"You can't maintain a paper mindset in an automated environment."
TECHNOLOGY
Is your management system not living up to your expectations?
Here are some tips to help you help your system to help you.
By Nancy Doucette
Listen to Dr. Laura, Judge Judy or Oprah, and you'll come away with a consistent message: People need to be accountable for their actions. Industry consultants are just as likely to offer the same advice when it comes to agencies getting the most from their automation systems. Agencies, and in particular owners and managers, need to have automation accountability. In other words, they need to be accountable for fully utilizing the functionality of the agency management system that's in place.
Too often, agency decision makers mistake lack of use for lack of function. So they decide to abandon their current vendor's system in favor of another vendor's product only to find the cycle repeating itself. The elusive return on investment remains beyond the agency's grasp because in order to get a return, there has to be an investment; and in the case of technology, that investment involves more than just signing a check. Agencies need to invest in creating proper procedures, automating processes, training, and education.
Industry consultants Mary Eisenhart and Cheryl Koch recommend that agency decision makers carefully evaluate their agency procedures to be sure they really need to change systems. "I've never walked into an agency where my best advice would be to change systems," says Cheryl, whose consulting firm, Agency Management Resource Group, offers agencies help with operations, sales and service.
"You can't maintain a paper mindset in an automated environment."
--Mary Eisenhart
To fully utilize a system's functionality, agencies must change their procedures, Mary says. "You can't maintain a paper mindset in an automated environment," she notes. "So if an agency believes its system isn't performing, perhaps it's because the procedures were never updated when the automated tools were implemented." During her 23-year career, Mary has worked in agencies as well as insurance companies, and she also has provided management and operations consulting.
In many cases, Cheryl says, agencies bought systems without giving any thought to defining procedures or changing their processes so that they could leverage the technology for which they'd spent a tidy sum. Now, five, ten or even fifteen years after they made their initial purchase, agency owners are confronted with hard market conditions that are demanding that the staff use system capabilities to their fullest. And when something as seemingly simple as printing out an app so an account can be remarketed isn't possible, or the information on the app has been compromised, owners often conclude it must be the fault of the system.
"Getting the most from your system requires commitment, involvement, and knowledge."
--Cheryl Koch
Procedures aren't outlined in the manual that came with your system, they aren't simply how to enter data, and they don't apply only to the CSRs. Procedures are global, Mary continues. Most producer-owners are broad-brush people, she explains, so participating in hours of brainstorming meetings while processes and procedures are defined doesn't come easily. But owners need to be involved, she emphasizes, because that's where the real accountability comes from. Owners need to know the business and what the tools of the business are; otherwise, it's like buying a racehorse but not hiring a jockey. "Middle management people can't write the procedures by themselves. The owners need to be there to make the decisions that only the owners can make." And those owners who invest in this process come away with a more complete understanding of how the agency runs.
Defining procedures and automating processes take a great deal of time because those participating in the activity have to think about every single process and how to automate it, Mary explains. Unless an agency reevaluates its processes in light of automation, all that happens is that the paper processes are overlaid on the automation system. A process that was manual is now completed using the computer, but the process itself is unchanged. Revenue per employee won't increase until producers and CSRs are able to work in a truly automated environment, and that is one of the key measures of an agency's success.
Once the procedures have been implemented, leadership is essential, Cheryl says. "Getting the most from your system requires commitment, involvement, and knowledge." Otherwise you wind up with an "everyone for himself" approach where for every person, you have a varying degree of automation. "In essence, everybody's running their own little agency," she quips.
Commitment also means making some difficult decisions regarding personnel, according to Mary's experience. "There are going to be those employees who lay down an ultimatum: 'If you do (whatever), I'm leaving.' Owners need to be prepared to say those three little words: 'We'll miss you.' If you're unwilling to be firm, you're not truly committed to the process," she maintains.
Are you feeling the pain yet?
In an industry that frequently jokes about its own inertia, the incentive to "work smart" has been lacking during the soft market. But the "renew as is" days are gone, and companies are lowering commissions. So even with the increased premiums that come with the hard market, lower commissions are forcing agency owners to reassess their processes.
But intense pain occurs when an agency loses a market--or in the case of one of Mary's consulting clients, loses all its markets for homeowners. She explains that the agency is looking at ways to automate more of its processes now that it's confronted with having to remarket 8,000 accounts at renewal--one at a time--to the surplus lines market.
"With commissions dropping, we need to be looking ahead," says Mary. "We need to think about staffing, using automated tools that I may be afraid to use, or acquiring technology that will better position us to serve our clients."
In preparing for tomorrow, one agency that Mary is familiar with debated the need for 19" monitors. Whereas one of the partners believed the larger monitors would enhance the staff's job performance, the other partner resisted pointing out that the 15" monitors they had still worked just fine, so why spend the money? Ultimately the agency purchased the 19" monitors and as it turned out, it was money well spent. The agency implemented a scanning solution and the larger monitors make it possible for the staff to see the agency management screens and the scanned material at the same time.
"There are a lot of solutions out there," Mary notes, "and they all look so good, or so bad, or so confusing. The truth is, a lot of them do the same things. So agency owners need to spend six months or so researching the products." This is one more of the costs associated with fully using technology. To achieve the desired result, owners need to devote their full attention to the research, which means they won't be selling during that time. If the agency has a true sales culture, however, other producers and the CSRs will be able to pick up the slack during this time.
The trouble with download
For many agencies, there's an inherent mistrust of the data that's in the database, and that sometimes contributes to the "let's change vendors" discussion. While there are certainly "rogue" employees who deviate from procedures and don't enter data into the proper fields, the bigger villain is download, according to Mary and Cheryl. "In our agency, we're actually turning off the download with our carriers," Mary reports. "Ultimately we'll be moving away from those carriers that make us do download because it messes up our database, making it difficult for us to perform money-making functions such as marketing campaigns, and communicating with our customers in other ways."
"What's the purpose of your agency's database?" Cheryl asks. "If you need to roll a book of business, your database is everything." To maximize its use in generating revenue, the database must be pure. So agency owners have another area in which they need to be accountable: they need to understand how the downloads affect the database and come up with work-arounds. Unfortunately, according to Mary, there is no perfect solution that is being implemented universally. That's due in part to the fact that each company's download overwrites the agency database differently. "You have to be vigilant about what these overwrites are," she counsels.
Cheryl concurs, advising the agencies she works with to audit the downloads they receive so they know they're correct. Of course, the need to do this reduces or eliminates any productivity gains you hoped to achieve with download. That said, though, failure to do so can take a difficult situation and make it nearly impossible.
Case in point: One of Mary's clients had to roll a book of business because the agency lost a market and discovered they couldn't. The database had been compromised by company downloads--fields were overwritten or eliminated. Five years earlier, the agency had done an initial load--had a pristine database--but in the ensuing years, company downloads had corrupted the data. "Now all they have is junk," according to Mary.
In addition to shutting off the downloads to prevent further destruction of the agency database, agency owners should attend carrier meetings and be clear about the problems these overwrites cause the agency. Carriers use their database for internal communication, storage and internal functionality, Mary explains. Agencies use their database for outside communication, so when downloads come in with capital letters and overwrite the data that the agency input, the agency can no longer use it for marketing campaigns without fixing it. "Tell the carriers what you want," she urges. "Carriers are saying: 'No one is telling us there's a problem,' so agents need to be more vocal."
Making the cash register ring
Agencies generally don't look upon the management system as something to use to generate revenue, according to Mary and Cheryl. In fact, though, it's a tool for discovering who the agency's best customers are, through the customer relationship management capabilities that are part of the system. "It's a way of serving your customers the best and serving your best customers the best. And it's a way of finding more customers and accommodating more customers without adding to staff," Mary says.
Customer service people can cross-sell and even run marketing campaigns from their desk once the database is cleansed and procedures are in place to be sure consistent workflows are being used.
But getting producers to think of the computer as "the file" can be a big challenge. Too often they think in terms of "input" rather than in terms of "output," Mary says. Producers need to be accountable along with everyone else in the agency. The producer is the one who looks at the risk, so the producer should be the one to fill out the app--electronically. Handwriting it out and handing it off to someone else to key in is an ugly vestige of the paper mindset, Cheryl says. "It's no different than when we had a typewriter. How have you automated the process when the apps are still being completed on paper? You haven't."
Applying the "think output" mantra will enable agencies to have good data and use it to do marketing campaigns and other moneymaking functions, Mary explains. "That's the whole point of how you make money using a computer system."
One step at a time
"You can't make your agency perfect in 10 steps," Mary notes. "It's OK if your progress is incremental. If you can improve your processes by 20%, that's a start. But you need to learn about the concepts and processes you're moving toward. And you need to be prepared to address staff objections--just like you'd prepare for a sales call to meet client objections."
"Agencies have always had somebody to blame for their technology woes--carriers or vendors--and haven't taken control of it. Owners need to say: 'I have what I have. I've invested in it, and while there may not be a huge ROI, I'm going to squeeze some 'R' out of it. That's why I bought it in the first place.'" *
For more information:
Contact: Mary E. Eisenhart, CPCU, ARM, ARe, RPLU, CIC, CPIW
Director of Operations for Oregon Insurance Agency, Inc.
Director of Consulting for Fournier Insurance Group, LLC
E-mail: mmeisen@aol.com
or
Contact: Cheryl Koch, CPCU, CIC, ARM, AAI, API, AAM, AIM, AIS, ARP, ACSR
Owner, Agency Management Resource Group
E-mail: cherylkoch@aol.com
Web site: www.agencymanagement.com