Digital Transformation Leader: Suncorp Group

Leaders communicate the path; followers must interpret. 

Leaders in digital transformation foster a culture of experimentation, customer experience management supported by mature optimization programs, and measurements relevant to their goals. They demonstrate how an integrated platform, skilled people, and mature optimization capabilities are the keys to success.

One such leader is Murray Howe, Executive Manager of Digital Strategy & Innovation at Suncorp Group. Recognizing the need to adapt to changing customer needs and expectations, and the vital importance of digital transformation to achieve the desired results, he identified five necessary cultural changes necessary:

• Integrated platforms
• Customer knowledge
• Using data assets
• Consistent customer experience
• Continuous improvement

Suncorp Group’s efforts has yielded impressive results: the group’s sales in the personal insurance business now start online 70 percent of the time and uptake of the mobile banking app exceeded 20 percent of customers within 6 months.

Note from the editor: Sue Aldrich’s case study on Suncorp Group is reprinted here (with minor updates) with permission from research commissioned by Adobe Systems, Inc.

Suncorp group’s digital transformation

Evolving Customer Expectations

Suncorp Group is a conglomerate of 15 insurance and banking brands in Australia and New Zealand with nine million customers. It is structured so that each business’s results are transparent to investors. Senior management has been focused on operations, solving business problems, and executing business and operations plans, but in recent years has recognized that the customer must be central to focus, strategies, and plans. Suncorp can control changes to its own business operations, but it must react to changes to customer needs and expectations. The organization realized it needed to become agile and adaptable in order to meet evolving customer expectations, and that digital transformation is the heart of this evolution.

Digital Strategy Goals

Suncorp’s digital transformation, just four years along, has made great strides in establishing a unified digital platforms used by all businesses; streamlining some customer experiences resulting in a dramatic increase in sales; and shifting focus from operations to customer needs.

The digital strategy leads this transformation. Murray Howe, Executive Manager of Digital Strategy & Innovation, describes five broad cultural changes necessary to support Suncorp’s digital transformation:

• Integrated Platforms. The lines of business need to adopt common platforms and become proficient with them. At Suncorp, there is one technology business serving all companies, and a single digital team supporting three dozen or so web front ends.
• Customer Knowledge. Each core business must embrace the shift from optimizing channels to understanding customers. This effort has been underway for about three years, and capabilities are not yet mature.
• Using Data Assets. The organization must also learn to unlock the value of data, which means shifting its focus from transaction data to interaction insights. In FY2013 there was broad recognition that data is a strategic asset that can be managed and valued better.
• Consistent Customer Experience. Each business needs to design and deliver continuous or consistent customer conversations. Remembering a conversation across channels and sessions should influence future conversations. Since the various Suncorp businesses share customers, new practices for leveraging the customer asset across organizations are evolving. Rather than think in terms of success in advertising and attracting, marketing teams are starting to think in terms of service, sales, and customer experiences. In one of Suncorp’s markets, improved customer experience has contributed to quadrupling of online sales, and an additional 70 percent of sales now start online.
• Continuous Improvement. Continual improvement and experimentation need to be embedded in the culture, capabilities, and practices of every business. Conversion rates in one of the businesses have improved between 10-20 percent, year-over-year (YOY).

Unified Platforms and Data

During the first three years of this digital transformation, Suncorp established a common, unified platform for marketing and customer experience, as well as building skills and practices. Suncorp lines of business each have marketing organizations supported by a shared IT services division. In the past, lines of business invested to achieve their own goals without considering the impact on the rest of the Group. It is not surprising that there were multiple independent platforms and databases that must be merged and replaced. Today, the marketing organizations recognize that only common platforms can deliver the scale and agility they will need to be successful, and to make best use of skills and investment.

Maturity Model

Howe believes they have achieved the first stage of maturity, according to a model he has developed, and are now focused on the second. He sees a big risk in underestimating the difficulty of reaching the next level of maturity. The environments for marketing, business information and customer interaction need to merge, and merge across lines of business. How do you replace technology and develop new skills and practices, without bruising your business? Who leads deployment of new capabilities—marketing organizations or IT?

Howe’s maturity model for being able to deliver the right interaction, for the right customer, at the right time, on any channel has these four stages:

1. Tracking and measuring. Click and campaign tracking; standard metrics
2. Benchmarking, analytics, optimization; segmentation, retargeting, path analysis, automated reporting
3. Advanced segmentation and integration. Personalized content, integration with channels and across devices; cross-channel path analysis and targeting
4. Machine learning; single customer view with third party data enhancement; outbound predictive targeting

There are 21 capabilities in Howe’s model, and each business has competency scores for each capability. Business initiatives are mapped against the model to assess maturity required vs. maturity currently achieved, and roadmaps are developed accordingly.

Howe’s aim is a pyramid of technology and capabilities. “If the foundation blocks are weak in capability, the next layer will be weak. The common denominator is data accuracy, data integration, and data knowledge.” Integration and simplicity are more important than best of breed tools, because the market changes rapidly and the unknowns are both internal and external.

Making the technology core as simple and adaptable as possible, with widely used tools and integrated platforms, will make Suncorp more agile. Suncorp chooses partners who have a similar vision, even if their products don’t yet provide all the required features.

One such partner is Adobe. With Adobe Target, Adobe Analytics and Adobe Media Optimizer already deployed, Suncorp is investigating Adobe Marketing Cloud to provide a common core for marketing. For such a broad set of capabilities, Howe envisions implementing for a single brand, and then rolling out to others in baby steps as business demands.

Skills and Practices

As Suncorp invests in unlocking the value of data, and in digital marketing, skills are the key. These skills are sourced internally in part because of the scarcity of experienced applicants, and in part because business knowledge is so important. In Howe’s view, the overarching requirement for staff development is learned rather than bought capability.

Experimentation

Experimentation and innovation are crucial to the future health of a company. But it is hard for an organization that is operationally focused—and accomplished—to learn how to incubate. You need to carve out time, money, and staff to experiment and learn and fail. Howe cites the 70/20/10 model of learning and development as a useful tool for helping to focus effort and resources on capability change. In this model 70 percent of resources are dedicated to core business activities; 20 percent is focused on bringing new capabilities to scale, and 10 percent is focused on experimentation.

Experimentation and innovation are crucial to the future health of a company. But it is hard for an organization that is operationally focused—and accomplished—to learn how to incubate. You need to carve out time, money, and staff to experiment and learn and fail. Howe cites the 70/20/10 model of learning and development as a useful tool for helping to focus effort and resources on capability change. In this model 70 percent of resources are dedicated to core business activities; 20 percent is focused on bringing new capabilities to scale, and 10 percent is focused on experimentation.

Wisdom

Howe relies on his maturity model to formulate his investment plans. “You need to have a maturity model and a roadmap, and understand where you are. This tells you the two things you need to know: what initiative should be next, and how are you enabled with the capabilities to do it.”

“We move forward with repeated quick, small wins, with eyes on a grander plan,” says Howe. While he is gun-shy about huge projects, he is also careful not to compromise the integrity of his platform by accepting the wrong quick wins. A cheap, simple tool that satisfies one need for one line of business will in the long run cause great expense and complexity, and impede the organization’s agility.

“One of best ways to experiment and learn is to be organic. You don’t need the CEO’s permission to start.”