2010: The Year That Business Outcomes Drive Insurance Tech Buying

Ellen Carney
Insurance Experts' Forum, January 13, 2010

By all indications, the global economy is on the upswing, and the insurance sector, particularly health insurance, is one of the industries leading the recovery charge. But “recovery” doesn't mean the insurance industry’s technology buying behavior will be returning to the pre-crisis days. Instead of focusing on product features, insurers are now focused on achieving business outcomes, like growing customer wallet share and capturing emerging customer segments, such as Gen Y’s. This shift has big implications for insurance execs, business lines, IT, procurement, and of course the technology vendors who love them.

Forrester recently surveyed IT and business leaders in 166 mid- to large-sized enterprises in North America and asked them what they wanted to hear from their technology sales reps. Half of the respondents pleaded to have the focus on their company’s business challenges; 5% said they wanted to hear about vendor solutions, and--reflecting the fact that almost all tech has a business impact--the remainder wanted the conversation to address both. But when it came to the content of the vendor pitch, more than three-fourths of the respondents told us that meeting content was no more than a recitation of product features—stuff that a prospect could learn from a data sheet or a vendor Web site. How did vendors perform when it came to addressing the challenges of both IT and business stakeholders? Not so hot: Only 5% said a typical sales meeting offered this kind of content.

So, why am I writing about an issue that reflects something the vendor sales management should be fixing? Because the purchasing “network” not only includes internal stakeholders—IT, the LOB heads, the C-suite, and most importantly, users--but also the technology supply chain—the software and hardware vendors that supply the tech as well as the systems integrators and delivery partners to make it all work together. Insurance IT, procurement, and even business heads have to lay out the quid pro quo with tech vendors: “I’ll accept this meeting, but you better tell me something I didn’t know before or tell me something I should be thinking about.” Build in a feedback mechanism to procurement to capture these kinds of qualitative data points, with the “reprobates” getting crossed off the vendor list.

Tech vendors and their sales teams have to tie their portfolio of tech offerings to an insurer’s business outcomes.  For you tech vendors, it isn’t easy to re-chart the course of the sales organization, but it can be done. In a recent briefing with Darshan Dave, who, as Syntel’s Testing Services Director, spends about 80% of his time in pre-sales customer situations, related how he positions the value of testing by demonstrating how it can impact the business outcome if not done right. He goes so far as to ask: What would happen with customer satisfaction or sales if a new or upgrade application didn’t perform as expected? Yep, even non-sexy tech stuff like testing can be positioned to demonstrate business outcome.

What Do You Think?  Should insurers hold tech sellers accountable for delivering a measurable business outcome?


Readers are encouraged to respond to Ellen using the “Add Your Comments” box below. She also can be reached at

Ellen Carney is a senior analyst with Forrester Research, serving B2B technology marketing and sales professionals targeting the insurance, banking, and securities industries. In addition to publishing research focused on the strategies, best practices, and trends in how the financial services industry researches, procures, and deploys business technology, she is responsible for developing the global forecasts for IT budget and spending forecasts for insurance and banking. Ellen can be reached at You can follow her on Twitter at:

The opinions of bloggers on do not necessarily reflect those of Insurance Networking News.




Comments (4)

"Only 5% said a typical sales meeting offered this kind of content (identifying challenges of both IT and business stakeholders)."

How is it possible for a tech vendor to sell a solution without addressing these challenges?

The question from C-levels and IT should never be, "What can it do?" but, "What, specifically can it do for my bottom line, efficiency and/or customer service." As far as measurement, if the vendor's product does what's promised and is implemented successfully, ROI should be naturally measurable.

Posted by: Unknown | January 18, 2010 9:58 AM

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A farmer buys a new tractor when he knows it will pay for itself in a short period of time. That is business 101. Information technology should be no different. Sales people pitch what they think we want to hear. We have allowed the sales process to become overly complex with irrelevancy. It is up to us to educate vendors and get back to business 101.
Edward Kalbaugh, President & CEO, Allegent Advisors.

Posted by: kalbaugh | January 15, 2010 11:18 AM

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Good thoughts in the ever changing dynamic of software procurement. I've often wondered what so-called "magic quadrants" would look like if such Experts were financially tied to the success of their recommendations.

Posted by: Bill G | January 15, 2010 10:59 AM

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Indeed 2009 has been a year of contrasts. Ellen, you have extremely well captured, the need of the hour. Thanks

Posted by: aarti p | January 14, 2010 8:19 AM

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