The need to accommodate customers' evolving needs and expectations -- often through untraditional partnerships and even "coopetition" -- isn't just a priority for insurance companies. It's also a priority for technology companies, management consultants and analyst firms. This is the context for a new alliance between The Nolan Company, a management consulting firm that specializes in process and operational effectiveness for insurance companies, and research and advisory firm Novarica. The two companies also announced that Chad Hersh, formerly managing director with Novarica, is joining the Nolan Company as senior vice president of its insurance practice. He will manage the alliance.
Hersh's focus will be on helping clients with business transformation, change enablement, process redesign, "and other areas that carriers often underinvest in when taking on system improvement projects," he said in a Nolan press release. "In my new role at Nolan, I will be ideally positioned to help carriers achieve the business value they are counting on when upgrading or replacing their core systems."[Previously from Hersh: 4 Drivers Behind the Increasing Popularity of Alternative IT Delivery Models]
This is the "sweet spot" that the two firms are hoping to address in their new alliance, which will provide enhanced offerings to both firm's clients. "We believed there were synergies [between us], given complementary focuses of the two firms," says Matt Josefowicz, managing director, Novarica. Much of the IT strategy and vendor selection work that Novarica takes on "is related to some kind of process reengineering or process transformation work. We're asked to be involved in that but we're not organized to dive deeply into those kinds of projects," he explains. "We're not a traditional management consulting firm where we can do long-term process reengineering or process management projects. Nolan does lot of that kind of organizational work. It's a very reciprocal relationship for both firms. We already have joint clients."
Josefowicz also emphasizes, "Neither Novarica nor Nolan does implementation, so we are both completely neutral when it comes to IT services or vendors or platforms. That's an important criteria for us in working with any partner."
The two firms do have "numerous" clients in common, notes Rod Travers, executive vice president, The Nolan Company. "Our services are complementary, so we have informally referred business to each other in the past and that will continue," Travers says in an email to Insurance & Technology. " Going forward, when circumstances warrant, we will work jointly on client projects and opportunities -- capitalizing on the synergy of the deep research, solution provider knowledge, and advisory capabilities of Novarica and the operations, process design, and change management/implementation expertise of Nolan. … For example, if Novarica assists a client with a system selection, that client may need assistance with operationalizing that system and redesigning their processes to achieve the desired results from the new technology -- Nolan provides those services. Likewise if Nolan is helping a client redesign an underwriting function and part of that redesign involves finding new technology, Novarica can assist that client to find the right system for their needs. And along the way Nolan and Novarica can collaborate on critical content such as business and technical requirements, change roadmaps, and metrics that are essential to a successful business transformation initiative."
Insurance company CIOs continue to face challenges around obtaining and measuring meaningful ROI around IT investments, especially when it comes to the big core systems modernization efforts, Hersh notes. "So many of these transformation and process reengineering projects really are driven by or end up driving to a core systems transformation," whether a policy admin, claims, billing or underwriting system, he says. "It starts or end with process change, whether the company plans to do it or not."
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio