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Implementation of a Comprehensive Corporate Governance Strategy

By Michael Stoeckert, CTO, ProAssurance

Michael Stoeckert, CTO, ProAssurance

An enterprise corporate governance strategy will foster an environment to provide, maintain, and support the information base that your company and shareholders need for ensuring compliance, enhancing decision making and creating reliable information to analyze. This environment includes developing a portion of the corporate data architecture, designing a data "warehouse", designing a data enterprise service bus and identifying and implementing the necessary technology to use the data.

"The key to properly insuring and mitigating data risks is to first dig much deeper than headlines on data breaches"

An enterprise model which describes the key data elements and processes in sufficient detail to allow future components to fit together as they are developed is required to implement this strategy. It also describes a phased implementation plan which can be used to drive and track the progress made from the current environment to the one envisioned in the enterprise model. A framework should be fleshed out with detailed analysis and design, along with schedules and personnel requirements, once specific projects have been identified.

An initial list of business processes from your enterprise business strategy needs to be verified and expanded. Business goals, objectives, and measurements will drive the content and delivery of your enterprise corporate governance strategy which includes a shareholder intelligence strategy. A shareholder intelligence strategy is a tool that the compliance officer can use to communicate vital information to shareholders so they can assess risk which is especially important for institutional investors. Some very large companies have migrated to a senior executive team which requires the Chairman, CEO, and President is three physically separate people. This can start a movement requiring CIOs to report to the chairman or governance committee who represent stockholders, not the CEO or President who represent employees.

First, you must establish executive-level consensus on critical information required to drive current and future business decisions. Second, confirm that the information aligns with your compliance policies by having your compliance process perform their analysis. Third, validate existing data sources and establish consistency of data across multiple business systems. Fourth, provide accurate and timely information, along with the appropriate analytical tools to facilitate decision making and analysis. Finally, establish a corporate data architecture consisting of critical information components and standards surrounding data management, access, and multidirectional data interchange.

All changes to the corporate governance environment should support the larger strategic goals outlined in your companies business strategy. Piecemeal solutions will result in data structures and processes which are inconsistent, redundant, and difficult to maintain. This shift in emphasis toward long-term objectives means building systems that reflect the true needs inherent in the delivery of products and services to the enterprise’s customers and shareholders, rather than reflecting the management organization of the company. The key components of your corporate governance strategy will be the data ecosystem “operational data store (ODS) /data lake”, "data warehouse", “data mart” and the “enterprise service bus.”

A date lake holds a vast amount of raw data that is in the same format as its originating system. This can include both structured data from business applications and unstructured data from the Internet of things (IoT) devices, mobile applications, and social media. In the old days, we used to call these staging areas in EDW lingo.

An ODS contains detailed transaction information and is used to get up-to-the-minute information on current customer behaviors and purchasing activity. This ODS is usually restructured into 3rd normal form. So after you have deemed a set of data that is in the data lake valuable to compare to more structured data you can transform it into a relational format. This used to be very time intensive but with the AI and machine learning vast breakthroughs have been made to automate this process.

A data warehouse is an integrated collection of non-volatile data that offers various levels of detail for decision analysis, management reporting, and decision support. The data warehouse contains more summarized information and is designed for understanding larger trends and patterns.

Data marts contain information geared towards particular user groups and are used to support their specific reporting requirements. They are largely in the form of proprietary repositories that are designed for the speed required by multidimensional online analytical processing and usually contain that the greatest aggregation of data which allows the users to focus their analysis before getting to the detail.

An enterprise service bus is the central integration point that houses the single version of the truth for all data which is highly volatile. This enterprise service bus communicates with various source systems, ODS, data lake and the data warehouse. A service-based architecture will provide real-time information to your customer and shareholder facing applications by using the information contained in these data integration structures and support for formats required for legacy systems.

This is different from older data warehouse architectures that cleanse non-standard data from source systems in one direction into a pristine data model that was the data warehouse. This did not include an automated process to cleanse the source systems with non-standard data; which was a very long manual process working with source system owners. An enterprise corporate governance strategy also includes the environment to support the data ecosystem including the control, timely access, levels of summarization, real-time data interchange and distribution of information.

Implementation of a comprehensive corporate governance strategy will enable changes in business measurements, processes and data structures which can effectively be used by internal and external stakeholders to initiate changes in operational systems thus supplying new data to the ecosystem. This results in a better understanding of who our customers are, a more personalized and pleasant web experience for visitors via your channels, an ability to effectively track long-term trends in the business, flexibility to adapt to changes in the needs of the business while ensuring that shareholders are confident in the validity of information due to our corporate governance policies. A consistent and reliable view of corporate data organized around business processes.

This architecture should be implemented incrementally. By targeting a specific business process scoping the development of an enterprise data integration architecture, immediate benefits can be enjoyed by some business users, and the viability of the plan can be demonstrated. The implementation approach will focus on continuous delivery of value-added segments of the corporate governance strategy. This should utilize iterative methods, with facilitated techniques, heavily utilizing eventual users of this corporate governance system including shareholders.

The first major milestone consists of completing the accelerated scoping and planning which provides project initiation and start-up, current state assessment, infrastructure definition, and solution proposal. Subsequent phases include analysis, construction, infrastructure development, implementation and project management. Usable portions of the warehouse and enterprise service bus should rollout in 3 to 6-month intervals.

A corporate governance strategy is not a project; it is a process, requiring the ongoing efforts of all parties to maintain and increase the enterprise's functionality in the face of constantly changing user needs, compliance policies and business processes. This requires a clear commitment from upper management especially the corporate governance committee.

Information is an asset of the entire organization. An enterprise information architecture strategy can help individual operating units to build structures which take enterprise opportunities into account. This strategy must be tied to the enterprise’s business strategy.

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