That鈥檚 how I think about supplier management. To cope with pandemic restrictions, inflationary costs, and simple availability issues, insurance companies have been broadening their supplier pool. If your current suppliers can鈥檛 deliver, you find another one that can. Seems straightforward, right?

But adding new suppliers increases the complexity of managing your vendor base. A larger, more diverse pool of vendors makes it more difficult to gain visibility into the performance of any one provider 鈥� or all of them.

For many companies, adding more suppliers makes planning more inconsistent. It can also complicate their ability to mitigate supplier risk and compliance.

Supplier Performance Is Undermanaged

When I talk to insurance industry executives, the outcome is clear: too many companies still struggle to adequately manage vendor performance.

In a recent , nearly half of respondents say that gaining visibility into vendor performance is challenging. Even though 67% say they use procurement technology for supplier management, 41% continue to experience supplier performance issues.

And that might be an understatement. In the same survey, 39% of insurance executives say that most procurement processes are still manual. That tells me that many insurers may not be fully aware of their vendor performance issues.

Digital Solutions Elevate the Role of Supplier Management

What should insurance companies do to overcome these challenges? It鈥檚 time to move beyond manual procurement and embrace innovative new technologies.

A comprehensive vendor management program, supported by digital technology, can help you determine how good your vendors really are. By identifying shortfalls and collaborating to improve outcomes, you can get more service and value from each supplier.

can help you monitor and analyze vendors鈥� reliability, quality, and performance. By embracing these technologies, you can gain real-time insight into supplier performance. In an economy where everything changes by the minute, this insight can help you improve control and increase your competitive advantage.

Manage Vendor Performance with Digital Business Networks

One of the most popular ways to modernize vendor management is to use a digital business network. By connecting insurance companies with a multitude of vendors, large networks simplify the adoption of modern vendor management strategies.

let you access a diverse collection of new suppliers with the click of a mouse. You can streamline order requests and fulfillment while simplifying collaboration between insurers and vendors.

Procurement decision-makers gain new insights into delivery times, product and service quality, costs, and service-level agreement compliance. The data helps identify performance gaps and identify cost savings opportunities.

You can manage more vendor relationships at the same time throughout their engagement. And when problems arise, you can quickly pivot to another vendor that can meet your needs.

Improve Business Outcomes by Digitalizing Procurement

Digital business networks and other technologies deliver quantifiable value. In the , 60% of respondents that have embraced digital transformation say they improved supplier collaboration. Nearly as many, 57%, report enhanced supplier performance management.

In a difficult economy such as this one, those benefits can make the difference between lackluster performance and real competitive success. By working with reliable suppliers that deliver what you need when you need it, you can give customers a more engaging, satisfying experience.

And because happier customers generally lead to a better bottom line, digital business networks sound like the best solution to pop up in a long time.

Explore the .

Toni Tomic is global head of Insurance at SAP.

However, insurance companies that rely on this staffing approach find that the external workforce becomes a huge part of overall spend. Often, they overlook tools to help manage this workforce.

In fact, a recent found that insurance companies now spend 40% of their workforce budget on external labor. And nearly three-quarters of companies say that these workers are important to their ability to meet market demand or operate at full capacity.

The external workforce is a key lever in enabling business performance. It is important to meet market demands, improve the customer experience, and reduce risk. With these facts in mind, it鈥檚 easy to see why managing the external workforce should be a priority.

Increase Insight into Your External Workforce

Companies often use traditional procure-to-pay systems to help streamline external workforce management. Yet many insurance companies still don鈥檛 have the insight they need to get top value from their spend.

For example, found that just 34% of companies use procurement technology for contingent workforce management. Some of the respondents use this technology to manage their service providers, but only 20% were able to track and manage their engagement from statement of work to purchase order to invoicing.

Companies also lack insight into fundamental issues such as who is doing the work, the contract terms of each engagement, and the responsibilities of each worker. The challenge is that digital security breaches present risks to the organization, as external workers can take advantage of their digital access if they are not onboarded and offboarded properly.

The research highlighted several other issues that can compromise the value of the external workforce. Nearly half of respondents reported compliance issues and more than 40% reported quality issues regarding resources and projects with external workers. In addition, 44% reported unauthorized spend with contingent workers.

Standardize and Streamline External Workforce Management

What鈥檚 the best way for insurance companies to manage each external workforce engagement so that they get the value they pay for 鈥� and the best possible business results?

Advanced digital solutions for external workforce management can help.

With these solutions, managers can standardize worker onboarding and offboarding processes. They can quickly and intuitively grant access to systems and assets 鈥� and disconnect that access when a worker鈥檚 contract expires. And the technology helps ensure that workers have the right certifications. This is a great way to reduce risk.

Best-in-class solutions let you use any type of proof of service 鈥� such as timesheets, milestones, and deliverables 鈥� on a recurring due date or price-per-unit basis. This feature helps you align payment with the value provided.

You can tailor workflows based on category of service or work provided. For example, you might want to include tiered vendors in the requisition process or require approvals needed for invoicing to ensure your company鈥檚 organizational guidelines can be easily followed.

Increase Bottom-Line Business Value

Other features let you monitor supplier KPIs, such as response time, cycle time, and hire rates. With this insight, you can facilitate reviews and negotiations with suppliers.

Improving your external workforce management processes can also help you provide a better experience for candidates and workers. Intuitive workforce management solutions can make your company more attractive to younger workers who prefer to interact with you using digital technologies. They allow you to manage who is working for you, where workers are located, what they are doing, how much you are paying them, and what access they have to your systems and facilities.

What鈥檚 more, the right procurement technology can help you generate significant cost savings. Modern tools generate reports that enable immediate visibility into contingent workforce and services procurement spend. Analytics features can help you identify opportunities to further operationalize your procurement processes and create new cost efficiencies.

You鈥檝e developed a valuable external workforce. Now, advanced technologies can help it boost your business鈥� bottom line.

Toni Tomic is global head of Insurance at SAP.

Whether it鈥檚 from consumer activism, tighter government regulations, or the need for improved operational resiliency in the face of climate change, companies are taking major strides towards sustainable business models. As聽, incorporating sustainability into core business strategies is about more than 鈥渄oing good鈥� 鈥� it鈥檚 a smart business strategy. Capital markets are evaluating performance against environmental, social, and governance (ESG) criteria in investment decisions. Companies that fail to consider ESG criteria are at a disadvantage. In fact,聽聽will revise their investments if companies do not consider ESG criteria within their business model.

Sustainability Trends in the Insurance Industry

The United Nations Environment Programme Finance Initiative聽(UNEP FI) has been launched as a partnership between UNEP and the global financial sector to mobilize private sector finance for sustainable development. UNEP FI works with more than 450 banks, insurers, and investors and over 100 supporting institutions to help create a financial sector that serves people and the planet while delivering positive impacts.

Regulators are also requiring sustainability reporting from insurers, and they expect financial flows will be adjusted towards ESG criteria, in accordance with the 2015 Paris Climate Conference. The EU Taxonomy Regulation will require most European financial institutions to outline the environmental sustainability of their economic activities. But the 聽is not just about ESG criteria, although that鈥檚 certainly an important factor. Risks associated with climate change, such as more extreme weather, are also top of mind for insurers.

Global natural disaster insured losses, the amount insurers are forecast to pay out, is estimated to be as high as US$42 billion for the first half of 2021, according to a聽. From the Texas polar vortex to the Canadian heat wave to the extreme flooding in Germany, extreme weather events are costing insurers more than ever 鈥� and these climate-related risks are only expected to increase. More than half of U.S. regulators indicate that climate change is likely to have a 鈥渉igh impact or an extremely high impact鈥� on coverage availability and underwriting assumptions, according to the “Insurance Regulator State of Climate Risks Survey” conducted by the .

Gone are the days when sustainability was a footnote on an insurance company鈥檚 annual report. Today, stakeholders are pushing for change and demanding accountability. Customer preference is driving a shift towards more sustainable products and services. A variety of carrier options in a competitive marketplace means that customers are comfortable walking away from companies that don鈥檛 follow sustainable practices. Millennials and Gen Z 颅are . This is the same group insurers are competing to earn loyalty from to build long-term customer relationships.

The same goes for hiring top talent. In a tight talent market, professionals can afford to be selective about where they work and increasingly opt for companies that align with their values. Improving ESG performance is key to attracting and retaining Millennial and Gen Z employees.

Linking Sustainability with Business Activity for Environmental, Social, and Economic Impact

Enterprise solutions from 51风流deliver company-wide functionality and industry-specific features designed to help businesses achieve sustainability at scale.聽:

• Climate change solutions:聽Lower a business鈥檚 environmental impact by minimizing the carbon footprint associated with products and operations.
• Sustainability and ESG reporting solutions:聽Connect environmental, social, and financial data holistically to steer businesses toward smarter decision-making.
• Circular economy solutions:聽Move to circular processes across a business鈥檚 entire supply and value chain.
• Social responsibility solutions:聽Enable equality and social equity across a business鈥檚 entire workforce and network.

Toni Tomic is global head of Insurance at SAP.

Yet even as the volume of data grows exponentially across the insurance industry, turning that data into actionable insight remains a challenge. And meeting complex local and international regulations that change constantly still requires a lot of time and effort from insurance finance teams, which further reduces agility and timely insight.

Improving Insurance Finance Insight and Process Efficiency

Insurers and their finance teams need specific tools and capabilities to meet today鈥檚 risk and sustainability challenges. They need more powerful simulation tools that can help them optimize revenue and cost management across every line of business, channel, policy, and transaction. Finance teams also need to leverage intelligent automation that reduces the cost and effort to complete financial reporting, auditing, and compliance tasks across asset and investment portfolios.

51风流for Insurance Solutions Can Help

By bringing together data across your 51风流and third-party system landscape, the application empowers teams across your insurance organization to make decisions that can improve profitability, reduce costs, and fully align with core sustainability goals. The application鈥檚 scalable, high-speed finance and risk calculation engine combines machine learning with predictive and stochastic financial analysis to deliver powerful simulation capabilities 鈥� enabling your people to get more insight out of the information they already have.

And if you want to bring intelligent automation to your investment practices, subledger accounting, and statutory reporting, the application can deliver value. It works alongside 51风流S/4HANA as well as the 51风流ERP application to help take days off closings with automated processes such as calculation of amortization, impairments, and unrealized gains and losses. The application also can streamline compliance reporting with preconfigured content for fast-changing local and international regulations.

Want more information? Download our information sheets:

Anders Widestrand is senior director, FSI ISV Program and Co-Innovation, Financial Services Ecosystem, at SAP.

While lowering operating expenses is important, it is just one part of achieving holistic operational excellence. Insurers are also facing pressure from new government regulations designed to increase reporting transparency. These new reporting standards must be met quickly without compromising other innovation initiatives. Recent global economic uncertainty has further underscored the need for swift operational transformation and the creation of an intelligent enterprise 鈥� time is of the essence.

Unlocking Productivity and Accelerating Innovation

True change occurs when insurance companies become partners in their customers鈥� lives. To achieve this, insurers must reimagine operational excellence with new business models that not only lower costs but accelerate innovation cycles and unlock productivity. These include automated, streamlined, and integrated processes that employees can access from anywhere.

Benefits of Operational Excellence Solutions

The right operational excellence solutions will help your organization sell the right insurance products faster to the right customers while providing a consistent, loyalty-building service experience in a multichannel environment. Key benefits of installing operational excellence solutions include:

• Serving customers better by anticipating needs and delivering the right service at the right moment
• Unlocking business value from the explosion of data available through advanced digital technology
• Streamlining processes, including quoting, offering, and application management

How the 51风流Cloud for Insurance Solution Will Transform Your Operations

51风流Cloud for Insurance helps organizations reimagine key areas of their business to achieve a higher level of operational efficiency. Leaders are empowered to deploy digital processes that improve both the employee and customer experiences. SAP’s industry cloud makes it easier to deploy specialized applications that address specific insurance industry needs.

With end-to-end solutions, your organization can choose to flexibly purchase and deploy different solutions as needed. No matter which you choose, all your solutions will fully integrate. These solutions also can harness the power of next-generation technologies, like machine learning, robotic process automation (RBA), and insurtech integration.

Operational excellence solutions from 51风流can help your organization:

• Accelerate quoting, offering, and application management while driving efficient underwriting.
• Streamline the development of products and policies by capturing and analyzing experience and operational data for real-time insights and actively designing experiences that customers desire.
• Optimize the claims lifecycle by capturing claim data through subrogation and recovery, managing disbursements, automatically detecting fraud, and continuously evaluating claims performance.
• Manage the reinsurance lifecycle with a full view of operations and customers, which can help accelerate period close cycles by up to 300% and improve data quality.
• Quickly process billing and payments by increasing the efficiency and accuracy of billing and settlement processes using a single, integrated, and automated operational subledger.

Reimagine what鈥檚 possible for your insurance organization. Download the solution brief 鈥�.鈥�