Many agencies’ back office processing operations—or all non-client-facing, non-value-added functions—amount to black holes of inefficiency. Submissions go in and policies come out, but staff time and creativity can vanish without a trace.

Management frequently lacks the resources needed to measure productivity and ensure consistent improvement, and back office workers may believe that management doesn’t truly understand what they do. In short, back office processing is necessary but expensive, and it frequently amounts to “busy work” for even front line employees.

Clients do not value the time employees spend typing policies, but a 2003 Rough Notes survey revealed that the average customer service representative spends more than 50 percent of his/her work hours performing such processing tasks and less than half of that time talking directly with clients. Policy checking is not an agency differentiator, but fast, responsive customer service could be.

Few in the insurance industry believe that their back offices can become sources of competitive advantage—but they can. The key to back office performance lies in optimizing the crucial relationships between people, processes, and technology. Imagine the agency as a bicycle: technology provides the frame, processes serve as the gears, and people push the pedals. If the gears are not well oiled, then even a skilled rider using the best-made frame will struggle. But a great gearing system, like a great back office, allows the rider to conserve energy and perform with maximum speed and efficiency.

Far too many program administrators and MGAs underutilize staff by allowing them to spend countless hours juggling menial tasks and by failing to recognize their potential to create value. Management could achieve astounding results by establishing performance standards, identifying inefficient processes and streamlining workflows. Redirecting tasks and freeing producers and account executives from back office processing functions would inevitably reduce costs and improve throughput, increasing time available for quality underwriting and value-added services like risk mitigation and stewardship reports. Such changes would simultaneously boost retention and create new business opportunities.

Most workflow efficiency programs focus on technology solutions like the introduction of new agency management systems or automation applications. But veteran managers understand that, while IT systems projects are important, they are also costly and slow to implement—and they frequently fail to meet expectations.

Various process improvement techniques such as Lean Process Mapping and Six Sigma can drive the streamlining process by uncovering hidden costs and inefficiencies while removing sources of backlog and unnecessary burdens on workers.

An increasing number of agencies are taking it a step further by delegating routine tasks from overqualified internal employees to proven outsourcing providers, allowing internal staff to redirect their energies toward the activities most valuable to clients and markets.

When applied in combination, these approaches can become true force multipliers. To paraphrase acclaimed Good to Great author Jim Collins, they allow management to get “the right people in the right seats on the bus.”

What does this mean for your agency? Freeing your staff to focus on the activities that contribute the greatest value to the organization will improve speed, service and flexibility, raising your revenue per payroll dollar. Time and labor redirected from the routine to the interactive, from the impersonal to the personal, will increase your competitive advantage and allow you to spend more time on customer-delighting activities and innovations. These changes won’t just drive profit toward the bottom line; they will generate creative energy throughout the organization.

Dan Epstein is the CEO of Resource Pro. He can be contacted by e-mail at Dan@resourcepro.com.

ReSource Pro specializes in assisting insurance organizations to transform their insurance processing operations into growth and profit centers through process improvement and business process outsourcing.