Considerations when making a
significant but necessary tech investment
By Nicole Farley
Adopting a technology solution to streamline your workflow is a daunting step in the growth plan of any agency. However, it’s also a necessary one.
You may have no tech solutions at all. You may have a tech solution, but it’s one that you have outgrown. Or, possibly, you have multiple solutions that address different workflows but don’t “speak” to one another, i.e., are not integrated.
If any of the above scenarios describe your current situation, it’s probably time to reevaluate your needs from a business process perspective. The following is a guide for considering a technology solution to achieve your goals.
You might only need marketing automation, customer relationship management (CRM), a quote-and-bind solution, or a policy management system. Or you might need all of the above. Regardless, in order to make the right decision and maximize your return on investment (ROI) on your new tech solution(s), you need to ask and answer the right questions about your unique business needs.
Factors to consider
There are a few factors to consider when making a technology spending decision. The solution’s capabilities and the functionality of the solution you choose are obvious factors. Then there are the licensing fees, or the ongoing price of each solution. The third, and typically more overlooked, one is the costs in terms of cash, time, and resources that will be needed to implement the solution you choose to buy.
Virtually all software requires work to be implemented, if only to load your customer data into your new solution. If your agency needs (and wants) customizations of the core software, then costs can start to increase.
When you assess providers, it is best to weigh your needs against the costs in the context of the pain points within your current, manual business processes. Then consider the resources you have available (your budget) to find the solution and provider that will allow you to maximize the ROI on your spend.
What are your pain points? A good place to start when considering adopting a technology solution is to meet internally with all stakeholders and identify the processes in your workflow that you want to automate and streamline.
Where do you want to increase efficiency and reduce errors? What is the ultimate goal? Is it primarily increased revenue or reduced costs? Is it better customer service? What else is keeping you up at night? Once you identify and achieve internal consensus on the project’s needs, goals, and priorities, you can make an informed decision about your vendor.
What is your budget? If you are new to the tech space, you will want to get a full picture of what is available for the budget you have outlined. Is the solution “out of the box,” and what is considered an upgrade?
Make sure you take into account all the resources it will require on your side to implement the software you license. This can include tech, front office, and business resources.
Often, agencies don’t have skilled tech people on staff that are needed to help your vendor with the implementation, let alone implement with only internal resources. If this is the case, you will have to outsource to your chosen vendor or a third-party IT consultant to get your new software up and running.
When this happens, implementation costs can start running away while you’re still stuck with your old, manual business processes.
Free software solutions
If you are just starting out, free platforms can be a great way to get up and running quickly. However, there are costs to adopting a free platform when it doesn’t improve processes, reduce costs, and hopefully increase revenues. The cost of a free solution is that the time and resources you expend putting into a free solution that doesn’t help you could have been used to put in a licensed solution that works.
There are a few things to keep in mind when considering free platforms:
What will be the exit costs when moving away from the platform? Several platforms charge a large fee for transferring customer data. You will want to be aware of these costs before going “all in” on their solution.
What fees are assessed as you grow? Is there a transactional fee down the road, or is it a limited free period?
What does “free” contain? Sometimes it’s only basic options or limited access. This may be okay when starting out but as you continue to expand you will want to understand the potential incremental costs that lie ahead.
Next steps
So, what are the next steps? Consider the following:
Ask questions. Don’t be scared to ask questions. Adopting a technology solution is an investment and it is worth asking every vendor you assess questions so you are comfortable with your spend. No one ever regrets the time spent doing the extra research when it leads to an informed decision. Don’t be afraid to research newer vendors as well as established systems. There are pros and cons to both.
Lean on your peers. Set time aside to have conversations with peers in the industry. Ask them which solution they use and what process they used to decide on what worked best for them. Recommendations and honest feedback will help narrow down your search to the top three or four solutions that best fit your needs.
Book demos. You may be looking at solutions that cover different parts of your workflow or one that covers it all. During the demo, clarify which parts of your workflow will benefit from this, and if it takes more than one solution, ask how those systems work together. Remember to address the pain points that you outlined earlier in the process. Keep circling back to those.
Make sure to ask about the “standard” features and whether there are additional features for a fee. Make sure the demo addresses the learning curve when adopting, so expectations can be managed. It’s also important to discuss the training and ongoing support that will be available, because no matter how great the solution is, if no one knows how to use it then it’s not money well spent.
Think about your future. You will want a solution that grows with you. It is crucial to understand how a new system will operate with any of your existing systems or those you are purchasing at the same time. Data is king, and you want it to sync as best as possible.
Also, keep in mind that technology is changing rapidly, and you will want a system that allows for that change. It is worth exploring solutions that use AI and automation to power agencies. The industry is quickly moving toward this, and finding a provider ahead of the curve is a big plus.
A good place to start when considering adopting a technology
solution is to meet internally with all stakeholders and identify the
processes in your workflow that you want to automate and streamline.
As you look to grow, can the platform scale without incurring extra cost? You need to think not only about the increase in data but also the increase in users, which can quickly expand the licensing fees.
When working with newer companies, it is also a good idea to look at who their financial backers are to make sure there is sustainability with the platform for the long term.
Conclusion
Adopting a new technology solution is a significant but necessary investment that requires careful consideration. Make sure you identify your pain points so a clear goal is defined.
Dedicate time to research and book demos for both free and paid options, while taking note of the hidden costs, implementation challenges, and sustainability for the long run. Additionally, outline a budget, and ask the right questions to make sure the path you are headed down is the right one for your team.
While daunting, adopting a new solution can be a rewarding step in increasing efficiency, achieving your agency goals, and building stronger relationships with your customer base.
The author
Nicole Farley is senior vice president of Agency and Carrier Operations at Bold Penguin. In her role, Farley works to streamline the commercial quoting experience for agents and small business owners, working closely with several large enterprise partners and carriers to achieve mutual short and long-term goals and objectives.
