The Shipowners’ Club – Improving Insurance decision making
The Shipowners’ Club is a mutual insurance association offering Protection & Indemnity (P&I), Legal Costs Cover and associated insurances to more than 33,000 small and specialist vessel owners, operators and charterers around the world. The Club forms part of the International Group of P&I Clubs which represents over 90% of the world’s ocean-going tonnage.
Within the Shipowners’ Club, a wealth of initiatives are considered to support their strategic business objectives, such as improving levels of support & service to existing clients and brokers, which in-turn improves member satisfaction and retention rates, as well as meeting regulatory change. However, with initiatives competing for finite budget and resource, The Shipowners’ Club needed a consistent approach for evaluating relevant priorities to ensure appropriate allocation and prioritisation.
The Project Management specialists at Jumar worked alongside Shipowners’ Head of Business Transformation to propose the utilisation of a proven business model for managing strategy to ensure the alignment with the organisation’s strategic goals and to determine the relevant project priority order. The Balanced Score Card (BSC) framework, which is dependent on a defined set of qualitative and quantitative measures, considers whether a project will deliver the desired ROI, align the with long-term business strategic objectives and the organisation’s readiness to embark on such an initiative.
The BSC framework also provides an effective way to compare two or more ordinarily incomparable projects to determine their priority as well as prioritising ‘must-do’ projects such as mandatory regulatory changes that do not necessarily always score highly against strategic goals.
The Shipowners’ Club went through a five-stage process to implement their BSC framework. The first step was to align the strategic goals and associated strategy to the four elements of the framework: customer; financial; business process; and knowledge, education and growth.
Once complete, a mini working group was formed to assess the business value of each project (step two) by defining and applying measures to assess their alignment to strategic goals as well as the organisational and governance readiness to embark on them.
The third step assessed the intensity of each project to determine how complex the project would be and how quickly it could be delivered. This considered resource requirements, complexity, duration, likelihood of success as well as the impact of failure. Discussions were then held with each project sponsor/stakeholder individually, giving them the opportunity to openly challenge the assigned scores and ensure that a shared view was held.
Once agreed, the combined scores gave the business value of each project which was then mapped out as a visual aid for Shipowners to easily compare. Next, when added to the readiness scores, Shipowners were able to plot out each project on a matrix for an instant overview of which projects could be quick wins.
After completing this process, Shipowners were then able to begin implementing the programme of work and communicate this across the business.
Implementing a Balanced Score Card framework requires significant management commitment. It takes you on a journey and makes sure everyone thinks about how a project impacts strategy. A key area for me was how it enabled Shipowners to understand our readiness to undertake a project, considering both internal and external capabilities. In hindsight, we should have always used the Balanced Scorecard framework before conducting our Cost Benefit Analysis.
RANJITH KANIPAYUR, HEAD OF BUSINESS TRANSFORMATION AT THE SHIPOWNERS' CLUB
After conducting their review, Shipowners were pleased to see that many of the proposed projects were in line with business strategy. It identified that whilst at that point in time they were not able to embark on their data and analytics project, it provided the focal points that needed to be addressed for it to commence.
Shipowners were also able to identify “quick wins”, such as their director’s portal, which enabled access to reference documentation for meetings electronically, reducing carbon footprint and working towards the company’s digital transformation goal.
As a result of carrying out this work, The Shipowners’ Club have consensus across the board on the priority of work and can now clearly map all projects to their strategic goals as well as measure their benefit. This has also set the scene for next year.
In addition to the direct benefits that have resulted from this piece of work, this clear view of the company’s priorities benefits suppliers working with Shipowners who are looking to understand how they can add business value.
Implementing a Balanced Score Card framework within The Shipowners’ Club has proven invaluable. Working with Jumar, we have been able to prioritise the work required to achieve our digital transformation goals and have a clear view of the impact that each project has on our strategic goals. This has already delivered significant value to our members and brokers, and continues to do so.
SIMON SWALLOW, CHIEF EXECUTIVE OF THE SHIPOWNERS' CLUB
If you would like to know more about how a BSC framework can support your transformation programme or Jumar’s Project Management service, contact us.