July 16, 2025 • 43 mins
In this episode of Insurance Unplugged, host Lisa Wardlaw and guest Steve Abel discuss the challenges and evolution of Software as a Service (SaaS) in the business landscape. They explore the symptoms of SaaS sprawl, the importance of data management, and the need for business leaders to trust their instincts when making technology decisions. The conversation also highlights the shift from traditional consulting to co-building solutions, emphasizing the value of collaboration between business and technology professionals. Steve shares insights on reclaiming the P&L in technology investments and the future of curated solutions versus custom solutions.
Takeaways
SaaS is facing significant challenges and may be considered broken.
The importance of understanding the right amount of SaaS for business needs.
Data management is critical in leveraging SaaS solutions effectively.
Business leaders should recognize symptoms of SaaS sprawl and prescription fatigue.
Trusting instincts is essential for making informed technology decisions.
The shift from consulting to co-building solutions is transforming the industry.
Reclaiming the P&L is crucial for assessing technology investments.
Curated solutions can be more effective than custom solutions.
Collaboration between business and technology professionals is key to success.
The future of technology in business lies in understanding and solving specific problems.
Sound Bites
"SaaS is broken or SaaS is dying."
"Don't give it away."
"You can swap them out."
"Why are we spending this much money?"
"Pay attention to your instincts."
"You seem like you do technology."
"Ask the hard questions."
"Trust your impressive instincts."
Chapters
00:00 Introduction to SaaS Challenges
03:09 The Evolution of SaaS and Its Impact
05:46 Identifying SaaS Sprawl and Its Symptoms
08:54 The Role of Data in SaaS Solutions
11:58 Recognizing Prescription Fatigue in Technology
15:04 The Importance of Instincts in Technology Decisions
18:00 The Shift from Consulting to Co-Building
21:05 Reclaiming the P&L in Technology Investments
24:08 Curated Solutions vs. Custom Solutions
27:11 The Future of Technology in Business
30:06 Call to Action for Business Leaders
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
Insurance. Unplugged in the hot seat where
the complex world of insurance is laid bare.
Hosted by Lisa Wardfall, this podcast promises an unfiltered
glimpse into the industry like never before.
Each episode invites you to listen in on the candid
conversations that usually happen behind Closed.
Boardroom doors. From deep dives with industry
(00:22):
leaders and thought leaders to innovative discussions with mind
shaping the future of insurance,we bring the most genuine talks.
Directly to your ears. Our guests take the hot seat
alongside me to explore the inner workings, challenges and
triumphs of the insurance world.If you've ever wondered what
goes on in the shadows of the insurance industry, from the
(00:43):
boardroom banter to the behind the scenes strategies, this is
your chance for a front row seat.
Prepare for unguarded, enlightening and engaging
discussions that cover every angle of insurance presented in
a way that's both insightful andaccessible.
Welcome to the conversation. Welcome to Insurance Unplugged
in the hot. Seat with Lisa Wardbaugh.
(01:07):
This episode of Insurance Unplugged is brought to you by
Oliver Wyman, Actuarial A-Team not just known for strategy, but
for solving what most strategy leaves behind.
In an industry full of bloated tech stacks and over promised
transformation, Oliver Wyman is doing something different.
Building curated solutions that actually execute.
(01:27):
Not platforms. Not pilots.
Outcomes. learnmore@oliverwyman.com. back
slash insurance. And now let's get into the
episode. Welcome to another episode of
Insurance Unplugged. I'm your host, Lisa Wardbaugh,
and joining me this time in the Hot Seat is Steven Abel.
Steve, I'm so excited to have you here.
(01:47):
Steve is the technology partner at Oliver Wyman Actuarial and is
joining us for a, I'll call it aspicy episode of In the Hot
Seat. We're going to turn up the heat
a little bit. What SAS broke and what business
leaders must rebuild. Steve and I have been having
this conversation, I'll say, forthe better part of five years.
(02:08):
And Steve, thank you. First of all, because I'm
starting to feel a little insanewhen I say on LinkedIn and it's
some of my thought leadership, SAS is broken or SAS is dying
and everyone just thinks I'm crazy.
Before we go into that prompt, because you and I have a lot to
talk about, do you mind introducing yourself to all of
our audience listeners and guests who may not otherwise
(02:30):
know you? Sure.
And thanks for having me here, Steven Abel.
I work for Oliver Wyman Actuarial and we are changing
the way not only that we think about technology and data as
actuaries and strategy professionals, we're changing
the way that our clients think about technology and data.
(02:54):
It's just too hard and expensivein the market and there are too
many companies that believe the software vendor or the SAS
vendor story, which might not bewhat they need for their
business. And so we want to reimagine
those conversations with our clients.
Well, I I think it's really. Interesting, right, Because I
(03:15):
mean, clearly Steve, like I was like one of the first people
that was like SAS and cloud and and by the way, you and I are
both, I would say technology evangelist, meaning I would say
that if we want to go back to crossing the chasm, we're
probably in the visionary evangelical side of that, which
for anybody who hasn't read thator thinks it's too, you know,
back when the Internet was coming out old to to resurface.
(03:36):
I think it's a great book, but what that means is Steve and I
probably share an aspirational like we want to be on the
cutting edge of things. But the lens that Steve and I
both share or I've discovered through the five years I worked
on and off of them as the we also break down the hype of it
and that the non bull part of itand say like, what can we really
(03:56):
use in tech? So I think, you know, it's
interesting to me about size andwhere we went with it, right?
So for me it was like tech trend.
If you implement size, your ROI,your total cost of ownership, it
was kind of like this decade of check boxes, you know.
And Steve, I want to ask you about that because what I've
(04:17):
seen having lived through that is the post I was like eating
good food. Maybe like the bloat, the
fragmentation, the drift, the operational drag.
I'm sure many CI OS will sit here and on their head the TCO
that didn't yield the ROI that we said when we were doing those
three-year, five year TCO implementation cost analysis.
(04:42):
What do you really see as the sprawl and historical sprawl
SASS and what do you think that the, if you will, the
prescription is to fix it? I like the analogy of a
prescription because it's like adrug, a little bit of it doesn't
do anything. Too much of it, it becomes
(05:03):
poison and the right amount achieves the business value.
And I'll share an interesting edge case.
A couple of years ago, I was talking with a technology leader
that was proud and he said he had says he had used software as
a service for every single business process to run this
(05:25):
business. And I politely asked him because
I was in his office, what are the several 100 IT professionals
working on? We have, we're sitting on an
entire floor of IT professionalsand they're all busy.
If, if you, if you've sassed everything out, what are they
(05:45):
working on? And he's like, oh, well, I, I
may have underestimated the costof integration and additional
customization because these providers weren't able to
customize around my business. As in my business evolved.
What worked for me in the beginning when I signed these
contracts didn't work as these processes changed and evolved my
(06:08):
business. And when software as a service
or large behemoth applications were the only choice, well, they
were the only choice. Now they're not.
Now it's possible to do development quickly at lower
price points. It's possible to hyper
(06:31):
personalized technology at, at again, accessible price points
to match your business process and to match what you you need
from your business. So this idea that I need to take
all the pills and the bottles offor SAS to, to get better might
be poisoning your organization. But the idea that I should be
(06:52):
thinking of software or even software as a service for
solving targeted business problems that are sort of
sustained over time. That's a good use of SAS.
A bad use of SAS is to say, hey,I don't understand acts about my
business and acts as a very large part of your business and
(07:15):
this acts part of my business isgoing to change a lot over time
so I'll just SAS this out well the way software as a service
works is it's not very customizable.
The reason these providers go inthis direction is they provide
something that they think will work for a bunch of clients.
And so if you're CFO or executive, that's that are
(07:39):
looking at these solutions. I'm not saying they're all bad
and never, never buy them, but I'm saying challenge these
vendors to give you something that's exactly what you need,
not too much and not too little.Yeah, I want to, I want to kind
of wait loop in on that, for it in on that, because there's two
things for me that when I started like unpacking this over
(08:02):
the last, you know, decade, thatreally started to resonate. 1
was the, because the kind of antithesis to what you were
saying is people started to like, I don't want to use hyper
personally as they started to hyper customize.
So it was like, well, I'm going to get what I want and I'm going
to get it around the SAS tool, which created all sorts of
integration, fatigue, bloat, regression.
(08:23):
You know, it was like you had somany bolt ONS and you couldn't
actually keep up. And then it was like in essence,
it was no longer as the SAS provider intended it to be.
That was kind of in corner #1 incorner #2 we had the size
companies being hyper rewarded. So their VCs, their investors,
(08:47):
their target market price point was on end to end platform
verticalization. So you went up monolithically
and you never went out. It was not micro service.
I mean, if I hear one more SAS platform tell me we're micro
service enabled, I'm like, yeah,but it's like once I get in, I
(09:08):
can't get out. They entrap you.
And I, I don't mean accidentally.
It's intentional by their business design.
So Steve, I think that juxtaposition in and I want to
kind of set the stage with you. We didn't have, in my mind a lot
of choice as this was being formed.
You were kind of like maintaining your old legacy
(09:29):
stuff, custom coding, which was expensive and it wasn't
necessarily repeatable and scalable.
Coming into this world where orchestration is becoming a
bigger thing, API started over indexing.
We can talk about that in a latelittle bit.
And then we had SAS over verticalizing in my opinion, you
(09:50):
know, ask how many SAS providers, they can go truly
headless, and then you'll get your answer right then and
there. So and then companies of course
saying, oh, wait, I didn't want it not to be what I wanted.
So then I started customizing ontop.
It kind of created like in my mind like a bad concoction,
right? How do you unpack that Whiz the
(10:10):
new and I'm going to call them the new era technology that
we're in with like a lot more enablement.
I think we've gotten a lot more mature on what micro services
are in the kind of that ability to your point at a price point
that can deliver what you want for your business.
I love the way you just so simply and articulately put
that. How do you offer the listeners
like a yeah, yeah, yeah, we know, but that means
(10:32):
customization or I can't do thaton top of this SAS thing.
Like how do they? How do they actually get the
recipe that works in your mind? I actually think it's pretty
simple. What's good for these companies
and is this idea and I, I don't know if trapping customers is
their business plan, but certainly retaining them is to
(10:56):
get data calculations and everything that your SAS
platform under one roof. So they'll want custody of your
data. They're going to put it in
unique formats that they may or may not give you access to.
And what happens then is it's hard to leave the fast provider.
The same thing happens with monolithic platforms is they you
(11:19):
move the data into these platforms and it's very hard to
get rid of these platforms because everything is attached
to the way the platform wants tothink about your data.
The way out is to think about your enterprise.
Data asset is being critical to running your enterprise as a
separate thing. Don't give it away.
(11:40):
And what that may mean is that you use the SAS provider for
something that they're good at. Maybe they perform particular
sets of calculations or they they do something with your data
that is not part of your secret sauce of your business.
Well, great. Use them for that, but then
(12:01):
always keep custody of your enterprise data and then you can
decouple or or lose your height affiliation with the SAS
provider. So you use them as long as you
need to use them. And when your business evolves
and you don't need that particular calculation or set of
calculations, or there's some provider that's better out
(12:21):
there, you can swap them out andit doesn't become a traumatic
experience. But this idea of being
thoughtful about your data turnsout to be a minor but monolithic
solve to to this this problem ofgiving everything away to these
(12:42):
vendors. So and, and I think that that's
so important. What are some examples where you
are seeing people? Because that's like a lot to
think through, right? Like it like if you just kind of
put it together and you're like,you know, clearly the, the
technology vendors aren't selling it.
The, the CI OS and enterprise architects and business
(13:05):
architects are all kind of deep in on these.
Like, you know, like you and I operate at the enterprise level,
right? Like we're not talking small
moms and pop shops, like we're talking pretty major
technologists. They're just kind of trying to
like give the business what theyneed and want quickly within the
fleet of cars that they have in the lot, right?
Like they're, they're they're kind of trying to keep it
(13:25):
together and we're all running numbers and and cost of any sort
of change is usually expensive. So how does somebody recognize
almost like I'll call it prescription fatigue, Like
what's the first catalyst catalytic moment that you're
like, yeah, they're recognizing it.
(13:45):
And then how do you, Because I think it would be interesting
for listeners to hear like, hey,that thing, like let's give name
to that thing that you're recognizing.
And then what do they do about it?
See, like how do they build their way out of this?
Like how do they kind of form a plan?
There are symptoms and they're not subtle. 1 is ACFO looks at
(14:08):
the price tag either historically or of building a
new thing and says this is a lot.
Why are we spending this much money?
It doesn't make sense for us to be spending this much money.
Problem 1. Symptom 2 is pain.
This is taking too long. Than it seems there are too many
(14:30):
steps. This seems too hard.
Symptom 3, all the consulting organizations are recommending
it, and I say that as a consultant.
Typically, if advisors are telling you that things are
really hard and expensive and they give you an answer that's
confusing, maybe that's not a very good answer.
(14:54):
Typically, if a vendor is telling you that, don't worry,
it's, it's confusing. If you write this large check, I
can solve this problem for you that that might not be the right
answer. So my advice is to pay attention
to your instincts. If your instincts are this
doesn't make sense, I don't understand this.
This is too expensive or this seems to be too many steps.
(15:17):
It probably is. As a matter of fact, part of
what we're working with clients are is sort of new data
literacy. We're training clients to hone
their instincts on. Pay attention to your business.
Technology is not this outside thing that you can't possibly
(15:37):
understand. Technology is becoming more and
more accessible and this idea that there are these
specialists, that no one understands their language that
go off into a dark dungeon for ayear to build your solution.
That may have been true 10 yearsago.
It's certainly not true today. And if you're not able to go and
(15:58):
talk to your CTO or CIO or consulting advisor and
understand the conversation, then I don't know that you're
having the right conversation. Yeah, I think those are really
important. And you know, I kind of always
joke with people because a lot of times people say like you
became so technical and I'm like, I became basically
(16:21):
literate in things where I was being tired of talked over.
Do you know what I mean? Seems like, dear boy, there's so
many things that help you break things down now and analyze
things and interrogate things and speak fluently about things.
And you don't like, not only do you not have to code, but you
don't have to be raised as a technologist to talk at or on
(16:45):
par of the level of technology. So like I think it goes both
ways. Like to your point about if
they're talking in a complicatedway, it's probably not right.
But I also think a lot of business people or my
experience, because I grew up onthat side of the house, I think
a lot of business people excuse it like a foreign language that
they're not fluent in. And my advice to business
leaders is you can like or quoteRosetta Stone that it's just
(17:09):
dialect, it's just words and allof those words, you know, like
you can record a lot of things on some sort of a, a proper
allowed for a recording device and you can throw it into, you
know, a, you know, a natural language processor and you can
comprehend and say, explain thatto me in a business framework.
So even if your technologist isn't doing that, I feel like a
(17:30):
lot of business people can do that, Steve.
And I think that a lot of the ways that I've seen, because I
want to talk to you about what'snext, but I think a lot of the
success comes from people who, to your point, refuse to not
listen to their instincts. It's like, no, I'm a business
person. My instincts are telling me
this. And I think being a little
(17:53):
almost, I'll use the word like dogmatic or insistent about your
instincts because you will be glazed.
You will be, you know, all the words gas lit.
You'll be made to feel like you're insane.
Maybe you are welcome. Steve and I are happy to, like
take you if, you know, if you'relike, yeah, yeah, I feel insane.
Call us. We, we, we, we live in that
world. But I think that there's so much
of that that goes on that peoplelose their almost will to like,
(18:16):
comprehend it. And I guess my thing for
business people is like, you don't get to sell on sideline
and claim excusisms either. Would you agree with that?
I I would, and I think I've shared the story with you
before. They'll share it with their
group. Now the thing that got me with
feeling on my digital journey, managing digital practices.
(18:37):
I used to do finance transformation, actual
transformation. And a well known CFO of a large
insurance carrier asked me, he said why on earth are these
programs so expensive and why doI have to do them every decade?
And I didn't answer him immediately.
I thought about it and I thoughthe's that feedback is incredibly
(18:59):
profound. We've accepted as just a matter
of course that something should just be expensive.
If you're implementing a claim system or something for finance
or you're doing something, why shouldn't that be a multi year
journey? Why shouldn't that involve many,
many zeros in terms of what you pay for that?
(19:20):
And what I've discovered over the last 10 years is it doesn't
need to cost that much. It doesn't need to take that
much time. What the CFO taught me in that
moment was to challenge the assumptions, to challenge my own
instincts. Because I as a practitioner that
that used to configure this technology in the back of my
(19:44):
mind, it just always bothered me.
I'm like, how on earth? Why on earth is this all so
expensive? Why are these SAS solutions so
unwieldy and hard to configure? So I got taught to listen to my
own instincts. So I'm just passing that good
advice along to the people that are listening today.
I love that Steve and I think that there's there's an
(20:05):
interesting other side to this, which is I think a lot of people
right, wrong or indifferent. We all know one of the reasons
like my hypothesis. I'm curious to know your thought
on this. One of the reasons why we may or
may not have accepted this bloatand what seemingly time
consuming and expensive and disruptive is because the other
(20:27):
spectrum of that is tech that doesn't scale because at the end
of the day, right? But you and I are talking about
are things that are not widgets and bolt on.
I mean, we, we work in an industry that's on its
principle, simple, but the devilis in the details like the
calculations and the way in which we run our, you know,
(20:50):
making intangible, tangible is what I'd like to say about
insurance, right? It is inherently, you know, I'll
say a financial model technologist is Nirvana because
it is inherently complicated at all the concoctions we can
yield. That's actually my favorite
thing about insurance, if I'm being honest with you.
So I think the opposite side of maybe our instinct was this
(21:14):
robot in the other corner punching at scale and
reliability and credibility and of course, not to mention
governance and all the things because I mean, Stevie and I
both come from, you know, publicaccounting consulting
backgrounds as well, right? And so I think also like, until
recently, that scalability risk was as profound as the bloat.
(21:37):
Would you agree with that? I would and couple of things are
changing. The 1st is the class of tooling
is robust and very inexpensive, whether that's AI tooling or
that's just general purpose datastorage in the cloud.
They didn't used to be all that robust.
(21:57):
There's technology terms like containerization where you you
put like a little wrapper aroundsomething.
So it will work in different types of environments.
We used to worry about that typeof technology because we'd say,
well, it wants scale. But now even that type of
technology will scale to millions and millions of
(22:17):
transactions. So I I think there are very few
companies that can break these modern tools and these modern
architectures. And then back to this idea,
something that is changing now is with technology becoming more
accessible and easier to use andfaster to use, there's a
reconvergence of business professionals and technology
(22:39):
professionals being part of the same conversation and that
different conversations. When I'm experienced enough,
when I started my career, I would have a conversation with a
business person and they would ask me to build something.
And then I would get a small team together and we'd build it.
And handful of days or weeks later, we all looked at it and
then decided what we wanted to change or build together.
(23:02):
And we understood business problems, we solved for them.
Things were not terribly expensive or hard to build.
And then we got this era where we had people not talking to
each other. So the person coding something
never met the person with the business problem.
And then we wondered why things got expensive and hard.
(23:25):
It's because people weren't communicating with each other.
And at best, they were communicating with each other
through really, really hard to understand Word documents full
of like pictures and words and documents on steroids.
And it was the epitome of the telephone game.
There might have been four or five levels of telephone before
(23:46):
the person doing the work. And at no point maybe was the
real business problem articulated in a way that was
clear to the person doing the the coding.
And now we're finding that especially at Oliver Wyman
Actuarial, we bring our professionals in to talk
directly with the people doing the coding and our professionals
(24:09):
talk directly with the client. So at worst, we're one or two
telephones away from the work. At best we're zero that that's
that's part of a combined conversation with a client.
And amazingly, things are cheaper and faster when we do it
that way. We don't require thousands of
pages of pictures and diagrams. We just put appropriate audit
(24:34):
documentation in place, appropriate process document in
place, not all sorts of documentation that is put in
place of human communication, which is in, in my experience,
quite good if we allow ourselvesto communicate right.
I love that. Not, not that you and I have
ever had this conversation, but in one of my CX transformation
(24:55):
roles, I eliminated business requirement docs and requirement
docs And my technology team got so mad at me.
And I was like, you're going to have to go talk to people.
And I'm not going to allow you to have it in these giant tear
point like Word documents and all that.
And I'm going to make that person sit beside you when
(25:16):
you're showing like what you're doing.
And I, I think especially in a world that's really heavily
calculation oriented, if you really think about what we do,
our world is so much decisions, risk, acceptance, calculation,
outcome oriented that I think it's hard to capture that.
And there's also like fatigue ofall that.
(25:39):
So I, I think that's really smart that you also ended up
there. I want to know, OK, inquiring
lines, want to know if SAS accumulation created, I'll say
unintended noise, like accidentally we ended up here.
What replaces it? So like talk to me a little bit
about curated, not custom, purpose built execution layers,
(26:02):
not platforms, but patterns. Can you kind of like share with
us your thinking on that for theaudience?
Something I regularly ask clients to do is have some hard
conversations with your vendors and and don't assume so if you
go to the marketplace and say I'd like someone to get me a
(26:23):
widget that can turn PDF documents into data, I don't
know. That's a common thing people ask
for and do it in a secure way. So I'm not sending my data to
some third party who knows what they're going to do with that
data. So how do I do that in my
environment? They're going to have a lot of
vendors that'll say, well, send me all your PDF documents and
(26:44):
I'm going to do that. And then they do the traditional
thing because they want to keep you.
What I say instead is only ask for the one thing that you need.
If you need a calculation that sits on top of your data store,
ask the vendor for the calculation.
That's it. And they're going to sell you a
lot more and say, I don't want to buy it a lot more.
(27:05):
I just want to buy the one thing.
And my clients are often incredibly surprised that
vendors are really willing to dothat because the SAS landscape
and the vendor landscape has people a little afraid.
And the competition is ramping up between not just vendors
amongst themselves, but between shops that are saying maybe I
(27:28):
don't need to buy all this SAS solutions, Maybe I can do some
of this myself. And so these vendors are hungry
to add value and to maintain their business model.
If you're a customer, leveragingthat hunger to get exactly what
you need and no more and no lessis a really smart thing to do
(27:49):
and pays huge dividends in the end.
Yeah, and I love that you say tolike, you have to know what the
one thing you want is. So I love that framing on both
sides. I love the, I'll call it the
appropriate gumption to ask and the resilience to know so many
people. And I'm not being rude, but so
many people buy tech and they know they need like a thing, but
(28:12):
they may not be able to get to that.
I need this one calculation, which I used to call it
composing and decomposing tax, Steve, like for lack of better,
you know, phrasing, I was like, you're only going to buy that
little widget, that little Lego block that you actually need.
Because to your point, you're assembling this other thing in
your enterprise. And that thing in your
enterprise might only need that calculation logic or that
(28:34):
calculation engine or whatever. That is right?
And I got to tell you, as our consultants regularly are called
in to do, is to help a client tofind that problem.
Yeah. So how does that work?
Like how does that work when they get called in?
How does how do they go through that?
Normally it will start with sortof an amorphis problem or
symptoms and a client will say, I, I don't know how to, I can
(28:56):
describe my outcome, but I can'tdescribe my problem.
Can you help me? And what we love to do is come
in and clarify that nugget of the thing you need for the
problem you're solving. And then more often than not,
maybe teaching the client to do that themselves or how to build
it or how to source it in the marketplace.
(29:17):
And then we leave. That's an excellent way to use
outside expertise is if you're having a hard time
crystallizing, what's the one thing I want to buy in the
marketplace? What's, how do I, how do I take
this really expensive thing and make it cheaper?
Well, we do that all the time. And that is a service we love to
do because we're not permit consultants staying there for
(29:40):
years and years. We're solving these, we're
helping identify these targeted opportunities or problems.
And then it it allows our clients to to with confidence go
to a vendor landscape or or go, go somewhere and say, I want
this one thing, but all these other things you're trying to
sell me, I'm not terribly interested.
(30:02):
Thank you. Yeah, not to listen.
I want to get into the reclaiming the P&L next in our
next segment. I've been after this thesis for
a while, So heads up our procurement officers and our CF
OS and our CI OS and the controllers working in
technology that there is also not only is there bloat in the
SAS stack, see, but there's bloat in redundancy of
(30:23):
repetitive things you're asking each stack in it of itself to
do. So let's see, let's just think
geocoding is like an example forthis, because you know, you and
I did a. Good example.
Geocoding. OK, so every geospatial outcome,
whether you're buying satellite imagery, Lidar, you know, SAR,
(30:44):
whatever you're buying, every single person that does anything
to do with satellite at all has to do this thing called
geocoding. And so you, the company, I
figured this out and I was like,who?
You, the company have a redundancy load of 20 to 30% in
every stock you buy, if you buy the outcome and not the point
(31:07):
solutions team, because guess what, they're all geocoding it.
And so I in that situation, I couldn't just get the
calculation. I needed the like thing.
And so I say, hold on, I'll do the enterprise geocoding.
I'll send you a, if you will, a data file with a geocoded data
input and you will not geocode my data file and you will just
(31:29):
do the processing with my, you know, my, My Portfolio, my
investments, whatever it is. So I think, see what we don't
real. And then by the way, my price is
locking down, right? How I think that's a really
interesting like reclaiming the piano because I think part of
what we're after is not just thetack, it's also the business
(31:50):
sanctity and sanity as saying I'm going to manage my PNL for
business related outcomes. So if we move from diagnosis to
direction, if I am ACFO Chief Procurement Officer, C0 0PN L
owner listening, how do I assesswhere my current stock might be
bleeding value And what is that intuitive lens Steve that I can
(32:13):
go after? Hey, we may have overbought, we
may be under executing and theremight be redundancy.
Even if I want to keep all the bells and whistles that I have
today because I often hear like I don't want to give up the
bells and whistles. How do I think about that?
Again, I think the answer is relatively simple.
Now executing on it is hard and this started 25 years ago for me
(32:38):
and I was managing the time which is called shared services
departments that did these functions.
And I asked a wizard leader in that function, how do you size
these things? And he said, well, you keep
asking for efficiencies and increase utility until it stops
(32:59):
and then you back off a little bit.
So if you're ACFO demand of yourbusiness that they take out cost
and if you're ACEO demand your business accelerate revenue and
don't accept no for an answer because again, if your answer is
really complicated and involves a dog eating their homework and
all that, maybe that's not a very good answer.
(33:20):
And that pressure on the organization will cause people
to ask hard questions, will cause people to really examine
some things they never thought about.
So if you're talking about technology, most technology
leaders will say most of their calories are spent maintaining
stuff that they already bought. Why?
(33:42):
That's an interesting hard question like why is that?
And is that maybe the most important thing you should be
thinking about for cost management if you're a
technology professional is stuffthat's not related to new
projects spent? Why is that not your number one
priority? And again, it's a hard question
(34:03):
that rarely gets asked because you, you go to these companies
and, and, or I've been part of these companies and you,
everyone thinks long and hard about new technology that
you're, or an, or a new thing that you're doing.
And there's multiple layers of governance, but the old stuff,
no, no governance whatsoever. It's like, oh, I, I spent $20
(34:24):
million last year. I've spent $20 million this next
year. My.
Favorite is like there was a CIOat a company that I worked at
that said, well, like you got what you know, you basically got
what you asked for, you know, interms of the maintenance cost.
I'm like, hold on. You're saying that to people out
there like earning money and then driving revenue.
Like that's probably not the wayyou should be responding to
(34:46):
that. But I think it's an interesting
almost like you started this conversation, Steve.
It's an interesting level of acceptance that we've come to
become also comfortable with when you shouldn't be
comfortable, I think is what you're describing like you
should not be comfortable with that level of acceptance when
(35:06):
you can't fuel new things for the business because keeping the
lights on cost X. And if somebody just says to
you, well that's what it is. I think what you're saying is
challenge that through the gauntlet.
When it's interesting, I was talking about 3 years ago to a
founder and he said something that just stuck with me.
He said, Steve, that I was complimenting him on this great
company he had built. You seem like you do technology.
(35:29):
And I said, I try. And he said when I started three
years ago, I had four people that did technology.
And I don't know what happened but I checked the other day it
is 175 and I had no idea what they're all working on and it's
so common and then. It's really.
And then the, the answer tends to be, well, I, I would be too
(35:52):
hard for me to explain that to you.
Make them explain what everyone is working on because those will
be really interesting conversations and that would be
my advice. All right, so Steve, let's name
this shift because I want to talk a little bit about what
you're doing at Oliver Wyman Actuarial because you hear the
no disrespect, you have the nameactuarial and you're like, OK,
(36:14):
you don't necessarily think of Co build and kind of reinventing
business directly. So you're moving from advising,
I'll call it consultatively out of the PowerPoint into into the
Ring of Fire, which is Co building.
Why was this necessary? Because I find the business
model fascinating. Clearly I'm a fan of it.
(36:36):
I love it. It's a very big North star for
me in terms of like signals. What are you all enabling that
P&L owners couldn't get before and how are you doing it?
Because I, I love the kind of connection of this conversation
like that intuition being ignited, helping kind of see
through the fuzzy, creating clarity on it, knowing what the
(36:58):
one thing you need to ask for isand not being alcohol, you know,
permanent consultants talk to usabout that.
I think this is a fascinating like extension of the business
model. So I'll answer it in two parts.
The 1st is the question you didn't ask, but is probably top
of mind. Why actuaries in technology, It
turns out that to be an actuary takes a tremendous amount of
(37:21):
grip to become credentialed. There's these exams that you
take. So it's a factory to distill
practitioners that just have grit that are that are they're
going to work on a problem untilthey get that problem solved.
And people that like to solve problems tend to gravitate
towards that field. The secret sauce in the emerging
(37:44):
the new world of technology is the ability to define and solve
problems. And we have companies that are
full of coders and engineers andarchitects, but not problem
solvers. And we have business
practitioners that know how to run their business but might not
be the best technology problem identifiers or solvers.
(38:06):
And by upskilling our actuaries so that they can sit between the
business and the hardcore technologists has unlocked
tremendous amounts of value. And I've got to admit, initially
it started kind of as an experiment.
We didn't know, we said are are we going to be solving small
(38:27):
problems or large problems. And it turns out that we're
doing small problems, but we're also tackling some of the
largest problems in the industryand we're doing it really well
and we're doing it at orders of magnitude faster and better.
And there is an interesting story that goes along with that.
I have a client that wanted to build an AI thing.
(38:47):
I won't go into what The thing is.
And they talked to an engineering firm and the
engineering firm told them, well, I can build an MVP, which
means just a thing that doesn't really do the thing, but it's
enough of it that you can tell what it should be.
I. Think it doesn't really exist
but kind of pretend it's beyond a demo maybe?
And they said to do that, it's going to be at least $3,000,000,
(39:08):
maybe $5 million. And I talked to the same client
and they were frustrated And there was, there was sort of
this angry thing. And this is, and they were
telling me This is why they can't do AI.
And I said, would you be interested in talking to one of
her actuarial practitioners? And I said, well, why?
And I said, I, I don't know. I, I bet they could come up with
another answer. And we engineered this meeting
(39:29):
and between the point where we scheduled the meeting and we had
the meeting, this actuarial practitioner in a handful of
days went ahead and built the MVP.
And it's just a handful of days worth of work did not require
$3,000,000. And in the process of building
the MVP designed a, a quasi training technique for, for AI
(39:52):
that might be not new or patentable.
And I was pretty impressed. I was like, well, that's I, I
didn't think of that. But that everyday innovation is
something that we're seeing moreand more and it's building upon
ourselves. Now we have a community of
practitioners that are all getting up skilled and learning
from each other in that role of problem solver and understanding
(40:14):
person of technology. We're able to solve significant
problems at very different pricepoints and speeds that are
frankly delighting our clients. And it's an exciting time to be
working with our clients and to be in the industry.
I, I mean, I think it's so, so amazing, right?
Because to me, it's really not retooling, but it really gets at
(40:35):
how do we reconcile the businesswith itself, which is something
that I think we kind of lost sight of as we went deep into
the size world. So, Steve, clearly we could talk
forever, but as we can start to bring this to a roundup, you
know, being in the hot seat, youget to answer the kind of three
call to action questions. What is something in your call
(40:56):
to action that you would ask everyone still listening to us
to start doing, stop doing, and continue to do?
So start asking the hard questions.
If you're not asking the hard questions, stop assuming
everything is going to be hard or expensive or unknowable.
(41:17):
Continue trusting your instincts.
They got you there. Probably every one of our
listeners are impressive people that have had impressive lives
and impressive careers. So trust your impressive
instincts. That's my advice.
I love that. I always love how you just frame
it so, so articulately. So for any of our listeners that
(41:39):
do not follow Steve on LinkedIn,please follow him.
Please follow all the work that Oliver Wyman Actuarial is doing
and say to you, Steven. Now I'm like really curious
about this AI solution. I feel like I want to see it in
action. Maybe we can maybe once it's
released, we can have a little post showcase of it.
But super excited to see how youare, you know, really living
(42:03):
what you said to me again, probably five years ago, You
know, Lisa, all this stuff that we're building, all this size
engines, we could just do this in the cloud.
We we were talking ERP. We could do debits and credits
and get this stuff done. And I love seeing you fulfill
what you knew to be instinctively and directly
correct. So thank you for being a guest
(42:24):
today. Lisa, thank you.
And it's it's humbling to work alongside such amazing
practitioners and appreciate youhaving me here.
Of course. All right, So for all of our
listeners, continue to stay tuned, stay informed and stay
curious until next time on Insurance Unplugged.
Thank you, Steve. Thanks, Lisa.
(42:46):
Thanks for listening to another episode of Insurance Unplugged.
If this episode. Pushed your thinking or gave you
words for something you've been sensing?
Thank Oliver Wyman Actuarial. They're not just sponsoring this
season, they're proving every day that business LED tech isn't
a mess. It just needs to be built by
people who understand both sidesof the table.
For more from the team that's Cobuilding execution, not just
(43:09):
advising on it, head to oliverwyman.com.
Back slash insurance and stay tuned because the next collapse
is already underway and we'll behere naming it.
Thank you.
Insurance. Unplugged in the hot seat where
the complex world of insurance is laid bare.
Hosted by Lisa Wardfall, this podcast promises an unfiltered
glimpse into the industry like never before.
Each episode invites you to listen in on the candid
conversations that usually happen behind Closed.
Boardroom doors. From deep dives with industry
(00:22):
leaders and thought leaders to innovative discussions with mind
shaping the future of insurance,we bring the most genuine talks.
Directly to your ears. Our guests take the hot seat
alongside me to explore the inner workings, challenges and
triumphs of the insurance world.If you've ever wondered what
goes on in the shadows of the insurance industry, from the
(00:43):
boardroom banter to the behind the scenes strategies, this is
your chance for a front row seat.
Prepare for unguarded, enlightening and engaging
discussions that cover every angle of insurance presented in
a way that's both insightful andaccessible.
Welcome to the conversation. Welcome to Insurance Unplugged
in the hot. Seat with Lisa Wardbaugh.
(01:07):
This episode of Insurance Unplugged is brought to you by
Oliver Wyman, Actuarial A-Team not just known for strategy, but
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In an industry full of bloated tech stacks and over promised
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Building curated solutions that actually execute.
(01:27):
Not platforms. Not pilots.
Outcomes. learnmore@oliverwyman.com. back
slash insurance. And now let's get into the
episode. Welcome to another episode of
Insurance Unplugged. I'm your host, Lisa Wardbaugh,
and joining me this time in the Hot Seat is Steven Abel.
Steve, I'm so excited to have you here.
(01:47):
Steve is the technology partner at Oliver Wyman Actuarial and is
joining us for a, I'll call it aspicy episode of In the Hot
Seat. We're going to turn up the heat
a little bit. What SAS broke and what business
leaders must rebuild. Steve and I have been having
this conversation, I'll say, forthe better part of five years.
(02:08):
And Steve, thank you. First of all, because I'm
starting to feel a little insanewhen I say on LinkedIn and it's
some of my thought leadership, SAS is broken or SAS is dying
and everyone just thinks I'm crazy.
Before we go into that prompt, because you and I have a lot to
talk about, do you mind introducing yourself to all of
our audience listeners and guests who may not otherwise
(02:30):
know you? Sure.
And thanks for having me here, Steven Abel.
I work for Oliver Wyman Actuarial and we are changing
the way not only that we think about technology and data as
actuaries and strategy professionals, we're changing
the way that our clients think about technology and data.
(02:54):
It's just too hard and expensivein the market and there are too
many companies that believe the software vendor or the SAS
vendor story, which might not bewhat they need for their
business. And so we want to reimagine
those conversations with our clients.
Well, I I think it's really. Interesting, right, Because I
(03:15):
mean, clearly Steve, like I was like one of the first people
that was like SAS and cloud and and by the way, you and I are
both, I would say technology evangelist, meaning I would say
that if we want to go back to crossing the chasm, we're
probably in the visionary evangelical side of that, which
for anybody who hasn't read thator thinks it's too, you know,
back when the Internet was coming out old to to resurface.
(03:36):
I think it's a great book, but what that means is Steve and I
probably share an aspirational like we want to be on the
cutting edge of things. But the lens that Steve and I
both share or I've discovered through the five years I worked
on and off of them as the we also break down the hype of it
and that the non bull part of itand say like, what can we really
(03:56):
use in tech? So I think, you know, it's
interesting to me about size andwhere we went with it, right?
So for me it was like tech trend.
If you implement size, your ROI,your total cost of ownership, it
was kind of like this decade of check boxes, you know.
And Steve, I want to ask you about that because what I've
(04:17):
seen having lived through that is the post I was like eating
good food. Maybe like the bloat, the
fragmentation, the drift, the operational drag.
I'm sure many CI OS will sit here and on their head the TCO
that didn't yield the ROI that we said when we were doing those
three-year, five year TCO implementation cost analysis.
(04:42):
What do you really see as the sprawl and historical sprawl
SASS and what do you think that the, if you will, the
prescription is to fix it? I like the analogy of a
prescription because it's like adrug, a little bit of it doesn't
do anything. Too much of it, it becomes
(05:03):
poison and the right amount achieves the business value.
And I'll share an interesting edge case.
A couple of years ago, I was talking with a technology leader
that was proud and he said he had says he had used software as
a service for every single business process to run this
(05:25):
business. And I politely asked him because
I was in his office, what are the several 100 IT professionals
working on? We have, we're sitting on an
entire floor of IT professionalsand they're all busy.
If, if you, if you've sassed everything out, what are they
(05:45):
working on? And he's like, oh, well, I, I
may have underestimated the costof integration and additional
customization because these providers weren't able to
customize around my business. As in my business evolved.
What worked for me in the beginning when I signed these
contracts didn't work as these processes changed and evolved my
(06:08):
business. And when software as a service
or large behemoth applications were the only choice, well, they
were the only choice. Now they're not.
Now it's possible to do development quickly at lower
price points. It's possible to hyper
(06:31):
personalized technology at, at again, accessible price points
to match your business process and to match what you you need
from your business. So this idea that I need to take
all the pills and the bottles offor SAS to, to get better might
be poisoning your organization. But the idea that I should be
(06:52):
thinking of software or even software as a service for
solving targeted business problems that are sort of
sustained over time. That's a good use of SAS.
A bad use of SAS is to say, hey,I don't understand acts about my
business and acts as a very large part of your business and
(07:15):
this acts part of my business isgoing to change a lot over time
so I'll just SAS this out well the way software as a service
works is it's not very customizable.
The reason these providers go inthis direction is they provide
something that they think will work for a bunch of clients.
And so if you're CFO or executive, that's that are
(07:39):
looking at these solutions. I'm not saying they're all bad
and never, never buy them, but I'm saying challenge these
vendors to give you something that's exactly what you need,
not too much and not too little.Yeah, I want to, I want to kind
of wait loop in on that, for it in on that, because there's two
things for me that when I started like unpacking this over
(08:02):
the last, you know, decade, thatreally started to resonate. 1
was the, because the kind of antithesis to what you were
saying is people started to like, I don't want to use hyper
personally as they started to hyper customize.
So it was like, well, I'm going to get what I want and I'm going
to get it around the SAS tool, which created all sorts of
integration, fatigue, bloat, regression.
(08:23):
You know, it was like you had somany bolt ONS and you couldn't
actually keep up. And then it was like in essence,
it was no longer as the SAS provider intended it to be.
That was kind of in corner #1 incorner #2 we had the size
companies being hyper rewarded. So their VCs, their investors,
(08:47):
their target market price point was on end to end platform
verticalization. So you went up monolithically
and you never went out. It was not micro service.
I mean, if I hear one more SAS platform tell me we're micro
service enabled, I'm like, yeah,but it's like once I get in, I
(09:08):
can't get out. They entrap you.
And I, I don't mean accidentally.
It's intentional by their business design.
So Steve, I think that juxtaposition in and I want to
kind of set the stage with you. We didn't have, in my mind a lot
of choice as this was being formed.
You were kind of like maintaining your old legacy
(09:29):
stuff, custom coding, which was expensive and it wasn't
necessarily repeatable and scalable.
Coming into this world where orchestration is becoming a
bigger thing, API started over indexing.
We can talk about that in a latelittle bit.
And then we had SAS over verticalizing in my opinion, you
(09:50):
know, ask how many SAS providers, they can go truly
headless, and then you'll get your answer right then and
there. So and then companies of course
saying, oh, wait, I didn't want it not to be what I wanted.
So then I started customizing ontop.
It kind of created like in my mind like a bad concoction,
right? How do you unpack that Whiz the
(10:10):
new and I'm going to call them the new era technology that
we're in with like a lot more enablement.
I think we've gotten a lot more mature on what micro services
are in the kind of that ability to your point at a price point
that can deliver what you want for your business.
I love the way you just so simply and articulately put
that. How do you offer the listeners
like a yeah, yeah, yeah, we know, but that means
(10:32):
customization or I can't do thaton top of this SAS thing.
Like how do they? How do they actually get the
recipe that works in your mind? I actually think it's pretty
simple. What's good for these companies
and is this idea and I, I don't know if trapping customers is
their business plan, but certainly retaining them is to
(10:56):
get data calculations and everything that your SAS
platform under one roof. So they'll want custody of your
data. They're going to put it in
unique formats that they may or may not give you access to.
And what happens then is it's hard to leave the fast provider.
The same thing happens with monolithic platforms is they you
(11:19):
move the data into these platforms and it's very hard to
get rid of these platforms because everything is attached
to the way the platform wants tothink about your data.
The way out is to think about your enterprise.
Data asset is being critical to running your enterprise as a
separate thing. Don't give it away.
(11:40):
And what that may mean is that you use the SAS provider for
something that they're good at. Maybe they perform particular
sets of calculations or they they do something with your data
that is not part of your secret sauce of your business.
Well, great. Use them for that, but then
(12:01):
always keep custody of your enterprise data and then you can
decouple or or lose your height affiliation with the SAS
provider. So you use them as long as you
need to use them. And when your business evolves
and you don't need that particular calculation or set of
calculations, or there's some provider that's better out
(12:21):
there, you can swap them out andit doesn't become a traumatic
experience. But this idea of being
thoughtful about your data turnsout to be a minor but monolithic
solve to to this this problem ofgiving everything away to these
(12:42):
vendors. So and, and I think that that's
so important. What are some examples where you
are seeing people? Because that's like a lot to
think through, right? Like it like if you just kind of
put it together and you're like,you know, clearly the, the
technology vendors aren't selling it.
The, the CI OS and enterprise architects and business
(13:05):
architects are all kind of deep in on these.
Like, you know, like you and I operate at the enterprise level,
right? Like we're not talking small
moms and pop shops, like we're talking pretty major
technologists. They're just kind of trying to
like give the business what theyneed and want quickly within the
fleet of cars that they have in the lot, right?
Like they're, they're they're kind of trying to keep it
(13:25):
together and we're all running numbers and and cost of any sort
of change is usually expensive. So how does somebody recognize
almost like I'll call it prescription fatigue, Like
what's the first catalyst catalytic moment that you're
like, yeah, they're recognizing it.
(13:45):
And then how do you, Because I think it would be interesting
for listeners to hear like, hey,that thing, like let's give name
to that thing that you're recognizing.
And then what do they do about it?
See, like how do they build their way out of this?
Like how do they kind of form a plan?
There are symptoms and they're not subtle. 1 is ACFO looks at
(14:08):
the price tag either historically or of building a
new thing and says this is a lot.
Why are we spending this much money?
It doesn't make sense for us to be spending this much money.
Problem 1. Symptom 2 is pain.
This is taking too long. Than it seems there are too many
(14:30):
steps. This seems too hard.
Symptom 3, all the consulting organizations are recommending
it, and I say that as a consultant.
Typically, if advisors are telling you that things are
really hard and expensive and they give you an answer that's
confusing, maybe that's not a very good answer.
(14:54):
Typically, if a vendor is telling you that, don't worry,
it's, it's confusing. If you write this large check, I
can solve this problem for you that that might not be the right
answer. So my advice is to pay attention
to your instincts. If your instincts are this
doesn't make sense, I don't understand this.
This is too expensive or this seems to be too many steps.
(15:17):
It probably is. As a matter of fact, part of
what we're working with clients are is sort of new data
literacy. We're training clients to hone
their instincts on. Pay attention to your business.
Technology is not this outside thing that you can't possibly
(15:37):
understand. Technology is becoming more and
more accessible and this idea that there are these
specialists, that no one understands their language that
go off into a dark dungeon for ayear to build your solution.
That may have been true 10 yearsago.
It's certainly not true today. And if you're not able to go and
(15:58):
talk to your CTO or CIO or consulting advisor and
understand the conversation, then I don't know that you're
having the right conversation. Yeah, I think those are really
important. And you know, I kind of always
joke with people because a lot of times people say like you
became so technical and I'm like, I became basically
(16:21):
literate in things where I was being tired of talked over.
Do you know what I mean? Seems like, dear boy, there's so
many things that help you break things down now and analyze
things and interrogate things and speak fluently about things.
And you don't like, not only do you not have to code, but you
don't have to be raised as a technologist to talk at or on
(16:45):
par of the level of technology. So like I think it goes both
ways. Like to your point about if
they're talking in a complicatedway, it's probably not right.
But I also think a lot of business people or my
experience, because I grew up onthat side of the house, I think
a lot of business people excuse it like a foreign language that
they're not fluent in. And my advice to business
leaders is you can like or quoteRosetta Stone that it's just
(17:09):
dialect, it's just words and allof those words, you know, like
you can record a lot of things on some sort of a, a proper
allowed for a recording device and you can throw it into, you
know, a, you know, a natural language processor and you can
comprehend and say, explain thatto me in a business framework.
So even if your technologist isn't doing that, I feel like a
(17:30):
lot of business people can do that, Steve.
And I think that a lot of the ways that I've seen, because I
want to talk to you about what'snext, but I think a lot of the
success comes from people who, to your point, refuse to not
listen to their instincts. It's like, no, I'm a business
person. My instincts are telling me
this. And I think being a little
(17:53):
almost, I'll use the word like dogmatic or insistent about your
instincts because you will be glazed.
You will be, you know, all the words gas lit.
You'll be made to feel like you're insane.
Maybe you are welcome. Steve and I are happy to, like
take you if, you know, if you'relike, yeah, yeah, I feel insane.
Call us. We, we, we, we live in that
world. But I think that there's so much
of that that goes on that peoplelose their almost will to like,
(18:16):
comprehend it. And I guess my thing for
business people is like, you don't get to sell on sideline
and claim excusisms either. Would you agree with that?
I I would, and I think I've shared the story with you
before. They'll share it with their
group. Now the thing that got me with
feeling on my digital journey, managing digital practices.
(18:37):
I used to do finance transformation, actual
transformation. And a well known CFO of a large
insurance carrier asked me, he said why on earth are these
programs so expensive and why doI have to do them every decade?
And I didn't answer him immediately.
I thought about it and I thoughthe's that feedback is incredibly
(18:59):
profound. We've accepted as just a matter
of course that something should just be expensive.
If you're implementing a claim system or something for finance
or you're doing something, why shouldn't that be a multi year
journey? Why shouldn't that involve many,
many zeros in terms of what you pay for that?
(19:20):
And what I've discovered over the last 10 years is it doesn't
need to cost that much. It doesn't need to take that
much time. What the CFO taught me in that
moment was to challenge the assumptions, to challenge my own
instincts. Because I as a practitioner that
that used to configure this technology in the back of my
(19:44):
mind, it just always bothered me.
I'm like, how on earth? Why on earth is this all so
expensive? Why are these SAS solutions so
unwieldy and hard to configure? So I got taught to listen to my
own instincts. So I'm just passing that good
advice along to the people that are listening today.
I love that Steve and I think that there's there's an
(20:05):
interesting other side to this, which is I think a lot of people
right, wrong or indifferent. We all know one of the reasons
like my hypothesis. I'm curious to know your thought
on this. One of the reasons why we may or
may not have accepted this bloatand what seemingly time
consuming and expensive and disruptive is because the other
(20:27):
spectrum of that is tech that doesn't scale because at the end
of the day, right? But you and I are talking about
are things that are not widgets and bolt on.
I mean, we, we work in an industry that's on its
principle, simple, but the devilis in the details like the
calculations and the way in which we run our, you know,
(20:50):
making intangible, tangible is what I'd like to say about
insurance, right? It is inherently, you know, I'll
say a financial model technologist is Nirvana because
it is inherently complicated at all the concoctions we can
yield. That's actually my favorite
thing about insurance, if I'm being honest with you.
So I think the opposite side of maybe our instinct was this
(21:14):
robot in the other corner punching at scale and
reliability and credibility and of course, not to mention
governance and all the things because I mean, Stevie and I
both come from, you know, publicaccounting consulting
backgrounds as well, right? And so I think also like, until
recently, that scalability risk was as profound as the bloat.
(21:37):
Would you agree with that? I would and couple of things are
changing. The 1st is the class of tooling
is robust and very inexpensive, whether that's AI tooling or
that's just general purpose datastorage in the cloud.
They didn't used to be all that robust.
(21:57):
There's technology terms like containerization where you you
put like a little wrapper aroundsomething.
So it will work in different types of environments.
We used to worry about that typeof technology because we'd say,
well, it wants scale. But now even that type of
technology will scale to millions and millions of
(22:17):
transactions. So I I think there are very few
companies that can break these modern tools and these modern
architectures. And then back to this idea,
something that is changing now is with technology becoming more
accessible and easier to use andfaster to use, there's a
reconvergence of business professionals and technology
(22:39):
professionals being part of the same conversation and that
different conversations. When I'm experienced enough,
when I started my career, I would have a conversation with a
business person and they would ask me to build something.
And then I would get a small team together and we'd build it.
And handful of days or weeks later, we all looked at it and
then decided what we wanted to change or build together.
(23:02):
And we understood business problems, we solved for them.
Things were not terribly expensive or hard to build.
And then we got this era where we had people not talking to
each other. So the person coding something
never met the person with the business problem.
And then we wondered why things got expensive and hard.
(23:25):
It's because people weren't communicating with each other.
And at best, they were communicating with each other
through really, really hard to understand Word documents full
of like pictures and words and documents on steroids.
And it was the epitome of the telephone game.
There might have been four or five levels of telephone before
(23:46):
the person doing the work. And at no point maybe was the
real business problem articulated in a way that was
clear to the person doing the the coding.
And now we're finding that especially at Oliver Wyman
Actuarial, we bring our professionals in to talk
directly with the people doing the coding and our professionals
(24:09):
talk directly with the client. So at worst, we're one or two
telephones away from the work. At best we're zero that that's
that's part of a combined conversation with a client.
And amazingly, things are cheaper and faster when we do it
that way. We don't require thousands of
pages of pictures and diagrams. We just put appropriate audit
(24:34):
documentation in place, appropriate process document in
place, not all sorts of documentation that is put in
place of human communication, which is in, in my experience,
quite good if we allow ourselvesto communicate right.
I love that. Not, not that you and I have
ever had this conversation, but in one of my CX transformation
(24:55):
roles, I eliminated business requirement docs and requirement
docs And my technology team got so mad at me.
And I was like, you're going to have to go talk to people.
And I'm not going to allow you to have it in these giant tear
point like Word documents and all that.
And I'm going to make that person sit beside you when
(25:16):
you're showing like what you're doing.
And I, I think especially in a world that's really heavily
calculation oriented, if you really think about what we do,
our world is so much decisions, risk, acceptance, calculation,
outcome oriented that I think it's hard to capture that.
And there's also like fatigue ofall that.
(25:39):
So I, I think that's really smart that you also ended up
there. I want to know, OK, inquiring
lines, want to know if SAS accumulation created, I'll say
unintended noise, like accidentally we ended up here.
What replaces it? So like talk to me a little bit
about curated, not custom, purpose built execution layers,
(26:02):
not platforms, but patterns. Can you kind of like share with
us your thinking on that for theaudience?
Something I regularly ask clients to do is have some hard
conversations with your vendors and and don't assume so if you
go to the marketplace and say I'd like someone to get me a
(26:23):
widget that can turn PDF documents into data, I don't
know. That's a common thing people ask
for and do it in a secure way. So I'm not sending my data to
some third party who knows what they're going to do with that
data. So how do I do that in my
environment? They're going to have a lot of
vendors that'll say, well, send me all your PDF documents and
(26:44):
I'm going to do that. And then they do the traditional
thing because they want to keep you.
What I say instead is only ask for the one thing that you need.
If you need a calculation that sits on top of your data store,
ask the vendor for the calculation.
That's it. And they're going to sell you a
lot more and say, I don't want to buy it a lot more.
(27:05):
I just want to buy the one thing.
And my clients are often incredibly surprised that
vendors are really willing to dothat because the SAS landscape
and the vendor landscape has people a little afraid.
And the competition is ramping up between not just vendors
amongst themselves, but between shops that are saying maybe I
(27:28):
don't need to buy all this SAS solutions, Maybe I can do some
of this myself. And so these vendors are hungry
to add value and to maintain their business model.
If you're a customer, leveragingthat hunger to get exactly what
you need and no more and no lessis a really smart thing to do
(27:49):
and pays huge dividends in the end.
Yeah, and I love that you say tolike, you have to know what the
one thing you want is. So I love that framing on both
sides. I love the, I'll call it the
appropriate gumption to ask and the resilience to know so many
people. And I'm not being rude, but so
many people buy tech and they know they need like a thing, but
(28:12):
they may not be able to get to that.
I need this one calculation, which I used to call it
composing and decomposing tax, Steve, like for lack of better,
you know, phrasing, I was like, you're only going to buy that
little widget, that little Lego block that you actually need.
Because to your point, you're assembling this other thing in
your enterprise. And that thing in your
enterprise might only need that calculation logic or that
(28:34):
calculation engine or whatever. That is right?
And I got to tell you, as our consultants regularly are called
in to do, is to help a client tofind that problem.
Yeah. So how does that work?
Like how does that work when they get called in?
How does how do they go through that?
Normally it will start with sortof an amorphis problem or
symptoms and a client will say, I, I don't know how to, I can
(28:56):
describe my outcome, but I can'tdescribe my problem.
Can you help me? And what we love to do is come
in and clarify that nugget of the thing you need for the
problem you're solving. And then more often than not,
maybe teaching the client to do that themselves or how to build
it or how to source it in the marketplace.
(29:17):
And then we leave. That's an excellent way to use
outside expertise is if you're having a hard time
crystallizing, what's the one thing I want to buy in the
marketplace? What's, how do I, how do I take
this really expensive thing and make it cheaper?
Well, we do that all the time. And that is a service we love to
do because we're not permit consultants staying there for
(29:40):
years and years. We're solving these, we're
helping identify these targeted opportunities or problems.
And then it it allows our clients to to with confidence go
to a vendor landscape or or go, go somewhere and say, I want
this one thing, but all these other things you're trying to
sell me, I'm not terribly interested.
(30:02):
Thank you. Yeah, not to listen.
I want to get into the reclaiming the P&L next in our
next segment. I've been after this thesis for
a while, So heads up our procurement officers and our CF
OS and our CI OS and the controllers working in
technology that there is also not only is there bloat in the
SAS stack, see, but there's bloat in redundancy of
(30:23):
repetitive things you're asking each stack in it of itself to
do. So let's see, let's just think
geocoding is like an example forthis, because you know, you and
I did a. Good example.
Geocoding. OK, so every geospatial outcome,
whether you're buying satellite imagery, Lidar, you know, SAR,
(30:44):
whatever you're buying, every single person that does anything
to do with satellite at all has to do this thing called
geocoding. And so you, the company, I
figured this out and I was like,who?
You, the company have a redundancy load of 20 to 30% in
every stock you buy, if you buy the outcome and not the point
(31:07):
solutions team, because guess what, they're all geocoding it.
And so I in that situation, I couldn't just get the
calculation. I needed the like thing.
And so I say, hold on, I'll do the enterprise geocoding.
I'll send you a, if you will, a data file with a geocoded data
input and you will not geocode my data file and you will just
(31:29):
do the processing with my, you know, my, My Portfolio, my
investments, whatever it is. So I think, see what we don't
real. And then by the way, my price is
locking down, right? How I think that's a really
interesting like reclaiming the piano because I think part of
what we're after is not just thetack, it's also the business
(31:50):
sanctity and sanity as saying I'm going to manage my PNL for
business related outcomes. So if we move from diagnosis to
direction, if I am ACFO Chief Procurement Officer, C0 0PN L
owner listening, how do I assesswhere my current stock might be
bleeding value And what is that intuitive lens Steve that I can
(32:13):
go after? Hey, we may have overbought, we
may be under executing and theremight be redundancy.
Even if I want to keep all the bells and whistles that I have
today because I often hear like I don't want to give up the
bells and whistles. How do I think about that?
Again, I think the answer is relatively simple.
Now executing on it is hard and this started 25 years ago for me
(32:38):
and I was managing the time which is called shared services
departments that did these functions.
And I asked a wizard leader in that function, how do you size
these things? And he said, well, you keep
asking for efficiencies and increase utility until it stops
(32:59):
and then you back off a little bit.
So if you're ACFO demand of yourbusiness that they take out cost
and if you're ACEO demand your business accelerate revenue and
don't accept no for an answer because again, if your answer is
really complicated and involves a dog eating their homework and
all that, maybe that's not a very good answer.
(33:20):
And that pressure on the organization will cause people
to ask hard questions, will cause people to really examine
some things they never thought about.
So if you're talking about technology, most technology
leaders will say most of their calories are spent maintaining
stuff that they already bought. Why?
(33:42):
That's an interesting hard question like why is that?
And is that maybe the most important thing you should be
thinking about for cost management if you're a
technology professional is stuffthat's not related to new
projects spent? Why is that not your number one
priority? And again, it's a hard question
(34:03):
that rarely gets asked because you, you go to these companies
and, and, or I've been part of these companies and you,
everyone thinks long and hard about new technology that
you're, or an, or a new thing that you're doing.
And there's multiple layers of governance, but the old stuff,
no, no governance whatsoever. It's like, oh, I, I spent $20
(34:24):
million last year. I've spent $20 million this next
year. My.
Favorite is like there was a CIOat a company that I worked at
that said, well, like you got what you know, you basically got
what you asked for, you know, interms of the maintenance cost.
I'm like, hold on. You're saying that to people out
there like earning money and then driving revenue.
Like that's probably not the wayyou should be responding to
(34:46):
that. But I think it's an interesting
almost like you started this conversation, Steve.
It's an interesting level of acceptance that we've come to
become also comfortable with when you shouldn't be
comfortable, I think is what you're describing like you
should not be comfortable with that level of acceptance when
(35:06):
you can't fuel new things for the business because keeping the
lights on cost X. And if somebody just says to
you, well that's what it is. I think what you're saying is
challenge that through the gauntlet.
When it's interesting, I was talking about 3 years ago to a
founder and he said something that just stuck with me.
He said, Steve, that I was complimenting him on this great
company he had built. You seem like you do technology.
(35:29):
And I said, I try. And he said when I started three
years ago, I had four people that did technology.
And I don't know what happened but I checked the other day it
is 175 and I had no idea what they're all working on and it's
so common and then. It's really.
And then the, the answer tends to be, well, I, I would be too
(35:52):
hard for me to explain that to you.
Make them explain what everyone is working on because those will
be really interesting conversations and that would be
my advice. All right, so Steve, let's name
this shift because I want to talk a little bit about what
you're doing at Oliver Wyman Actuarial because you hear the
no disrespect, you have the nameactuarial and you're like, OK,
(36:14):
you don't necessarily think of Co build and kind of reinventing
business directly. So you're moving from advising,
I'll call it consultatively out of the PowerPoint into into the
Ring of Fire, which is Co building.
Why was this necessary? Because I find the business
model fascinating. Clearly I'm a fan of it.
(36:36):
I love it. It's a very big North star for
me in terms of like signals. What are you all enabling that
P&L owners couldn't get before and how are you doing it?
Because I, I love the kind of connection of this conversation
like that intuition being ignited, helping kind of see
through the fuzzy, creating clarity on it, knowing what the
(36:58):
one thing you need to ask for isand not being alcohol, you know,
permanent consultants talk to usabout that.
I think this is a fascinating like extension of the business
model. So I'll answer it in two parts.
The 1st is the question you didn't ask, but is probably top
of mind. Why actuaries in technology, It
turns out that to be an actuary takes a tremendous amount of
(37:21):
grip to become credentialed. There's these exams that you
take. So it's a factory to distill
practitioners that just have grit that are that are they're
going to work on a problem untilthey get that problem solved.
And people that like to solve problems tend to gravitate
towards that field. The secret sauce in the emerging
(37:44):
the new world of technology is the ability to define and solve
problems. And we have companies that are
full of coders and engineers andarchitects, but not problem
solvers. And we have business
practitioners that know how to run their business but might not
be the best technology problem identifiers or solvers.
(38:06):
And by upskilling our actuaries so that they can sit between the
business and the hardcore technologists has unlocked
tremendous amounts of value. And I've got to admit, initially
it started kind of as an experiment.
We didn't know, we said are are we going to be solving small
(38:27):
problems or large problems. And it turns out that we're
doing small problems, but we're also tackling some of the
largest problems in the industryand we're doing it really well
and we're doing it at orders of magnitude faster and better.
And there is an interesting story that goes along with that.
I have a client that wanted to build an AI thing.
(38:47):
I won't go into what The thing is.
And they talked to an engineering firm and the
engineering firm told them, well, I can build an MVP, which
means just a thing that doesn't really do the thing, but it's
enough of it that you can tell what it should be.
I. Think it doesn't really exist
but kind of pretend it's beyond a demo maybe?
And they said to do that, it's going to be at least $3,000,000,
(39:08):
maybe $5 million. And I talked to the same client
and they were frustrated And there was, there was sort of
this angry thing. And this is, and they were
telling me This is why they can't do AI.
And I said, would you be interested in talking to one of
her actuarial practitioners? And I said, well, why?
And I said, I, I don't know. I, I bet they could come up with
another answer. And we engineered this meeting
(39:29):
and between the point where we scheduled the meeting and we had
the meeting, this actuarial practitioner in a handful of
days went ahead and built the MVP.
And it's just a handful of days worth of work did not require
$3,000,000. And in the process of building
the MVP designed a, a quasi training technique for, for AI
(39:52):
that might be not new or patentable.
And I was pretty impressed. I was like, well, that's I, I
didn't think of that. But that everyday innovation is
something that we're seeing moreand more and it's building upon
ourselves. Now we have a community of
practitioners that are all getting up skilled and learning
from each other in that role of problem solver and understanding
(40:14):
person of technology. We're able to solve significant
problems at very different pricepoints and speeds that are
frankly delighting our clients. And it's an exciting time to be
working with our clients and to be in the industry.
I, I mean, I think it's so, so amazing, right?
Because to me, it's really not retooling, but it really gets at
(40:35):
how do we reconcile the businesswith itself, which is something
that I think we kind of lost sight of as we went deep into
the size world. So, Steve, clearly we could talk
forever, but as we can start to bring this to a roundup, you
know, being in the hot seat, youget to answer the kind of three
call to action questions. What is something in your call
(40:56):
to action that you would ask everyone still listening to us
to start doing, stop doing, and continue to do?
So start asking the hard questions.
If you're not asking the hard questions, stop assuming
everything is going to be hard or expensive or unknowable.
(41:17):
Continue trusting your instincts.
They got you there. Probably every one of our
listeners are impressive people that have had impressive lives
and impressive careers. So trust your impressive
instincts. That's my advice.
I love that. I always love how you just frame
it so, so articulately. So for any of our listeners that
(41:39):
do not follow Steve on LinkedIn,please follow him.
Please follow all the work that Oliver Wyman Actuarial is doing
and say to you, Steven. Now I'm like really curious
about this AI solution. I feel like I want to see it in
action. Maybe we can maybe once it's
released, we can have a little post showcase of it.
But super excited to see how youare, you know, really living
(42:03):
what you said to me again, probably five years ago, You
know, Lisa, all this stuff that we're building, all this size
engines, we could just do this in the cloud.
We we were talking ERP. We could do debits and credits
and get this stuff done. And I love seeing you fulfill
what you knew to be instinctively and directly
correct. So thank you for being a guest
(42:24):
today. Lisa, thank you.
And it's it's humbling to work alongside such amazing
practitioners and appreciate youhaving me here.
Of course. All right, So for all of our
listeners, continue to stay tuned, stay informed and stay
curious until next time on Insurance Unplugged.
Thank you, Steve. Thanks, Lisa.
(42:46):
Thanks for listening to another episode of Insurance Unplugged.
If this episode. Pushed your thinking or gave you
words for something you've been sensing?
Thank Oliver Wyman Actuarial. They're not just sponsoring this
season, they're proving every day that business LED tech isn't
a mess. It just needs to be built by
people who understand both sidesof the table.
For more from the team that's Cobuilding execution, not just
(43:09):
advising on it, head to oliverwyman.com.
Back slash insurance and stay tuned because the next collapse
is already underway and we'll behere naming it.
Thank you.
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