Digital transformation will reshape future business models
The new global context has accelerated the digital transformation. That is why Generali has developed reskilling initiatives for its employees and taken action to encourage digital innovation in the industry
The process of digital transformation began a few years ago, but has recently been accelerated by the Covid-19 pandemic: from virtual classes to remote working, forced closures have led to a much-needed acceleration of online and digital business models, allowing some businesses to survive and achieve short-term sustainability.
According to a McKinsey study, the pandemic has accelerated the digitalisation of customer interactions, supply chain and internal operations by three to four years, while the share of digital or digitally enabled products in corporate portfolios has increased by as much as seven years. Far from being a transient digital transformation, this is shaping up to be a true redefinition of future business models and, therefore, of a new way of working.
Although it is a recurring theme in the current technological landscape, digital transformation has been around for 20 years, but it has recently taken on a new meaning. For a long time, it was equated with digitalisation, or the transposition of traditional data formats into one that allows it to be stored digitally. This is an important aspect, and digital transformation does indeed stem from digitalisation, but it by no means covers the full scope of modern digital transformation. When companies realised they could exploit their newly digitalised data, they began to develop processes to do so. Since then, the speed of technological development has increased exponentially, making the need to adapt and remain competitive even more crucial.
On the other hand, a company that focuses on change and that adapts to a more flexible model is well placed to achieve better results: digital transformation essentially involves considering all aspects of a company and analysing how to modernise them so that they can keep evolving alongside technology. Technology, in particular, allows companies to:
- automate simple processes and to cut out intermediaries in particularly complex ones, enabling them to increase flexibility and their ability to employ human capital in more effective ways;
- find new revenue streams that were not necessarily available to the company when it was founded;
- and create more personalised and engaging customer experiences.
However, in order to successfully harness digital data, companies must adopt new technology as soon as it becomes available, test it and take advantage of feedback to adapt effectively and look to the future. While integrating new technologies can be more risky than using established systems, the benefits can be much greater. That is why in 2016 Generali has inaugurated its digital transformation strategy, continued in 2018 with over € 1 billion-worth investments as planned in the Generali 2021 strategy.
Although the digital transformation process is different for each company, it is always important to consider certain steps. Firstly, at the beginning of the process, it is crucial for a company to consider how it wants to evolve and the new available technologies that will make this possible, bearing in mind the resources it has at its disposal.
Secondly, the company must adequately train employees in the use and command of the new technology, so that they embrace the evolving processes they use in their work. To this aim, Generali has created “We LEARN: A New Way to the Future,” the reskilling initiative to help its employees develop the skills needed in the digital era and support the Group’s strategic priorities, which was awarded at the Efma-Accenture Innovation in Insurance Awards 2020. At the 2021 edition of the Awards, other Group initiatives were recognised as among the most outstanding innovations in the insurance industry addressed to employees as well as to customers and other stakeholders. Among these projects, some were made possible by the Generali Innovation Fund, created to stimulate new ideas within the Group always bearing in mind how digital transformation affects lifestyles and ways of working.
Digital transformation in the era of Covid-19
Digital transformation therefore involves revisiting processes and implementing automation, as well as developing new digitally enabled products and services. Perhaps the most concrete example of these evolving processes is the use of remote working, which has seen a global boom due to the Covid-19 pandemic. According to a global survey by Gartner, 88 percent of business organisations throughout the world required or encouraged all their employees to work from home when the virus began to spread at exponential rates, 55 percent of global companies offer remote working and 18 percent of their labour work remotely on a full-time basis.
A final effect brought about by digital transformation is the change to the way business is done. With digital transformation, companies are taking a step back and revisiting everything they do, from internal systems to online and face-to-face interactions with customers. A good example of this is Netflix, which started out as a mail-order service, then discontinued its video rental business after digital innovation made wide-scale video streaming possible. The transformation therefore requires a rethinking of ways to meet customer needs.
According to a study by Gartner, for example, a lack of a digital transformation strategy is one of the greatest obstacles preventing a company from reaching digital maturity. For a company that is unfamiliar with digital transformation, a strategy is essential and must include: a detailed and in-depth evaluation of the current state of the company’s business (strategic objectives, key performance indicators and growth opportunities); the company’s position in its sector of activity; an analysis of the feasibility of the digital solutions to be implemented; the direction to be taken for each digital initiative, the necessary resources and guidelines to measure results; the development of a budget plan that takes into consideration forecasted delays, as well as the availability of new technology that will require changes to investments; and the investment in human resources to ensure the company achieves its digital initiative.