Life and Annuity Insurance Industry Business Reference Architecture
Business capability maps, value streams, and strategy maps for the insurance industry.
- Insurance leadership requires a unified and validated view of the business capabilities that help CIOs and the rest of the leadership to accelerate the strategy design process and that align initiatives, investments, and strategy.
- The business and IT often focus on a project, ignoring the holistic impact and value of an overarching value stream and business capability view.
Our Advice
Critical Insight
- Using an industry-specific reference architecture is central, and has many benefits, to organizational priorities. It’s critical to understanding, modeling, and communicating the operating environment and the direction of the organization, but more significantly, to enabling measurable top-line organizational outcomes and the unlocking of direct value.
Impact and Result
- Demonstrate the value of IT’s role in supporting your insurance business capabilities while highlighting the importance of proper alignment between organizational and IT strategies.
- Apply level 2 business reference architecture techniques such as strategy maps, value streams, and capability maps to design usable and accurate blueprints of your operations.
- Assess your initiatives and priorities to determine if you are investing in the right capabilities. Conduct capability assessments to identify opportunities and to prioritize projects.
Life and Annuity Insurance Industry Business Reference Architecture
Business capability maps, value streams, and strategy maps for the insurance industry.
Analyst Perspective
In the age of disruption, IT must end misalignment and enable value realization.
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An industry business reference architecture helps accelerate your strategy design process and enhances IT’s ability to align people, process, and technology with key business priorities. The insurance industry is being driven by increasing levels of competition. Often, the competition is being enabled by new technologies that are creating new product and service offerings. To remain competitive, modern insurers need to transform many of their core products and services along with how they are delivered. The end result is that technology is getting closer to the customers. Often specialized technologies are at the center of the industry’s changes. IT departments are dealing with more vendors, new delivery models, and growing complexity. The reference architecture is a powerful stakeholder alignment and communication tool. Ahmed Mapara, MBA |
Executive Summary
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Your Challenge |
Common Obstacles |
Info-Tech’s Approach |
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You need to improve your organization’s understanding of business capabilities and how IT can support the delivery of essential services. You work for an organization that wants to sharpen their alignment and focus on organizational outcomes and value by using automation and cost-effective methods that produce the most reliable and high-quality outcomes. Before executing any strategic initiatives, use this blueprint to understand how the organization creates value. |
You don’t have a clear path for capturing the right information, engaging the right people, linking with the needs of the business, and aligning with IT. The business and IT often speak in their own languages without a wholistic and integrated view of mission, strategy, goals, objectives, business processes, projects, and measures of success. The business and IT organizations often focus their attention within silos and miss the big picture need for a synergistic approach for successful outcomes. |
Build your organization’s capability map by defining the organizations value stream and validating the utilities industry reference architecture. Use business capabilities to define strategic focus by defining the organizations key capabilities and developing a prioritized strategy map. Assess key capabilities for planning priorities through a review of business processes, information, application, and technology support of key capabilities. Adopt capability-based strategy planning by ongoing identification and roadmapping of capability gaps. |
Info-Tech Insight
Utilizing an industry-specific reference architecture is central, and has many benefits, to organizational priorities. It’s critical to understanding, modeling, and communicating the operating environment and the direction of the organization and, more significantly, to enable measurable top-line organizational outcomes and the unlocking of direct value.
Industry Overview: Insurance
The insurance industry is experiencing a rapid transformation spurred by numerous factors. The key to success now lies in attracting younger, tech-savvy customers as the current customer base ages. Additionally, the industry must contend with nontraditional and insurtech competitors who are leveraging advanced, digitally-native products and delivery channels to challenge established players effectively.
As rapid changes are sweeping through the insurance industry, advanced technology is now a prerequisite for effective competition. To thrive in this environment, IT has become an indispensable component of the sector. It is imperative that IT aligns seamlessly with the business to provide robust support for its requirements.
Figure above: Value chain for the insurance industry.
Business value realization
Business value defines the success criteria of an organization as manifested through organizational goals and outcomes, and it is interpreted from four perspectives:
- Profit generation: The revenue generated from a business capability with a product that is enabled with modern technologies.
- Cost reduction: The cost reduction when performing business capabilities with a product that is enabled with modern technologies.
- Service enablement: The productivity and efficiency gains of internal business operations from products and capabilities enhanced with modern technologies.
- Customer and market reach: The improved reach and insights of the business in existing or new markets.
Value, goals, and outcomes cannot be achieved without business capabilities
Break down your business goals into strategic and achievable initiatives focused on specific value streams and business capabilities.
Life and annuity insurance business capability map
Business capability map defined …
In business architecture, the primary view of an organization is known as a business capability map.
A business capability defines what a business does to enable value creation, rather than how. Business capabilities:
- Represent stable business functions.
- Are unique and independent of each other.
- Typically, will have a defined business outcome.
A business capability map provides details that help the business architecture practitioner direct attention to a specific area of the business for further assessment.
Glossary of Key Concepts
A business reference architecture consists of a set of models to provide clarity and actionable insight and value. Typical techniques and terms used in developing these models are:
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Term/Concept |
Definition |
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Industry Value Chain |
A high-level analysis of how the industry creates value for the consumer as an overall end-to-end process. |
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Business Capability Map |
The primary visual representation of the organization’s key capabilities. This model forms the basis of strategic planning discussions. |
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Industry Value Streams |
The specific set of activities an industry player undertakes to create and capture value for and from the end consumer. |
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Strategic Objectives |
A set of standard strategic objectives that most industry players will feature in their corporate plans. |
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Industry Strategy Map |
A visualization of the alignment between the organization’s strategic direction and its key capabilities. |
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Capability Assessments |
Based on people, process, information, and technology, a heat-mapping effort that analyzes the strength of each key capability. |
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Capability |
An ability that an organization, person, or system possesses. Capabilities are typically expressed in general and high-level terms and typically require a combination of organization, people, processes, and technology to achieve. |
Source: The Open Group, 2009
Tools and templates to compile and communicate your reference architecture work
The Insurance Industry Business Reference Architecture Template is a place for you to collect all of the activity outputs and outcomes you’ve completed for use in next steps.
Download the Insurance Industry Business Reference Architecture Template
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What Is a Blueprint?
A blueprint is designed to be a roadmap, containing a methodology and the tools and templates you need to solve your IT problems.
Each blueprint can be accompanied by a Guided Implementation that provides you access to our world-class analysts to help you get through the project.
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Guided Implementation 1: Model
- Call 1: Introduce Info-Tech’s industry business reference architecture methodology.
- Call 2: Define and create value streams.
- Call 3: Model Level 1 and 2 business capability maps.
- Call 4: Map value streams to business capabilities.
- Call 5: Create a strategy map.
Guided Implementation 2: Drive
- Call 1: Introduce Info-Tech's capability assessment framework.
- Call 2: Review capability assessment map(s).
- Call 3: Discuss and review prioritization of key capability gaps and plan next steps.