Property Casualty 360, April 20, 2014 | Steve Wiser
The acquisition of new technology as an ongoing, long-term process. Approach the task strategically and gain a competitive edge.
There is no way around it: Success in today’s insurance industry hinges on an insurer’s ability to seek out and successfully deploy technology. And it’s no wonder as IT solutions address everything from compliance, risk mitigation, customer retention, managing expenses, efficiency improvements and more. Yet with so many technology options available, it is still an incredibly difficult and complex process to choose and implement the right automated technology for a business.
Vetting a tech vendor is a mammoth task that necessitates a strategic approach that views the acquisition of new technology as an ongoing, long-term process. Here are some fundamental tips on how to do so in the most effective way:
Technology Audit: The first step is to decide whether or not a company even needs a technology upgrade. The most effective way to determine this is to conduct an internal technology audit. An insurer must assess its current technology, determine what needs are not being met and anticipate future needs based on the changing business environment. Reliance on manual processes can be a sign that an insurance company is falling behind.
Using a Consultant: Once an insurance company decides to upgrade its technology, it must determine whether or not to continue the selection and implementation process with a consultant. The primary advantage of using a consultant is that he or she is a specialist, and will likely have much more experience designing and implementing new software. There also is a cost benefit to using an outside firm because the work is a temporary engagement that does not require a full salary and benefits.
Creating a Strategic Plan: The third step is to create a strategic plan that creates a path for the entire company to follow, ensuring that everyone is in agreement about the company’s technology needs. A strategic plan focuses the insurance company’s resources on top priorities and reduces the chance that money and effort will fail to generate a ROI.
Benefits of Custom Technology: The insurance company needs to choose between off-the-shelf technology or have a system custom-designed. Custom technology is created to meet the exact needs of the user and offers the most benefits. It can take advantage of new innovations, such as the Cloud, and more easily be upgraded to meet an insurance company’s changing technology needs in the future. If an insurer is using commercial software, it is likely its competitors are, too. Using a custom system can give a company a competitive edge.
Implementation: An implementation plan sets out a timeline, defines what needs to be done and by whom, lists any risks involve and specifies the resources assigned to achieve the company’s objectives. For a smooth transition from a legacy system, C-level executives must lead the effort. Often mid-level managers are given the responsibility without the needed authority to make things happen. This slows the transition, costing the company time and money. It is also important to designate dedicated point-people to support any transition. The implementation is the primary focus for these key staff members rather than being an added responsibility to their existing duties. When point-people have competing projects, it dilutes their focus and the implementation is treated as a low priority.
Training: In order to fully prepare the staff without overwhelming them with lots of new changes, begin the training process before the implementation. Remember, this is a process and should not be done all at once. Rolling out a new solution should be done over time to help orient staff who may be very comfortable with the outgoing legacy system. People can be informed about the pending changes though company emails and newsletters, or at staff meetings and formal training sessions. Make sure the point-persons will be able to answer any questions once the new solutions are being used, especially during the first few weeks.
Using the right technology enables an organization to boost profitability by more effectively delivering the insurance products consumers need in a way that is cost-effective and time-efficient. This requires insurance companies to have proper processes for determining their technology needs, identifying the best options and deploying the chosen solution. By following a few basic tips, these tasks can be completed with minimized disruptions to an organizations’ core business, enabling them to enjoy the benefits while gaining a competitive edge.