ve seen the client enhance control of its application-development costs and generate 15% more value from its spending. Agile Squads are now operating in-house on a semi-permanent basis.
Our Agile Squads model is helping insurers drive growth and new opportunities for competitiveness through strategic transformation and a risk-sharing approach. The future is digital and, in our view, change is inevitable for businesses hoping to remain relevant and competitive. Contact us to explore how Agile Squads can help you create new opportunities in today’s reality.