Business Needs Drive Agent Tech Buys

When it comes to buying and updatingcomputer systems for an independent agency, there are plenty ofpitfalls to be avoided, but according to networking and systemsexperts, the biggest might be failing to consider the way theagency does business and how technology can play a part inthat.

“Whos got the best technology doesnt mean diddly,” according toEli Dabich, Jr., president of Synergy 2000 Inc. of Pasadena, Calif.Usually, he explained, an agent's decisions on purchasingtechnology products and services are made on an emotional basisrather than on the merits.

“Agency principals usually dont know that much about the detailof the day-to-day operations and where the bottlenecks are and whatthe strengths and weaknesses are,” asserted Mr. Dabich, whosecompany does systems integration for insurance and financialservices firms.

“The customer service reps know and the agent will make adecision that the CSRs like,” he said. He warned, however, thatCSRs are often long-term employees who are “not prone to rockingthe boat and changing things,” thus they are more likely to want tomaintain the status quo.

“That means picking a system where I dont have to reengineer myworkflow,” said Mr. Dabich, even though such a shakeup might beneeded to improve efficiency and cut costs.

Mr. Dabich maintains, however, that before making any decisionson technology products or services, an agency needs to reevaluatehow it does business and consider how it might restructure itsworkflow for better efficiency.

“They may also want to reevaluate their product set and thecompanies [for which they write business],” he said.

An important question for agents to consider, Mr. Dabich noted,is how insurance applications come into the agency–including fax,electronic and paper documents.

“My prediction is that you will have two commissionschedules–one for electronic applications and one for paper,” saidMr. Dabich, adding that commissions should be lower for paperbecause paper applications cost the agency more to process.

“I actually suggested [the two-commission approach] to aclient,” said Mr. Dabich. “It was like a giant light went on in theroom.”

When it comes to automating or updating an agencys workflowprocesses, getting the right software is often the stumbling block,Mr. Dabich observed.

“Hardware is cheap; its not your main cost. Its the softwarethats the problem. I can change my wife easier than I can changesoftware,” said Mr. Dabich.

In addition, “anytime you change systems, you have a conversionto deal with, and conversions are a bear,” he continued. “Here iswhere agencies get into trouble.”

If an agency already has an agency management system in place,for example, said Mr. Dabich, “you dont want to change that andmake the CSR mad.”

Mr. Dabich suggested, however, that agency principals need totalk with CSRs about the benefits of making workflows moreefficient via technology upgrades and improvements.

Overall, said Mr. Dabich, “agents are pretty damn smart when itcomes to technology. Agents have spent a lot of money ontechnology. My sole criticism is that they need to reevaluate theirbusiness first before they make a technology decision.”

W. Russ Taylor, owner of People Computer of Brick, Jackson,N.J., agrees that it is important to consider business needs whenmaking technology purchase decisions, and that software is the keyto productivity for agencies looking to make systems improvements.The first question an agent should ask, he said, is “what do yourmother companies want?”

Mr. Taylor, whose firm implements and integrates computernetworks, noted that it is important for agencies to considerimprovements for both their back office (administrative) and frontoffice (sales) systems. Newer software applications that combinefunctions such as letter generation, keeping track of customers andgenerating presentations might be of help where such functions arenot currently integrated.

“Contact management is the link between the back office andfront office,” Mr. Taylor explained. “The hardware is gettingfaster and cheaper, but the software is what you have to look at,and ask what will do the most for you.”

Mr. Taylor cautions that newer software with more functions“wont be as cheap as it used to be, but I think its going to offerthe bang for the buck.”

When it comes to delivery of software to the agency–either viatraditional disks and updates, or through the Internet in theapplication service provider model–Mr. Taylor favors thetraditional route. Having the software application in-house meansthat “no matter what, if the phone lines go down, you can stillfunction,” he noted. “I like the control factor that allows me todo it in-house.”

Mr. Taylor also recommends that agencies have a local technologyexpert nearby to handle any problems that come up. “Get someone youcan talk to face-to-face, someone you have confidence in,” headvised.

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, October 29, 2001.Copyright 2001 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.

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