The 54th Annual Paris Air Show was a busy week, but a successful one for the global aerospace and defense industry.

It was impressive to see innovation on display across the civil aviation, space, and defense sectors. We witnessed a lot of conversation throughout the week around digital transformation and digital readiness as we look to the future of A&D. As we reflect on our time last week in Paris, we are already looking ahead to another event we are planning for this fall… DSEI 2023 which will be held in London from September 12-15. Digital capabilities are defined in different ways throughout A&D, so I want to take a moment to delve into the importance of a digital culture in the defense sector, why it is crucial to understand the driving forces behind this need for digital transformation, and how organizations can prepare for it.

In today’s interconnected world, relying solely on conventional defense strategies and outdated systems is no longer viable. Embracing a digital culture to better use digital technology has become essential for national and international security, as well as maintaining a competitive edge in the A&D industry.

Navigating a complex geopolitical landscape: the need for advanced defense digital capabilities

The rapidly evolving geopolitical climate has led to increasingly complex threats that, in turn, drive different needs in national and international defense. The frequency of emerging threats and pressures originating from the rising boldness of other countries, the need for consistent maritime deterrence, and the continuous advancement of terrorist abilities and goals add to the rapidly evolving security situation.

We also face challenges in other areas: resource scarcity, sustainability, and the need for efficient delivery are increasingly evident in material supply networks, workforce availability, preparedness, and long-term affordability. Intelligent industry and connectivity are not always paramount in responding to geopolitical shifts.

As a result, defense capabilities, products, and services have had to become more sophisticated, with a $2 trillion push by governments worldwide toward intelligent, connected systems and assets. From sub-surface to geostationary satellites, these systems must deliver accurate decision-making information, optimal asset performance, and availability to meet affordability, sustainability, and availability targets.

The UK government has recognized the need to modernize and integrate defense capabilities by taking a whole-force approach and increasing the use of technology and innovation. The UK Ministry of Defence (MoD) is developing a Digital Strategy for Defense that focuses on a digital backbone, a digital foundry, and an empowered digital culture. This strategy aims to prioritize funding and specialist skills to achieve greater value for money with its £4.4 billion annual digital expenditure.

Defense products are evolving to address new threats and mission priorities, becoming more sophisticated and complex than ever before. Advanced metalwork and cutting-edge carbon structures are the foundation for top-notch digital platforms.

The growing demand for connected and insight-driven services necessitates a transformation across all tiers of the defense supply chain. Embracing new internal capabilities and competencies that bridge the gap between the physical and digital worlds is essential for maintaining a competitive edge in an increasingly complex and technologically advanced landscape.

The convergence of OT and IT

Information abounds as we become more data-centric, and so it is crucial to integrate across various domains, from supply chain to battlefield. The convergence of operational technology (OT) and information technology (IT) is becoming increasingly evident, opening up new opportunities and enhancing defense capabilities.

According to a 2022 GlobalData research paper titled ‘Internet of Military Things‘ (IoMT), real-time information sharing is critical between military sectors. The report provides an overview of the market by considering the global IoT market and identifying civilian solutions that can be adapted for defense environments. These include wearables, electro-optical/infrared systems, and command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) systems and infrastructure. Though estimating the market size of IoMT is challenging due to the sensitive nature of the research and development, the IoMT market was valued at $439 billion in 2019, rose to $486 billion in 2020, and is projected to grow to $807 billion by 2025, with a compound annual growth rate of 11% over the period.

As the linkages between OT and IT become more pronounced, innovative solutions emerge, enabling defense organizations to leverage the latest technological advancements.One such example is the use of digital twins, virtual replicas of a physical system, or process, that can monitor, analyze, and optimize the physical world. In a recent Capgemini Research Institute (CRI) report, researchers found 73% of A&D organizations now have a long-term roadmap for digital twin technology, and investment is ramping up, being projected to increase 40% from the previous year.

The implications of integrating IT and OT in the defense sector are far-reaching. For instance, the use of digital twins and connected systems can enable predictive maintenance, reducing equipment downtime and ensuring optimal performance. Additionally, the integration of IT and OT can enhance situational awareness and decision-making capabilities, allowing military organizations to respond more effectively to emerging threats and challenges.

As author Will Roper put it in a paper released in 2020 in line with a new digital push, this is a paradigm shift for military tech dominance: “In design, engineering, software, manufacturing, testing, and sustainment, Matrix-like simulation realism is happening: components and processes rendered so realistically they become digital twins of reality.”

Adoption and change management: defining a digital culture

The defense sector faces specific challenges when it comes to adopting new technologies and embracing change, due to its inherently slow-moving nature, security concerns, budget limitations, and general conservative outlook. However, the shift from a “need to know” to a “need to share” mindset is becoming increasingly important as the industry seeks to leverage the benefits of integrating IT and OT.

Private industries, such as Formula One, have been quicker to adopt digital technologies and engage in the digital journey. These organizations prioritize data-driven decision-making over anecdotal information, recognizing the value of real-time insights to drive performance and innovation.

For the defense industry to undergo a similar transformation, it is crucial to build trust in data and promote its adoption across all levels of the organization. When personnel understand the importance of data and rely on it for decision-making, they are more likely to actively contribute to and extract information from connected systems. Whether in new capability introduction, service or disposal, businesses must be as effective and integrated, if not more so, than the products and services their customers and end-users need. And keeping your digital culture current will attract the best new talent on the market.

As leaders and experts in the defense sector, it is essential to continuously develop our own skill sets and adapt the organizational culture to embrace digital innovation. For instance, a Chief Information Officer (CIO) might consider taking on the role of a Chief Digital Officer, driving digital transformation across the organization. Similarly, Chief Engineers and Operations Directors should incorporate digital innovation, experimentation, and development into their delivery plans, ensuring that the organization remains at the forefront of technological advancements.

By developing the necessary skills and fostering a culture of innovation and collaboration, defense organizations can overcome the unique challenges they face and maintain their dominance in an ever-evolving landscape.

Final thoughts on the Paris Air Show, and on to DSEI

Powering your digital capabilities and defining your digital culture are essential activities to stay ahead in our interconnected world, enabling the defense industry to overcome challenges, adapt to emerging threats, and remain at the forefront of innovation.

This message was prominent throughout the Paris Air Show last week, and we look forward to continuing discussions with our clients after the Paris Air Show comes to a close. We will next be present at DSEI in London from September 12-15 where our themes of connected defense and digital technology will once more be front and center. We will be at booth H1-456 and we would be honored to have to come by for a visit! We welcome the opportunity to share our views in more detail.

Expert perspectives

Technology

Capgemini's vision for A&D: Bringing your goals into focus at the Paris Air Show

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May 24, 2023

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The great data convergence – why digital continuity is critical for aerospace and defense

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The power of connected ecosystems in aerospace and defense

Capgemini

Jun 9, 2023

Generation Z. Gen Z. “Zoomers”. Born between the late 1990s and early 2010s, Gen Z grew-up alongside smartphones, social media, and constant connectivity. They are the first digital-native generation, and they expect a consistent, seamless digital experience in every aspect of their lives. This has created a generational gap where technology is concerned, particularly with the “Baby Boomer” generation (born between 1946-1964), who are beginning to retire out of the market.

Lifestyle Spending and Saving Habits

Technological upbringing isn’t the only thing that sets them apart. Gen Z favors lifestyle spending, or “soft saving”, over aggressive saving goals. This is in marked contrast with Millennials who prefer “FIRE” (Financial Independence, Retire Early) trends in saving. Going further, the “Zoomer” generation gravitates towards immediate gratification and, particularly, “Buy now, pay later” services.

Innovative intentions, inexperienced implementation

Gen Z is also beset by a very tumultuous financial world. Macroeconomic trends like inflated real estate and education prices form a tight market. When combined with their “soft saving” habits, this uncertainty creates a lack of confidence in terms of wealth and inheritance. This has, in turn, pushed Gen Z into entirely new avenues of finance.

Increased digitalization and the expectations for personalized engagements are the foundation for the innovations that Gen Z is driving. They prefer mobile apps and online solutions rather than traditional cash or card payments. Online success stories have bolstered Zoomer’s faith in cryptocurrency and “meme stocks”, or social media fueled investment campaigns. While innovative, this reveals Gen Z’s limited knowledge of financial products.

“Gen Z respondents averaged the lowest (43%) in answering finance-related questions correctly”
– TIAA Institute and the Global Financial Literacy Excellence Center at the George Washington University School of Business.

Moreover, by 2030, it is estimated that Gen Z will inherit around $30 trillion from their parents and grandparents. This incredible sum underlines them as a vital demographic for wealth management firms and banks.

Winning Over Gen Z: Strategies for Wealth Management Firms

Education and guidance

Gen Z will need trustworthy and agile financial advisors to help them manage their inheritance. Wealth management firms must offer educational resources that cover financial literacy, investment strategies, and responsible financial practices – and deliver all these articles, videos, webinars, and workshops in a way that connects and relates to Gen Z.

Financial planning for major life events

Pursuing higher education, starting careers, buying homes, and getting married are the kinds of life decisions that necessitate financial planning for major life events. Wealth managers play a crucial role by bridging the gap between Gen Z’s dreams and their financial reality.

Impact Investing and values-based decisions

Gen Z is a socially active generation. 92% believe that helping others in need is important and prefer to associate with brands that align with their beliefs. Wealth management firms will need to adapt and offer sustainable investing options, ESG-focused portfolios, and make ethical considerations a center-point of their overall strategy.

Digital natives require digital solutions

As the first digital-native generation, Gen Z expects personalized digital solutions, user-friendly interfaces, and digital offers that cater to their expectations and preferences.

Innovation and partnerships with FinTech

Fresh approaches are necessary to meet the unique demands of this generation. They expect continual innovation and settle only for leading-edge solutions. Wealth management firms and banks must differentiate themselves if they hope to capture Gen Z’s attention. Collaboration with FinTech and embracing new business models is an imperative.

What comes next?

It’s nothing new to suggest that every generation brings with them fresh ideas, new horizons, and changing expectations. Gen Z is no exception. This new generation of clients is just beginning their financial journeys, navigating a complex world, and bringing their values with them. Understanding this, wealth management firms and banks stand to not only form valuable partnerships but drive transformation across the industry.

What Gen Z need are trusted, experienced advisors that understand finance while bringing digital solutions to the table. Looking to the future, this is a trend that will only amplify with future generations as digitalization and enhanced personalization continues to develop and branch into ever-changing digital trends. Staying ahead, maintaining a fresh approach, and providing an open-minded network of support will ensure Gen Z’s loyalty for decades to come.

I was fascinated reading the insights from Capgemini’s new edition of #innovation publication, Data-powered Innovation Review – Wave VI.

Data makes us collaborate to better understand and act on market trends, consumer behavior, and business performance.

AI augments our abilities by helping us analyze vast amounts of data, make better predictions, and automate routine tasks.

Then there’s the continuous quest to activate data for #sustainability and building a better #society.

Download the report now and deep-dive into the fascinating world of data-powered innovation, where the possibilities are as vast and diverse as the coral reefs of the ocean.

I’m happy to share with you that Capgemini has been recognized by Gartner as ‘Metaverse Tech Innovators 2023’ in their radar.

Thanks to our Capgemini #MetaverseLab and #ImmersiveExperiences teams, we showcased our strategy and commitment to stay ahead of the curve when it comes to #metaverse experiences.
Thanks Gartner for recognizing our efforts and achievements, which aim at defining and building the future of the Internet with cutting-edge Customer, Citizen, Employee and Industrial digital experiences.

Thanks to all the team who contributed to reach this milestone.

Pascal Brier Franck Greverie Alex Bulat- van den Wildenberg Charlton Monsanto Kary Bheemaiah Michiel Boreel Keith Williams Lucia Sinapi-Thomas Bob Schwartz Mike Buob Borja Tinao Perez-Miravete Nitin Dhemre Dheeren Vélu Jean-Francois DELERUE Surabhi Gawde Daniel Lichtwald Liz Lugnier Clare Argent Bobby Ngai Abu Siddik Momin.

Capgemini Ventures was featured in Le Point’s “Palmarès des inventeurs”, as our very own Dany Tello was a member of the jury for the second year.

They selected 100 French startups in quantum, AI, Climate Tech, Cybersecurity, Med/BioTech, AgriTech, SpaceTech, Web3… that are considered promising in 2023 and will change people’s lives for good.

Great to see (again) that Capgemini is collaborating with many in this list (PROMÉTHÉE Earth Intelligence, Ascendance Flight Technologies, WhiteLab Genomics, Yogosha, etc.).
 
We will continue to play our role in identifying tomorrow’s champions and being their growth and co-innovation partners to impact industries and societies at scale.

Telecom operators are looking for a cost-effective operational solution to provide #5G connectivity to enterprises.

Network slicing can deliver the needed QoS & security while providing simplified operations and at the scale of cloud.

Working with Telefonica, we at Capgemini have designed and implemented a proof-of-concept for an end-to-end network slicing solution entirely provisioned and managed from the cloud together with partners like Microsoft.

Intel Corporation provided on-prem infrastructure for virtualized baseband. We worked with Ciena / Blueplanet, Juniper Networks, and Casa Systems, Inc. to build this first of its kind multi-vendor disaggregated network slicing solution that softwarizes the network as much as possible and simplifies the operations, orchestrating the entire solution from cloud.

Together, we’ve shown that it’s possible to build a broad ecosystem that can overcome the challenges of network slicing using end-to-end automation. The goal was to build pre-integrated network blueprints that can significantly reduce the cost of new network planning, design, and test cycles.

Read our point of view, 7 lessons from our network slicing journey.

Point of view

7 lessons from our network slicing journey

IBM Maximo application and iPhone deliver defect detection at a fraction of the cost.

Visual inspection is an opportunity. It is estimated that the market will be worth more than $25 billion worldwide by 2027. Companies are excited about the prospect of cost-savings, error reduction, better accuracy, and higher quality output. Automated quality assurance is the utopia all manufacturers want to achieve. The pandemic helped the process along, as companies tried to reduce the amount of human intervention. But finding the right skills and experience to manage a visual-inspection system can be challenging and it is an expensive investment.

Visual inspection is an application of computer vision with machine learning and artificial intelligence that helps humans make better products with fewer defects. It is much more efficient to find the defects during the process rather than fixing issues later or having to initiate recalls.

We have been working with Professor John Ward and his team at the University of South Carolina on a new way to perform visual inspections. Rather than waiting months for a system to be designed and installed, Professor Ward has created an easier answer. This leverages the IBM Maximo iPhone application as an input device to create a visual model using photos. The iOS devices are installed on the production line.

There is a beauty in the simplicity of using smartphones, but any visual-inspection system creates significant amounts of data. High-speed, 5G, millimeter wave, low-latency networks have to move high-resolution images to a system to analyze the information and communicate results in split seconds to stop a line in case of a defect. Having a system to collect information is only the first step. The power is in the data.

Our contribution is a comprehensive business-intelligence analytics suite that allows companies to drill down all the way to see the image of the defect. It means companies can look at the return on investment (ROI) per defect caught as well as all the way up to the line or plant or number of plants so the company can start aggregating quality data and use it more broadly. Instead of being a point solution, the visual inspection is now a company-wide node in a manufacturing machine.

We also bring an agile way of working and a focus on collaboration, iterative development, and continuous learning. This enables the rapid delivery of business value so ideas get to market faster. In addition, we further amplify the impact of agile methods by providing specialized expertise in the latest technologies, including cloud, automation, artificial intelligence, and high-speed private networks. From idea to launch, the advanced technology delivery team working from the development center in Columbia, South Carolina, helps visionary companies turn ideas into business value at industry-leading speed.

Dashboards make managing corrective actions easy. This can include identifying areas that need more training, since people are a huge variable in building products. The immediate feedback of real-time data makes operators more efficient. It also paves the way to a continuous improvement culture and mindset.

Visual inspection is about more than just quality; it can also be applied to sustainability initiatives that seek to decrease waste and increase accountability through managing more variables at greater levels of detail. As manufacturers trend towards Industry 4.0 with smart plant-control towers, private 5G, and edge computing, this visual-inspection application can provide the rationalization for these foundational technologies to finally present a clear business case for adoption.

Find out more about our partnership with IBM.

You only have one choice, right? Now consider this in the context of cybersecurity incident response where only 30% of businesses are prepared for an attack; or to continue the analogy, where almost 70% would drive on before they realize it’s too late.

An incident response plan (IRP) helps to protect your business, customers, and finances in the event of a cybersecurity disruption, and as advanced and unknown cyber threats gain ground, it has become a business essential. So why do so few have one?

One reason is that preparing for the unexpected takes time and proactivity. Many companies have vulnerabilities in their defenses that they haven’t prepared for, often because they lack the resources or board-level interest. And even of the minority the organizations with an IRP, more than half fail to test regularly. This means that many only assess the readiness of their plans at the worst possible time – in the middle of a cyberattack.

This is clearly unsustainable. As hackers increase in sophistication and entry points proliferate with increased digitization, an attack is not a matter of if, but when. While risk detection and mitigation are critically important, so is unlocking the value of major innovations and transformations, such as flexible working or connected devices. To move with confidence, organizations must be proactive, practical, and prepared.

Communicating your response

In 2021, a business suffered a ransomware attack every 11 seconds. By 2031, this figure is expected to be one every two seconds. While the global cybersecurity workforce is growing, the industry is short of almost 3.5 million workers. Cybersecurity professionals know this, and a study by (ISC)² shows that 70% feel like their organization doesn’t even have enough staff to be effective.

However, we know that a solid incident response plan is a critical step to business resilience. If you have your ducks in a row before a problem strikes and everyone knows what to do, you can overcome the challenge of resource shortages. Just like in an emergency room scenario, staff at all levels cannot be learning at the same time as the crisis is happening.

Communication is therefore one of the main challenges that organizations face during incidents. Many simply don’t know how to communicate effectively with internal and external stakeholders, authorities, and experts before, during, and after an attack.

This is essentially a human issue; in the event of security frameworks being compromised, even the most robust technology might not be enough. That’s why one of the most effective ways to prepare incident response is by running simulated scenarios where each level of the organization goes through the script and understands the consequences of deviating from it.

To do this, businesses need to define and triage risk into categories so that they can assign a severity tier from low to full crisis. This will help guide incident escalations, assign an appropriate service level, and inform stakeholders of the potential or realized impact of an incident. The severity level will also inform who is notified, what the escalation path will be and which playbook to communicate.

This way, response will be standardized and more easily activated, so when something unanticipated does occur, leaders can be more agile in dealing with it. Of course, it’s also critical that the sector-specific business context is properly understood so that organizations know exactly what to focus on.

By learning how to react quickly, how to isolate a threat, and understanding people’s perspectives and operational responses, organizations can potentially save millions within the first 24 hours: a huge saving built on practical and inexpensive measures such as email templates and step-by-step guides.

What your organization should do next

From manufacturing to financial services to life sciences and beyond, too many organizations find themselves underprepared at a time when they should be asking: “If a cyber crisis hits tomorrow, can our business still function and operate ?” Here are three steps your organization should take to ensure the answer is “yes”:

• Define your evolving risk level by conducting a comprehensive assessment of your organization’s incident response capabilities, including technology, personnel, and communication processes, and identify any gaps and areas for improvement.
• Proactively plan to protect against attacks by creating a detailed IRP that outlines the necessary steps and procedures to follow in the event of a cybersecurity incident.
• Embed rapid response capabilities to defend in a crisis by running simulations, establishing clear communication channels, and regularly testing your defenses.

At its core, IRP is a workplace cultural change that will prepare businesses to fully embrace technology transformation. This is a change which can only be achieved proactively, and it starts with communication.

But when resources are stretched, this might be easier said than done. That’s why Capgemini has crafted an effective approach to cybersecurity that can be tailored to your business needs, offering rapid real-time response to evolving threats through our seasoned Incident Response Team.

It is never easy to prepare for the unexpected and always easier to adopt the “it won’t happen to me” mindset. But the consequences of not having an IRP in place can be catastrophic and cost your company more than just millions, but its reputation. Implementing strong IRP and end-to-end cybersecurity will ultimately do far more than manage risk – it will unlock opportunity.

Contact Capgemini today to find out about our incident response services.

Small financial services institutions are naturally positioned to ride the Web3 tsunami of innovation.

Since “Web3” entered the mainstream media discourse, the conversation has focused on how big brands—like Nike, Starbucks, Disney—are gaining valuable first-mover advantage in a new paradigm of community-building and brand engagement. In the Web3 ethos of co-ownership and co-creation of value, the traditional line between companies and customers blurs: one-way transactions evolve into relationships in which both participants can create and receive value. 

Can Web3 provide a new level of scale to the co-ownership model of small financial institutions? At its core, Web3 is an innovative set of technologies and ideas for conducting commerce, building a community, running an organization and owning assets. Within this framework, we can imagine and contextualize new user experiences, business models and value chains. 

A new and improved model of co-ownership  

The model of co-ownership with customers is new for most businesses, but many small financial institutions—credit unions and community/regional banks—have operated within a similar framework for decades. Credit union customers are owners and benefit directly through low fees and favorable rates. Community and regional banking drives local financial activity, benefiting customers where they live and work.  

In recent history, small businesses turned to community banks for a bundle of financial services like deposits, cash management, lending and payroll. But the cloud super-charged the competition from national megabanks with deep resources. Meanwhile, nimble fintech startups with consumer product DNA attracted customers with useability, simplicity, delight and stickiness. 

Web3: A secret weapon against industry squeeze 

Fintechs like Square and Shopify rapidly changed the financial services landscape. Shopify rolled out financial services in 2016 and as much as 70% of their revenue now comes from “merchant solutions” products—directly competing with traditional bank offerings for small business. And a new breed of vertically organized fintechs—Toast, for restaurants; ServiceTitan for HVAC; Mindbody for fitness and salons; DoorDash for delivery; Miter for construction—have penetrated many small business categories with their bundles of tailored financial services and operational tools. 

Many community banks are scrambling to catch up with these modern fintech offerings. Instead of chasing from behind, small financial institutions should leverage their own DNA of co-ownership and co-creation of value to leap ahead. We can apply some of Web3’s big ideas—trustless coordination, high-velocity money, self-sovereign identity and programmable assets—to build the next generation of financial services and transform the relationships between banks, small business owners, employees, partners and customers. 

Four ways Web3 will accelerate breakthroughs in financial services  

Trustless coordination 

Web3 enables decentralized coordination among network participants, reducing or eliminating a reliance on top-down hierarchy or arbitration by trusted third parties. 

• Could we provide an intuitive on-ramp to business formation, with corporate structure, ownership and equity arrangements, profit sharing and other contingencies codified in smart contracts, automating the integrity of the business? 
• Could we give business owners a guarantee they’ll receive payment for a completed service or delivered product, without requiring a deposit or involving a third party?
   

High-velocity money 

High-velocity money signifies the increased frequency of transactions among participants in an economy, reduction in the time it takes to settle financial transactions and an upending of traditional banking hours. 

• Could we eliminate the traditional pay cycle and stream wages to employees by the minute or hour, from the moment they clock in?  
• Could we power a customer rewards or referral program with a wide menu of eligible activities that pay participants in real time?
   

Self-sovereign identity  

Self-sovereign identity is a model that gives individuals ownership and control over their digital identities and a say in how their personal data is shared, reducing reliance on a central authority. 

• Could we perform instant background checks and employment history validation when a job applicant presents their digital wallet? 
• Could we provide customers with the convenience of seamlessly transacting for a product or service in a physical space just by providing their ID?
   

Programmable assets 

Through the creation and execution of smart contracts, assets—from intellectual property to physical deeds—behave according to an independently verifiable, automated ruleset. 

• Could we transform lending arrangements through automated profit collection or royalty payments to create a self-repaying loan? Or inject ownership rights that expire when debt obligations are met? 
• Could we give employees spending power that automatically adjusts to revenue fluctuations, seasonality, macroeconomic data points or even the weather? 

Designing for a radically different near-future is a challenging exercise requiring the right mix of imagination and forward thinking as well as an understanding of the technical, regulatory and adoption hurdles to come. The Web3 horizon is just within reach as a new framework to build the future of financial services for small businesses. As blockchain financial instruments progress from niche to mass adoption, small financial services institutions can compete and win by offering small businesses a new breed of customer-facing and operational financial services. 

Already, frog is helping companies across industries ideate, experiment and evolve their technical and strategic approach to building in Web3. At frog, we help businesses focus on emerging behaviors that create and sustain profitable growth and make a company’s vision a market-changing reality. Many of the conventions that will underpin Web3 have been pressure tested by early adopters, and the space will continue to gain clarity as regulators lean in. Web3 forces a vivid reimagining of small financial services institutions, setting up early adopters to innovate and win. Now is the time to get started, shape the landscape and leap ahead of the competition. 

Read this article on the frog website.

The biggest competitive advantage over other insurers? Flexibility.

We define Flexibility of an application as “readily capable to adapt to new, different, or changing requirements.” In a world that is rapidly changing, it’s the key competitive advantage to seize opportunities and overcome challenges. For an organization to be nimble and agile, its technology must be Flexible. Moving core insurance platforms to the cloud can help, and Guidewire Cloud does just that.

The criticality of flexibility

Business is changing, and the insurance industry is not immune to that change. Market dynamics are driving those changes:

• Pressure on profitable growth while overcoming climate change, inflation, increasing supply chain costs, geopolitics, and the aftereffects of the pandemic
• A volatile regulatory landscape around financial solvency requirements, cyber security, data privacy, artificial intelligence, climate change, and consumer protection
• Evolving customer expectations around personalization, human empathy, self-service capabilities, and enhanced digital and omnichannel experiences
• Increased competition and disruption from insurance startups, tech companies, non-insurance competitors, and embedded distribution models

With flexibility in their underlying architecture, insurers can adapt to change. New data sources may emerge to assess and price risk better, to make more informed underwriting decisions, and to increase automation across both underwriting and claims processing. New partnerships may develop where integration of applications, solutions, and technology needs to occur quickly, to add business value through additional capabilities.

Resetting your digital core to enable flexibility

Modernized self-managed core systems are often significant upgrades on legacy systems. However, their inherent architecture coupled with how insurers implemented them inhibits flexibility. Insurers typically implement an on-premises core system that is saddled with customization with limited thought around experience, digital capabilities, data capabilities, and process efficiency. The architecture itself is not nimble enough to add integrations and new functionality at speed and scale. So, how can insurers reset their path to value realization?

The best solution is to work alongside an experienced transformation partner who is able to give the strategic insight necessary to leverage cloud to get the flexibility that legacy and self-managed systems lack. This gives insurers a seamless transformation while receiving the best industry advice available. Consulting with expert opinion also builds collaboration in the market. When considering this transformation, it’s vital to ensure you have the right strategy in place first.

Cloud architecture has several key advantages: scalability, speed to market, and extensibility. It is the latter quality that enables and unlocks business value—the ability to add new capabilities through development on the cloud, regular updates from the software provider, and an ecosystem of strategic partners. The self-managed solution simply doesn’t have the same extensibility as a cloud-architected solution does.

The value proposition of Guidewire Cloud—recentering your transformation

Consequently, the shift to cloud-native services is no longer a question of IF, it’s a question of WHEN. Moving to a service like Guidewire Cloud will enable organizations to invest in differentiating capabilities that add business value instead of putting dollars into the core transactional systems. Guidewire has made massive investments in Guidewire Cloud and continues to push new features around content, application, and infrastructure multiple times a year. These features power a modern, reliable digital core so insurers can focus on capabilities that deliver engaging, efficient, and easy experiences to grow their business.

It’s an often-overused term, but Guidewire Cloud “future-proofs” your core system. It sets the foundation for you to enable future capabilities and answers the following questions:

• How might you enable a leading customer and employee experience?
• How might you reduce underwriting and claims cycle times?
• How might you enable next generation data and insights?
• How might you enable digital capabilities?
• How might you enable an ecosystem?

The way to maximize investment in a cloud service such as Guidewire Cloud is to leverage an experienced partner with not only the skills needed to implement core systems but also the experience in implementing cloud-based platforms using a SaaS model. Capgemini can uniquely transition insurers to Guidewire Cloud and optimize the core platform, all while providing the transformation architecture to ensure customers reach their transformational aspirations. By transitioning to Guidewire Cloud and externalizing custom functionality outside of insurance core systems, insurers will reduce complexity, limit the cost to run their transactional systems, and enable the extensibility needed to remain flexible. Capgemini, with flexibility powered by Guidewire Cloud, can equip insurers with the ability to adapt to change, quickly and nimbly, without the stress of losing focus on other priorities.