Extreme Competition

Extreme competition Peter Evans-Greenwood Chief Technology Officer

Some context U.S. software sales in billions of dollars Source: INPUT The Past Yesterday Now WS-* OASIS SOA Reference Model OASIS SOA Blueprints SAP Netweaver WS-I founded Oracle Fusion SAP WS JAX-WS J2ME Web Services MS Indigo ESB BPEL BizTalk 2004 Apache Axis Oracle BPEL JAX-RPC WBI-SF Apache SOAP Oracle WS WS-Policy and WS-Security MS SOAP Sun WS IBM Web Services WS (J2EE & .NET) WS-* starts exploding SOAP 1.0 1999 2000 2001 2002 2003 2004 2005 A standards development timeline © 2009 Unico – All rights reserved 1

Imagine… A new company enters the market in late 2008, LGM Wealth Management, who have found a new way of spinning existing solutions and technologies to provide it with capabilities an order of magnitude better than anyone else • Time to Revenue < 5 days • Cost to Serve < ½ industry average • New Product Introduction < 5 days • Infinite customisation How do you react? © 2009 Unico – All rights reserved 2

The challenge: insurance case work today Client works with an Client Advisor to select & customise a policy Advisor submits the Advisor policy for approval Case Client visits a 3. Doctor for a health check & 6. tests Team The back office ask Doctor 4. questions, clarifies issues, requests Doctor posts the follow-ups, and test results to the approves the case back office (or not). © 2009 Unico – All rights reserved 4

The challenge: insurance case work today Knowledge fragmented What is a case file? Client works with an and buried in channels & Paper? Database? Client Advisor to select & silos Records? Reports? Email? customise a policy Advisor submits the Advisor policy for approval No means of capturing tacit Case Client is not a knowledge integral part of Client visits a the process 3. Doctor for a Processes No holistic view health check & fragmented 6. of the problem tests across silos and manual activities Processes Team The trapped in back office ask Doctor application silos 4. questions, clarifies issues, requests Doctor posts the follow-ups, and test results to the Participants approves the case tied to locations back office (or not). © 2009 Unico – All rights reserved 5

A few interesting ideas Rich User Experience Providing a desktop experience from a web- Spaces, Not Applications based application Tools to solve specific • Flash & Shockwave problems, integrated with • Silverlight Utility Computing other tools, rather stand- • AJAX alone applications Using the web as a platform Mash-Ups* to deliver applications over • Wikis: shared blackboards A web page or the internet from a • Blogs: online diaries application combining centralized or distributed • Folksonomies: shared tags data from two or more data centre external sources • GMail • Chicago Crime DB • SaleForce.com http://www.chicagocrime.org/ • QuickBooks Online Edition • Ski Bonk http://www.skibonk.com/ * Examples taken from www.programmableweb.com © 2009 Unico – All rights reserved 6

A space for insurance case management Client Name Address 12 sad asldrk aslkdja lsdkj al skdjas Duisautemveleumiriuredolor in hendrerit in vulputatevelitessemolestieconsequat, vel Test Results Status Basldjk 8 asd 8 asd 8 asd 8 asd 8 asd 8 asd 8 asd 8 asd 8 Risk Management Status Loremipsumdolor sit amet, consectetueradipiscingelit, seddiamnonummynibheuismodtinciduntutlaoreetdolore magna aliquam Policy Details Status comment Basldjk 8 asd Asldkjalsjasldjasldasl Aklsdaksdhkashd Asd 8 asd Date, Time, Posted by BLAH Tags, tags, tags, … Add © 2009 Unico – All rights reserved 7

A space for insurance case management Client details from CRM RSS feed Client Name Address on case 12 sad asldrk aslkdja lsdkj al skdjas Workflow Duisautemveleumiriuredolor in hendrerit in vulputatevelitessemolestieconsequat, vel status Test results from Test Results Status provider’s system Basldjk 8 asd 8 asd 8 Medical image asd 8 asd 8 asd 8 from provider’s asd 8 asd 8 asd 8 system Risk Management Status Product Loremipsumdolor sit amet, consectetueradipiscingelit, Risk report in seddiamnonummynibheuismodtinciduntutlaoreetdolore magna Information Markup a la wiki aliquam Mojito Policy Details Status comment Basldjk 8 asd Asldkjalsjasldjasldasl Aklsdaksdhkashd Case work Asd 8 asd Date, Time, Posted by BLAH comments in a Tags, tags, tags, … Add blog Click through to Tags for semantic connected spaces search © 2009 Unico – All rights reserved 8

Insurance case work tomorrow Client uses a self service web site to create a policy tailored to their needs, scheduling any Advisor Client tests required Case An advisor can be called in (Skype, IM, …) to provide Client visits a assistance where required Doctor for a 3. health check & tests The back office Team approves the case Doctor (or not). Doctor submits test results directly © 2009 Unico – All rights reserved 9

Insurance case work tomorrow Active Client uses a self service web knowledge All involvement captured in a site to create a policy tailored single consistent to their needs, scheduling any Advisor Client shared space tests required Users create their own work Case spaces An advisor can be called in (Skype, IM, …) to provide Client visits a Content assistance where required Doctor for a 3. independent Informed healthand able to check of channels & testsparticipate The back office Team approves the case Doctor (or not). Integrated support for Doctor submits test structured and results directly knowledge unstructured Virtual teams © 2009 Unico – All rights reserved 10

What we are trying to achieve A more Drive cost Productivity Operational Costs supportive savings through environment, • Time to revenue ▼66% more efficient ensuring that all • Cost to serve ▼50% work practices stakeholders are involved and able to participate t t Future Case Worker Reduce the Business Value opportunity for errors and Capture tacit mistakes by and structured capturing and knowledge in a formalising single informal integrated Information Management t information and environment Information Quality Work Quality processes © 2009 Unico – All rights reserved 11

Delivered as a utility Case Applications Worker standards based, Client RSS, Web Services, Mash-Up Light weight, Web 2.0 Resource Management integration Content & Search, … Records Management Team Case Mash-Up Workers File Stores Client Reporting Mash-Up Advisor Collaboration Partner Applications Processes Partner Team Mash-Up External Search Sources Mash-Up Platform Utility Existing Back-Office © 2009 Unico – All rights reserved 12

Delivered as a utility Case Applications Worker Application silos standards based, Client RSS, Web Services, Mash-Up used as Light weight, Web 2.0 Resource Management integration User interfaces Content & information Search, … design to support Records appliances specific roles Management Team Case Mash-Up Workers File Stores Client Reporting Mash-Up t Advisor Collaboration Partner Applications Processes Partner Team Mash-Up External Utility maps between Search Mash-Up Sources Platform applications and users, Existing Back-Office capturing tacit Utility knowledge © 2009 Unico – All rights reserved 13

Delivered as a utility Case Applications Worker Application silos standards based, Client RSS, Web Services, Mash-Up used as Light weight, Web 2.0 Resource Management integration User interfaces Content & information Search, … design to support Records appliances specific roles Management Team Case Mash-Up Workers File Stores Client Reporting Mash-Up t Advisor Implementation Effort Collaboration Partner Applications Processes Partner Team Mash-Up External Utility maps between Search Mash-Up Sources Platform applications and users, Existing Back-Office capturing tacit Utility knowledge © 2009 Unico – All rights reserved 14

Delivered as a utility Case Applications Worker Application silos standards based, Client RSS, Web Services, Mash-Up used as Light weight, Web 2.0 Resource Management integration User interfaces Content & information Search, … design to support Records appliances specific roles Management Team Case Months Workers Mash-Up File Stores Client Weeks Reporting Mash-Up t Advisor Implementation Effort Time to Capability Collaboration Partner Applications Processes Partner Team Mash-Up External Utility maps between Search Mash-Up Sources Platform applications and users, Existing Back-Office capturing tacit Utility knowledge © 2009 Unico – All rights reserved 15

Challenges Licensing • How do I enforce What capabilities Security & SLAs? do we put in the Confidentiality • Do I need to pay? box? • Identity • Where do we use Management wiki’s a blogs? Where do we • Sensitivity: getting • How do they start? users to put integrate with our • No more four information in the other information? years and $50m! right box • What about Zoho or Google Apps? © 2009 Unico – All rights reserved 16

The bigger picture Unstructured Structured • Web Site Management example An • Ministerial Briefs • Customer Complaints • Correspondence Management from • Research and Development • Tendering and RFQ Management • MD Briefs Government • Programme & Project Management • Project Reporting Client • Strategy Development • Design Reporting • HR record keeping • Post Implementation Reporting • Policy and Advice • Standards and Specs • Inspections and Audits • Community Consultations • Policies and Procedures • Asset Information Management • Business Planning • Contracts Management • Drawings and Plans Management • Asset Planning • Community Consultation • FOI Request Handling • Risk Management • Business Case Development • Accounts Payable invoice processing • Incident Management • Operational Analysis • Legal Advice and Precedents • Asset Creation • Periodic Reporting • Taxation Work Papers • Asset Lifecycle Management • Specialist Studies • Audit Work Papers • Procurement • Strategic Directions Reporting • Audit and Inspection Reporting • Demand Management • Indicators Reporting • Major Environmental Assessments • Compliance Reporting • Market Research • Minor Environmental Assessments • Annual Reporting • Corporate Template Management • Environmental Management Plans • Relationship Management – • Publications Management • Work Order Management Government, Customers, Contractors, • Campaign Development • Recruitment Management Partners • Customer Engagement • Contractor Management • Performance Management • Lease License Management • Training and Human Performance • Health and Safety Management • Title Management Mgmt © 2009 Unico – All rights reserved 17

Mashup business Threadless KIVA Scion Design arbitrage Demand-driven charity Endless customisation • Paypal (payments) • Micro-credit • Pimp-my-ride • Flicker (photos) • Paypal (payments) • Production line • Polling (online votes) • Flicker (photos) • Dealers • Outsourced production • Blog (journal) • Body shops • Profitable in 1st year • Already a force in • Most successful micro credit product launch for Toyota ever © 2009 Unico – All rights reserved 19

What might this look like for insurance An Insurance Mash-Up Yesterday Today Tomorrow Bespoke development Mass production Endless customisation • Harvest historical • Harvest historical & • Enabling customers to information to create operational configure their own actuarial tables information to create policy • Hand craft policies actuarial tables • Connecting them • Develop insurance directly with the market factories to churn out mass customized policies • Pass bundles of policies onto the market © 2009 Unico – All rights reserved 20

Managing complex products Few products Some products All possible products A single product, Chaos, where each client has an the Model T of our industry individually tailored product Rather than being forced to the ends, we want to put the slider where it makes the most sense for the business. © 2009 Unico – All rights reserved 21

How do we create a configurable policy? Let’s steal an idea from flexible manufacturing A bike consists of a Handlebars Seat Frame frame, two wheels, handlebars, a seat, drive train, and each Front Wheel Back Wheel wheel has a tyre. We also offer three types of bike: mountain, racing and hybrid Drive Train We can define our product as a suite of pluggable Lego-like components and let customers mix-and-match © 2009 Unico – All rights reserved 22

How do we create a configurable policy? Let’s steal an idea from flexible manufacturing Assumptions • Simplifying our AConcepts bike consists of a Handlebars Seat • Benefit understanding Frame frame, two wheels, • Defined benefit • Competitive forces • Co-payment handlebars, a seat, • Restricted benefits Predictions drive… • train, and each Front Wheel • Risks Back Wheel • Policy wheel has a tyre. We • Exclusions & Inclusions Business Logic • Benefits • Constraints • Constraints • Competitor also … • offer three types • Prices • Recognising • Event and/or risk of bike: mountain, • Products situations • … • Events racing and hybrid • Deciding on actions • Exception (risk) • ... management Drive Train strategies We can define our product as a suite of pluggable Lego-like components and let customers mix-and-match © 2009 Unico – All rights reserved 23

Allowing us too put the slider where we want it Few products Some products All possible products A single product, Chaos, where each client has an the Model T of our industry individually tailored product Handlebars Frame Seat Front Wheel Back Wheel Drive Train The granularity of our model determines where on the spectrum if falls © 2009 Unico – All rights reserved 24

Then we operationalise the model Strategic Goals Handlebars Frame Seat Front Wheel Back Wheel Drive Train Information Technology Consistent Product Business Information Bill Customer Configure Product Mountain Bike Handle Bars Register Sales Finance Order Single Point of Contact Racing Bike Bike Seat Product Information Product Information Configure Service Product Management Wheel Service Status Hybrid Bike Product Information Frame Provide Service Customer Tyre Operations Partners & Suppliers © 2009 Unico – All rights reserved 25

… delivering the lot as a utility Client Mash-Up Applications Content & Records Management Case Mash-Up Workers Content & Records Management Client Risk Reporting Mash-Up Management Advisor Mashup Partner Applications Partner Insurance Mash-Up Mashup Team External Sources Business Web Utility Utility Existing Back-Office © 2009 Unico – All rights reserved 26

The impact of what we’ve done Sales is empowered to adjust Provides Product Management with a product to meet customer a palette for innovation and requirements creating new offerings Handlebars Frame Seat Front Wheel Back Wheel Drive Train Allows Operations to plan and Used by Finance as a tool to manage the delivery of the establish the cost, and product profitability, of products © 2009 Unico – All rights reserved 27

The impact of what we’ve done How many products? Sales is empowered to adjust Provides One, or millions? Product Management with a product to meet customer a palette for innovation and requirements creating new offerings How will the Handlebars Frame Seat What product options do product be offered we want to provide? to the market Front Wheel Back Wheel What options do I have when I react to business exceptions? How do I ground How do we support risk management in fact? the product? Drive Train Allows Operations to plan and Used by Finance as a tool to manage the delivery of the How do I price? establish the cost, and product profitability, of products © 2009 Unico – All rights reserved 28

The impact of what we’ve done How many products? Sales is empowered to adjust Provides One, or millions? Product Management with a product to meet customer a palette for innovation and requirements creating new offerings How will the Handlebars Frame Seat What product options do product Time to be offered Capability Product Catalogue want to provide? we to the market # of possible products • New product • Product Effort Front Wheel introduction variation Wheel Back What options do I have when I react to business exceptions? How do I ground How do we support t risk managementt in fact? the product? Drive Train Allows Operations to plan and Used by Finance as a tool to manage the delivery of the How do I price? establish the cost, and product profitability, of products © 2009 Unico – All rights reserved 29

We can use technology to create business agility Reduce the cost Increase the Business Inertia Value Harvested of reacting to amount of value Planning Granularity Value disruptions in harvested from the market, the market by converting out performing disruptions to a competitors and competitive leaving less advantage money on the t t table Exception Management Rate of Innovation Move users Enable from operational employees cost control to connect to roles into offline, the market and creative value Process Improvement & Optimisation t harvest new creating roles Redeploying Employees Dispursion of Innovation opportunities © 2009 Unico – All rights reserved 31

Agility creates a competitive advantage Ability to cope Complexity of environment with disruption Agility Orientation Corp. Harmony Corp. Insight B B Adaptability Initiative Competitive Uncertainty advantage Incomplete data Corp. Corp. Instability A Unpredictable A events Confusing information Reaction Speed © 2009 Unico – All rights reserved 32

We must manage continual change, not projects Mastering the three worlds of IT Executives need to stop looking at IT projects as technology installations and start looking at them as periods of organisational change that they have the responsibility to manage Andrew McAfee Harvard Business Review, November 2006 © 2009 Unico – All rights reserved 33

Imagine… A new company enters the market in late 2008, LGM Wealth Management, who have found a new way of spinning existing solutions and technologies to provide it with capabilities an order of magnitude better than anyone else • Time to Revenue < 5 days • Cost to Serve < ½ industry average • New Product Introduction < 5 days • Infinite customisation How do you react? © 2009 Unico – All rights reserved 34

Extreme Competition

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