Tom Reuner — HFS Research[00:21]
A warm welcome to our next episode of Unfiltered Stories. And this time we will try to demystify industry cloud. So, industry cloud — much ado about nothing? I don’t think you have to be a scholar on Shakespeare to pick up on the irony of that question. But the discussion around industry cloud, or industry clout, is just a broad placeholder, and it’s full of contradiction. On the one hand, the topic pops up time and time again in all these CEO surveys that we’ve seen everywhere online, and perhaps because of that, the marketing drum of the many technology providers then beats quite vigorously. Yet on the other side, when we discuss the topic with CEOs, there’s a healthy degree of skepticism, sometimes even outright disdain — dismissing it as marketing fluff or analyst speak. So, more than enough reasons to try to cut through all this market noise and provide best practices. But, like always, there’s the question of what the context is for those discussions and which lens we are looking at the topic through. And for us at HFS, the context for those discussions is that only one sort of organization is actually achieving their priorities with cloud-native transformation. And therefore, again, there’s background to how industry cloud, how industry-specific capabilities, can help organizations to finally move the needle on that transformation journey and ultimately also help them to capture business value. And to help us shed light on all those issues, I’m really delighted to welcome Addy Dubhashi from AWS and Piyush Saxena from HCL Tech. Welcome, gentlemen.
Addy Dubhashi — Financial Services Partner Center of Excellence, AWS[01:29]
Thank you. Thanks for having us, Tom. We really look forward to it.
Tom Reuner — HFS Research[01:55]
Addy, let me start with you. Can you please start us off, very quickly and succinctly if you could — give us your rank and serial number — but then, from an AWS perspective, how are you seeing industry adopt cloud for its at-times very specific needs?
Addy Dubhashi — Financial Services Partner Center of Excellence, AWS[02:13]
Thanks, Tom. My role at AWS is on the Financial Services Partner Center of Excellence team. Our team focuses on helping our customers understand the better solutions that our partners can offer to accelerate them to the cloud. Some of the key trends we’ve seen when it comes to applying the cloud in insurance have been around combining the complexity of application stacks and transforming them to the cloud. AWS brings a broad set of services, and you have to think of them as Lego bricks. What we’ve seen is that customers are looking for kits that can help them combine those Lego bricks — almost like a manual on how to build the right Lego kit that suits your need. And so we call these cloud development kits, as the appropriate abbreviation. We’ve seen customers take those cloud development kits and accelerate them for their respective industries. Now, AWS has been the cloud leader, steering the boat for a long time and shaping the industry, so we have several templates and blueprints that are accelerating customers. And what we’ve seen is that within insurance, an insurance cloud can become a very bespoke need for a customer, so working off those cloud development kits and our proven patterns has really helped accelerate customers. As soon as a customer decides to dive in, they can prototype and experiment in an agile way, and that’s when our partners such as HCL come in and really help implement an end-to-end strategy that can help the larger migration and transformation to the cloud. So, happy to dive into the subject in more detail through the discussion.
Tom Reuner — HFS Research[03:54]
No, great insights, Addy. And coming to you, Piyush, from an HCL perspective — again, first, of course, rank and serial number, just like Addy — but then, how are you engaging your clients? How are you guiding your clients on industry cloud? And perhaps even more importantly, can you share with us some compelling outcomes you have achieved by delivering industry cloud?
Piyush Saxena — Global Head of Cloud, HCLTech[04:13]
Sure, Tom. At HCL Tech, I am responsible for all cloud offerings and cloud business globally. I have the privilege of engaging with customers on their cloud journey, helping them traverse this path. When we are talking to the customers, there are a few things they are looking at: a need for speed, faster outcomes, how you bring in data integration across the value chain, and also data monetization. These are key asks from the customers today. And with AWS, we have a very strong focus on industry cloud, and specifically around insurance cloud. We have our own platform, which is Insurance Business Services — we call it IBS. This is a ready-to-use environment with tools and services made fit for purpose for insurance services. Today we have four customers, with a million-plus policies under this platform. I will just take one example to share how customers are looking at this industry cloud and how we are helping them, along with our partner AWS, to transition from legacy systems to modern platforms. This customer is based out of London. They have over 18 million customers being managed across the UK, Ireland, and Canada. They were struggling with legacy technologies, and some of the challenges they were facing: poor customer service, increased IT risk, a huge compliance burden, and the cost per policy for them was extremely high. We brought in our IBS platform on AWS. We introduced a cloud contact center and omni-channel support for them. We also brought in a single interface for executing these services, and a compliance workflow from start to finish. This helped us bring down the cost per policy by 40% for this customer. So this is one use case, and this is how we are engaging with the customers.
Tom Reuner — HFS Research[06:20]
Thanks for sharing that. Just very briefly — do some of you agree with what we’ve seen in our research? Again, as I stated at the outset, only one-third fully achieve their priorities. Do you share that opinion? And quite frankly, on my side, anecdotally it just seems to be even higher. Or do you feel, especially from an insurance, from a financial services perspective, that you see almost different kinds of results and progress with their journeys?
Addy Dubhashi — Financial Services Partner Center of Excellence, AWS[06:49]
On the AWS side, we’ve actually seen how customers who are able to quantify the goal they want to reach, and take this message top-down, has really accelerated the broader organization. There’s an interesting Celent report that calls out that over 48% of organizational budgets are actually getting channeled towards maintaining legacy systems. And so every time a team or an organizational resource budget channels toward this direction, you miss out on the innovation that’s happening in the wider industry. With the rise of FinTech, we’ve seen that innovating here is much more rapid and fast. And so when customers are setting this goal top-down and allocating their teams to work in an agile manner, we’ve seen these transformations work really well. Some of our customers, like Nationwide, have actually been able to set the strategy, understand that 80% of their data was sitting in silos they could not access, draw up an action plan and a transformation roadmap, and were able to get to those results. So it’s really important for an organization to think top-down about this, and allocate the right resources towards innovation. And if you’re looking at that transformative data strategy, it’s about starting small, being very focused on business impact, and going through that cycle in an agile manner. We’ve seen that work really well. Data modernization journeys are complex, but starting small and keeping that business goal in mind has yielded good results across our global customer base.
Tom Reuner — HFS Research[08:33]
No, great insights. And so, to both of you: what are the main lessons learned from those early deployments? So, Push, could you start us off? And by learning, I literally mean for better, for worse, because in the end it’s about what best practice is. What can we learn from those deployments? With all innovations, it’s not easy, but I think provided we define the business objective — that’s where we want to see the whole discussion on business value cutting in — the way we look at it is about aligning technology with business objectives. But, Push, perhaps you can just share some of the lessons learned, for better, for worse, from your end.
Piyush Saxena — Global Head of Cloud, HCLTech[09:11]
Yeah, sure. Based on some of the engagements which I talked about, and also the benefit which we were able to realize for the customer in terms of reduced cost per policy, there are a few other things which we were able to impact. We were able to achieve almost a 50% reduction in complaints for the customers by moving them to a more standardized industry insurance solution and platform, and almost 70% faster turnaround time. So those are some of the quantifiable outcomes that we were able to achieve for our customers. Also, the customers had to worry less about compliance obligations and compliance requirements. Although it doesn’t get eliminated 100% — we all know that — it definitely becomes much easier. Also, the integration of the partner ecosystem which comes along with this kind of industry cloud platform makes it easier for customers to adopt. And we all know the way the market is changing; there are evolving customer requirements happening at a very fast pace. So that kind of agility is what customers were able to achieve. I think there are a set of challenges as well, so let me talk about some of those. Addy again talked about data migration. It’s not easy. You have to be very careful and well planned in terms of how you do the data migration. There continue to be legacy systems which we have to modernize, and it’s not easy. There is a lack of documentation, which is where organizations like ourselves come in with accelerators to help the customers. There are integration issues with the existing systems, and those are the things which we are able to address through the industry cloud solutions.
Tom Reuner — HFS Research[10:56]
Great, great points. I fully agree — interoperability, moving at least towards an ecosystem, should be central to the whole discussion on industry cloud. Addy, from your perspective, what are the lessons learned? What surprised you, perhaps, for better, for worse, on those early deployments?
Addy Dubhashi — Financial Services Partner Center of Excellence, AWS[11:23]
What we’ve seen is that when it comes to the setup and roadmap that customers are taking, starting with an agile group that aligns the organization — the business, compliance, legal, and business process teams, along with the technology team — really helps. So when you start small and are able to create this small working group and set out a tight timeline, that’s something that scales. We at AWS call it experience-based acceleration — so, show and demonstrate versus present and talk about it. What we’ve seen with experience-based acceleration is that when customers come together, the business and domain teams along with the technology teams, with that tight timeline and in smaller groups, they begin their cycle, they agree on a finite plan and a deadline, they have access to those data sets, and they control the decisions on what can and cannot be used when it comes to the data sets. And that’s what really accelerates broader data modernization efforts. Larger transformation efforts take time; they need a lot of stakeholders to align, and many times that can lead to complexity that slows down the process. So starting small and being nimble has proven itself. One of the examples is Sun Life — we had them up on stage at re:Invent, and they talked about how being nimble through that experience-based acceleration process really accelerated them. So what we look at is, when a customer is starting on this journey, you want to bring together a small group with the decision makers and the owners of the business and domain — the P&L leaders or the compliance leaders — into the discussion, and set up that small and agile group. That’s what scales, and that could be right at the heart of complex legacy migration. Over 70% of an organization’s developer productivity goes towards maintaining core or legacy systems. So if you bring a key group that manages a module or a key component, and then drive that experience-based acceleration process, you tend to see clear results, and that can then be a repeated pattern that percolates through the broader organization. So the organization is learning those best practices as the team starts off, and it’s able to take a message in a train-the-trainer manner. We’ve seen that approach work really well. And Sun Life, who came up on stage, actually applied this towards Gen AI, so we’re happy to talk about some of those stories as well — but I think we should hold off for the moment.
Piyush Saxena — Global Head of Cloud, HCLTech[13:34]
So I just want to add a quick point on Addy’s note. I think the customers are also wary of this build-versus-buy question, and I think an industry cloud solution offers them a better opportunity cost with faster time to market. And also technical debt — that’s a big discussion in the industry — and if you move to this kind of platform, you can definitely avoid the technical debt. So those are two very key factors which came across during our customer conversations.
Tom Reuner — HFS Research[14:12]
It’s not just technical debt, it’s process debt, it’s culture debt as well. So I think it’s a great point. And just to close us off — we could go on, but — if you have one wish now: do we have to reframe the industry cloud discussion? Are there missing pieces? What’s meant to be in there? What are you hearing from clients? Just in a very succinct way to close us out: is it a useful moniker, or do I have to change the moniker? What’s your take?
Piyush Saxena — Global Head of Cloud, HCLTech[14:49]
Yeah. So, look, I still feel that there is a need for more awareness in the customer fraternity about the industry cloud solution. Also, I think the question in most customers’ minds is not why, but how. And when we are talking about industry cloud, we are talking about essentially four parts to it. One is having an infrastructure-as-a-service layer, like ECS and EKS services from AWS. Then, having a platform-as-a-service layer, where you bring in other solutions like Glue or Redshift. Then an application layer, where you bring in content management and BI. And then the customer experience layer, where you bring in chatbots or self-services. And I think the fifth, very critical layer is also compliance-eligible services. So, to make sure you’re compliant, your services at the back end should be compliant. This is what forms the industry cloud, and you can consume it as platforms or services. Of course, there are missing pieces which we talked about earlier, in terms of data integration, data migration, and some of the things around having more composable platforms, which can then add to the current environment and value.
Tom Reuner — HFS Research[15:59]
Great points. Addy, very succinctly and briefly, to close us out?
Addy Dubhashi — Financial Services Partner Center of Excellence, AWS[15:59]
Yeah, I’m happy to combine what Push was saying. What we’ve seen is that customers are going to have certain timelines by which they have to go through these transformations. So working with solutions that have been proven out, best practices that have been adopted, is key. Some of the regulations that are really going to steer this — IFRS 17 — are changing the accounting standard; a 20-year accounting standard is going through a massive change. What we expect is that the cohorts that compile the insurance contracts are going to have a significantly new set of metrics. So complying with the IFRS 17 changes, which is an upcoming deadline, is going to require modernization. Combine that with IFRS 9, which was already something that had sparked that discussion and modernization journey. Customers want to make sure that they’re building their architectures for that future state, which is an ever-changing environment. Obviously, in the US you have GAAP protocols and guidelines, but they also are going to steer towards IFRS 17 best practices, which is a global industry standard getting set out. So when customers are going towards these compliance timelines, they’re also seeing the market change significantly. You’re seeing customers who have higher expectations on the customer experience. They have access to new repositories and sources of data. One of our partners, Verisk, has completely opened up their insurance data repositories and made them really accessible to customers, to pick and choose the data sets they need for their catastrophe modeling or their actuarial workflows. And so when you have that modern architecture set up, or you’re applying a ready-platform play that can help you get there faster, you’re going to be able to utilize a lot of those system benefits that accelerate you. So I very much want to encourage the decision makers to think about how you can both comply with the upcoming deadlines that define your modernization, but also think about the customer experience that transforms through this process. By applying those modular, ready offerings, you’re really able to accelerate. The example I shared with Verisk is actually one that can be immediately applied through a demo. So if organizations are figuring out catastrophe modeling, you can very quickly apply a Verisk data set that’s available on AWS Data Exchange, ingest that data set into your insurance data, and start seeing those industry outputs that you need. So starting small and starting fast is something that can be proven out in weeks and not months.
Tom Reuner — HFS Research[18:48]
Great, great insights. Guys, we set out to shed some light on industry cloud, and it’s such a rich discussion — I learned a lot, so that’s the best part of my job. But I think there’s so much to learn, so, all three of us, I look forward to engaging with you, the audience. There’s so much we have to learn from you, but we also need more engagement and more discussions, and we all look forward to it. Addy, Push, many thanks for all your great discussion. Thanks.
Addy Dubhashi — Financial Services Partner Center of Excellence, AWS[19:19]
Thanks, Tom.
