Nikki Jason is the VP, Global Marketing and Communications. For the first 20 years of her career, Nikki spent her time building an award-winning creative agency. She began working for ReSource Pro in 2014 and is now leading all marketing efforts across the organization.
Your insurance business is growing, but are you scaling inefficiencies?
When we build our businesses, we typically develop our operational processes intuitively. We identify challenges and begin to solve them to the best of our abilities. Over time, these practices become institutionalized and, hopefully, our business grows.
Then we get distracted by the day-to-day needs of running the business: hiring talent, serving our customers, developing new ways to stay relevant and grow. How often do we get a chance to revisit and improve the practices that we deployed back in the day? Not frequently enough, I would argue!
The acquisition strategies many insurance organizations are pursuing (2019 will be another record year for agency M&A, according to the Hale Report) only exacerbate this issue. With each acquisition, organizations must meld the different cultures, methodologies, technologies, and procedures set up by the leadership, all to varying degrees of success.
As M&A activity continues to reshape our insurance industry, how can we go about merging practices without losing efficiency?
Operations isn’t an island
Typically, we look to solve the challenges as they occur and deploy solutions to resolve isolated issues. We engage with external providers to patch together the most cost-effective fix. But is this the best approach? How can you avoid scaling inefficiencies? Try at least one of the following:
- Interrogate your processes. Inefficient processes can hold you back, and growth-minded organizations know this. Look at McDonalds—they scaled a global business out of a burger, not because of the quality of the burger, but the lean operations behind it. Operations became a mechanism for growth. Take a closer look at the impact of your operations across the whole organization. When you’re ready to turn them into drivers of growth, work with strategically-minded partners that are just as invested in your growth as you are. This can fast-track organizational improvement.
- Your team is the best—except at this. Workflow reviews and audits should be an essential part of your operations. Perhaps they already are. When performed internally, though, they’re done with all the best intentions, but can become part of the routine, another task in a vast to-do list. Ask yourself: How often do these internal workflow reviews institute significant efficiency gains? Internal teams simply lack the experience of working with hundreds of other organizations and seeing firsthand what works and where the pitfalls lie in process planning and operations. To make a real impact to your operations, partner with an organization that has deep industry knowledge and lean process expertise.
- Beware of the half-hearted RPA solution. Automation is one of the most exciting developments of the last 10 years for insurance operations. Digital transformations can increase claims processing efficiency by 30%, according to McKinsey, and who wouldn’t want to unload some of the routine tasks to robots?
One pitfall to steer clear of is the vendor with automation expertise but no industry expertise. We work in a deeply complex industry—hundreds of carrier and agency systems, thousands of SIC codes and 50 state agencies to comply with. It’s because of this complexity that our processes have remained analog for so long. And it’s also what derails many digital transformations.
A typical scene looks like this: An insurance organization hires a tech company to develop a robotic process automation (RPA) solution for some of their processes. The tech company delivers the customized bot to the insurance organization, cashes their check, and walks away. Within a few weeks, one bot gets tripped up due to a small change to a carrier site. The bot must be updated to navigate the change, but no one has the time (wasn’t it a lack of time that drew you to RPA in the first place?) and the team lacks the technical expertise to reprogram and debug the bot. Within months, the RPA tools set up by the tech company are obsolete due to the complex, always changing ecosystem of insurance operations, and the company returns to manual processing.
A company with both technical knowledge and industry expertise would know that any RPA initiative for insurance operations must be packaged with teams who can maintain the bots in order to overcome the complexity and talent shortages of our industry.
Move from intuition to strategy
Your processes may have started intuitively. But when you want to scale, you need to think strategically. Are you looking to make that jump as you grow and scale?