Apr 22, 2014 0
In their vendor selection and management presentation, one of Gartner’s Research Directors, Dayla Sullivan, recognises that we now live in a world where we are ‘super-fast consumers’. She goes as far as to say that speed can trump SLAs, pricing, ROI measures and even the importance of strategic partnerships when choosing an IT provider.
For the growing insurance MGA market, selecting the right IT system can be time consuming. Especially when led by business or underwriter-side decision makers who may not have first-hand experience of a full, comprehensive RFP process.
The basics are obvious, what they all do, prioritising what you need (chances are you can’t have it all on the specific budget, timeframe and capabilities available) and making the best decision based on the future plans for your business.
So aside from following a checklist, like the resources detailed below, what else could you look out for?
Useful supplier selection resources:
Nine steps to successful information technology vendor selection, TechWRITE, Inc. blog
The Successful Vendor Selection Process: Five Steps, About.com – Operations / Technology. Authored by James Bucki, Director of Computing Technology, Genesee Community College
Gartner Vendor Selection – Latest Vendor Selection Trends – Sourcing & strategic vendor relationships,presented by Gayla Sullivan, Research Director, Gartner’s IT Asset Management, Vendor Management and Procurement team
Gartner report for members or purchase: Agenda Overview for IT Services Sourcing, 2014
After discussing some of the main challenges of insurance technology selection with industry contacts, it appears there are some reasons people may choose the wrong supplier. They won’t affect all, but these have been highlighted as some of the uniquely insurance-related IT selection pitfalls:
- Short sightedness
Judgements based on only what a system can do now. Once it’s implemented what then? Can you control your operations and how quickly products get to market? Was the supplier product roadmap factored into selection? Was your business strategy for the next 5-10 years one of the key decision making factors? It may appear the ‘best’ decision at the time but if you are forking out additional funds next year to support a new distribution channel or scheme, what’s that term? Own goal.
- Blagging it
Are the people doing the selection process qualified enough? Do the selection panel know IT, your business and insurance well as a whole? Sometimes, especially in MGAs, only one or two people are truly leading the selection process and therefore may only have one or two areas of expertise – perhaps not enough to consider all of the selection implications.
- Image is everything
As a supplier we update our UIs, but in a technology forward world we are used to consuming good looking technology.
It’s very easy to show a simple, clean user interface quickly on a smaller device. Does ‘it looked just like a website’ during that demo take into account all of the functionality?
What lies beneath the technology? Is it built for the web instead of web enabled as an afterthought? Is the user interface stuck on top of lots of mashed together systems, (think putting lipstick on a pig), and what could that mean for future development, releases and support?
Don’t let how it looks in a flash on an iPad take priority over business benefits.
It sounds absurd but often people appear to put ‘brand’ and ‘image’ before features and functionality. This is common of business-side decision makers who, rightly so, may be thinking of their staff, broker or end user customers at the time.
But once in the process should it not be centred on the top level basics?
o What do the supplier’s clients say about the operational benefits?
o Where are the suppliers investing their money, product R & D and functionality? Etc…
- Keeping up with the Joneses
Ahh the bandwagon, I jumped on several during my school years in the form of Doc Martins and a perm. There seems to be a wave of enthusiasm for certain systems at certain times, often following a big marketing push or people copying one another – thanks to the close proximity of the London Market in particular.
Some people feel that if your competitor has a system, you should select the same system. The word being ‘select’ not copy. You don’t copy their business strategy entirely, perhaps you want to differentiate yourself and could benefit even more so from different tools to achieve that.
Competitors may not even have made the best selection (the negatives likely not to be promoted). Can your independent solution choice then make that difference to your operating ratio and profit next year, meaning you move up the Top 50 table ahead of them?
- The ‘experienced’ influencer
Somewhere along the way you may have recruited one: A political, self-serving person masquerading as experienced. Thought processes may include:
‘I know how to use this system, I’ve implemented it before, and I’ll push for it because it’ll be easiest’
‘If I don’t rock the boat and keep my head down I can leave in five years without having to change any systems’
‘My mate owns that company; I’ll give him my lead so we can go for beers together every week’
Some of these thought processes make sense – if you’ve implemented it before you are aware of the challenges. If you like someone within the supplier company, chances are you trust them and they’ll try and ensure a good job is done for you.
However, if persuasive, these types may lead you to a supplier decision, not based on company centric, future profit based reasoning.
What are your experiences of supplier selection challenges within the insurance MGA market?
And what have suppliers done, or not done, to help or hinder the process?
Want to find out about eInsurance system RiskWrite to see if it qualifies for your RFP process?
Then book a meeting or ask a question today 01923 312366 / firstname.lastname@example.org
Sabrefish’s RiskWrite solution is a line of business neutral, full life-cycle underwriting system with accounts, claims and an intuitive, multi-section product builder. An integrated broker portal and optional web front ends mean you can distribute your products in the way you choose, from one point of origin. Clients benefit from quote & bind, workflow referrals, auto-documents, bordereau management, auto-rating, multiple languages, currencies and taxes, product build and subscription business features; so they can process more business with less resource for a scalable future.