THE INTERNET CHANGES EVERYTHING AND WHAT THAT MEANS TO AGENTS
THE INTERNET CHANGES EVERYTHING AND WHAT THAT MEANS TO AGENTS
The heavily publicized success of Amazon and eToys has made us all aware of the changes that new companies, driven by their dedication to Internet technologies, are making in the business-to-consumer model. Amazon, a startup four years ago, is now the third largest bookseller in the world. eToys is now viewed by giant Toys 'R' Us as its #1 competitor.
The greatest changes, however, have been occurring in the business-to-business space. Forrester Research estimates that business-to-business e-commerce will grow from its current level of $131 billion to $1.5 trillion in 2003. The sweeping changes driven by the Internet are now affecting every aspect of business operations.
Customer relationship systems, contracts, field force compensation, inventory, shipping, receiving and warehousing are all undergoing radical changes to take full advantage of the cost reductions implicit in operating an e-business. Because--make no mistake about it--the surviving companies in the upcoming decade will all be e-businesses.
Agency operations: The way they were
But you have heard such predictions about e-business before. What does it mean to your day-to-day operation of an agency, with all the pressures you face from customers, operations, markets, and competitors? Allow me to drop back in time to two years ago, not that long ago--but almost a generation in Internet time, and examine how a typical agency was structured both from an automation and a customer service perspective.
The normal agency would have had its systems structured around a centralized server that would contain customer files, billing, accounting and proposal information. A dedicated line to the server would usually connect those using the system and there might be a few remote users who would dial in, with some degree of difficulty. From a design standpoint, all databases were centralized with access given only to staff.
Customer service was based on team approaches or alphabetical listings with clear divisions between groupings of customers. Beepers or answering services for after-hours situations also may have been included in the mix.
Agency operations: The way they can be
The future of agency operations is in an emerging group of service companies called ASPs, or application service providers. Throughout all industries this ASP model is causing radical changes in the way automated business services are delivered.
In the insurance industry, emerging ASP companies will leverage the new Internet-based technologies that all the major agency system vendors are beginning to provide. AMS has its Sagitta Browser for agency intranets; Applied Systems has its Warp agency/company interface; and Delphi (now called ebix.com Inc.) has various portal offerings for consumers and agency/company interface based on its ebix platform.
How will ASP-enabled services work in an agency? Rather than having a database physically located in your office with all its requirements for security, backup, etc., your data will be maintained at one central location. Authorized users would be able to come to this site and gain access to needed information as well as make permitted changes. The majority of these systems will require little or no software at the agency location since all software is running at the central Web server.
What does this mean to your agency? The first major impact is in customer service. Your clients will be able to report claims, access pertinent elements of their own files, make changes and print certificates and resolve some of their own service issues without involving your staff. Installation and rollout issues will not be a problem because access by your clients or staff will be from the browser that they already have on their PCs.
As this new service requires that less managerial time and expense be spent on managing data, systems and networking issues, agency principals can turn their focus to sales and marketing. The systems function for an agency can truly begin to be moved to outsource entities where you will pay a monthly charge as you would to the power company for usage. Because the ASP company services you plus many other agencies, its unit costs are much less than those of an individual agency.
Getting close to your customer also is more important than ever. Rather than having a large fixed office location, employees now can be deployed close to or even at customer locations. This becomes particularly important as the role of skilled enrollers for workplace marketing gains increasing acceptance.
Formerly discredited ideas such as agency clustering will regain strength because agents will be able to pick and choose the entities that they want to perform their back-office functions. Some of these entities, such as Metro Partners in New York, already are positioning themselves to take advantage of these new trends.
Other new tools such as Internet-based rating from InsurQuote and risk management and claims reporting from companies such as Axim also will follow this ASP model.
Agents' role in the new economy
Despite the enormous changes taking place as we accelerate into the Internet economy, agents still possess fundamental strengths that have not changed. Your role as a trusted adviser still is essential as the average person tries to sort through direct solicitations from banks, security firms, insurance and credit card companies.
However, customers must perceive agents as part of this new world. With the creation of ASP services on the Web, agents will have the tools to deliver great customer service while freeing themselves from systems issues. This will provide agents with the time to increase their customer focus. Back to our earlier point, only e-businesses will survive in the new millennium and there is no longer any reason that successful agencies cannot begin the transformation into winning e-businesses. *
The author
Dennis M. Maroney has had extensive involvement as a senior executive and consultant in electronic commerce and systems development with both insurance companies and Net startups. He serves on Taylor Haffner's editorial board with a focus on e-commerce.
©COPYRIGHT: The Rough Notes Magazine, 1999