THE TOP FIVE AUTOMATION MYTHS
by Laura Nettles
Don’t let these half-truths hamper your use of computer technology.
Although computer technology provides a powerful resource to boost agency efficiency and profits, it’s not a panacea. Let’s take a look at five common beliefs about what automation does and doesn’t offer:
MYTH #1: AUTOMATION WILL IMPROVE PRODUCTIVITY
“Automation systems will help raise your productivity by offering a wealth of features: Prospecting, account rounding, professional proposals, application processing, policy detail, transactional filing, carrier interface, diary, renewal processing, claims processing — the sky’s the limit.”
In reality, poor implementation of these features will lessen productivity and profitability. Automation can come with a high price tag. Not changing the way you do business to take advantage of your automation systems features creates redundancies. Here’s an example:
Every automation vendor provides a central database for storing policy information applications, proposals, binders, certificates, auto ID cards, schedules, insurance summaries, and so forth. In theory, you can enter this information once and access it whenever needed. However, in practice, most Commercial Lines implementations have two databases: One on the agency management system, and another on some third-party software. This “other” database is usually a word-processing proposal or spreadsheet with complicated schedules that’s not integrated with your agency management system. The feature-integrated database provides limited benefits because you can’t use it to generate proposals or schedules of insurance. Automation, in this case, can actually make you less productive, less efficient, and ultimately less profitable.
MYTH #2: AUTOMATION WILL REDUCE ERRORS AND OMISSIONS EXPOSURES
“The best defense against E&O claims is a good offense, which requires clear and consistent documentation standards for every transaction with customers and carriers. Most automation systems offer the ability to monitor an agency’s transactional standards.”
In reality, most agencies use this feature only in service applications, with no automation of sales and marketing. This omission compromises quality standards and gives a false sense of security. Although you might think that you’re using automation to reduce your E&O exposure, you just don’t have effective documentation of every transaction.
MYTH #3: AUTOMATION IMPROVES THE QUALITY OF CUSTOMER SERVICE
“Automation allows an agency to gain instant access to current information about its clients and be ready to answer their questions.'
The reality is far different. To recognize fully the benefits of automation, your agency must process each transaction (phone call or letter) online — an impossible task. The result: many agencies and brokerages have hired assistants to help their Commercial Lines CSRs keep up.
To make matters worse, most agencies still maintain both paper and electronic files in Commercial Lines. What’s more, the electronic file can have many components: The agency management system, word processing proposals and correspondence, spreadsheets, etc., etc., etc. Automation hasn’t improved customer service — it has either stayed the same or in many cases worsened.
MYTH #4: AUTOMATION IMPLEMENTATION IS A PROJECT
“Most vendors help agencies implement their automation system as a conversion and training project. Although this implementation can be done in a few months, it usually takes a full year. Once the system is up and running, the project is complete.”
Automation is a process, not a project. It never stops. Technology keeps changing. Project managers need to become process managers. Your vendor should provide a major new release loaded with enhanced features every year. Unless you’re constantly reevaluating and changing the way you work, integrating the automation features with your workflows, you run the risk of creating redundancies and becoming less efficient.
MYTH #5: YOUR VENDOR PROVIDES ENOUGH TRAINING
“Once an automation vendor has offered basic, hands-on, button-pushing instruction to make sure that agency employees can use its system, there’s no need for further training.”
Training (like automation) is an ongoing process, not a one-time event. You’ll need to build on the foundation established by the vendor to integrate the automation system’s features with agency workflows — and that takes a tremendous effort. Changing the way your employees work requires educating them in concepts and ideas that enhance your workflow implementation. To maximize your automation investment, make training a process that continually hones routine and not-so-routine activities.
THE SOLUTION
How can we overcome these myths of agency automation? First, decide what you want your agency management system to do. Ask, “What business problem will this system help us solve?” In Commercial Lines, a common response is: “The computer will eliminate redundancy, making us more efficient.” With that answer in mind, you’ll need to:
- Have sales personnel learn how to use the computer
- Make the database your primary source for client information
- Replace paper client files with transactional filing
A high level of efficiency will require eliminating dependency on paperwork. Otherwise, the new computer system will create more work, not less.
Fear of the inability to service clients and the lack of sales force automation inhibit many agencies from giving up traditional client files. When most Commercial Lines departments automate, they intend to run dual systems for a year before going totally electronic. All too often, one year turns into two years, two years into three — and the change never occurs.
The solution: Begin by changing the way you file. Then implement the automation system to support this filing methodology. This is the only way to enjoy the full benefits of automating.
Once you’ve set a clear vision of what you expect automation to accomplish, design an implementation strategy that supports your goal. Because vendors keep enhancing their systems this will be an ongoing process.
The key is to synchronize your goal with the automation features and workflow changes you need to achieve it. Once you have this process up and running, you’ll begin to see an immediate payoff from your investment.
Laura Nettles is president of Nettles Consulting Network, an Atlanta-based firm that helps insurance agencies and brokerages maximize their profits by integrating technology, workflows, and people, For more information, call (404) 325-0023, e-mail [email protected], or visit www.nettlesconsulting.com.