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Making the Marriage Work

Pat Speer January 2007

Fantasy: convinced by your technology vendor that its bleeding-edge policy administration system will seamlessly integrate with your existing network and infrastructure, slide like butter down your users' palates and establish record turnaround time for processing efficiencies, you sign on the dotted line. You even astutely craft your acceptance speech for your company's upcoming "Highest ROI" award. Everyone loves you—even your agents.

Reality: Two years later, implementation continues to slog at a snail's pace, the systems won't talk, your team is overworked, the vendor has been bought by a behemoth that has lost you in the shuffle, and your boss, users and other stakeholders are screaming. You are stuck.

Best intentions by vendors or carriers often become the source of the greatest heartaches. But for many carriers, building successful relationships with suppliers is a matter of following a systematic approach-from strategic to tactical-and one that demands due diligence.

"Even determining your basic requirements takes a disciplined approach," says George Grieve, president of CastleBay Consulting, Austin, Texas. Grieve tells his insurance clients to establish cross-functional teams that can share the "buy-in" to feature/functionality requirements.

Using a policy administration replacement project as the example, Grieve recommends combining personnel from technology, product development, policy services, underwriting, and others with a vested interest in the project, such as the business side. "The first thing to do is have everyone have an honest conversation," Grieve says.

START INTERNALLY

Indeed, long before discussions begin with the technology provider, many insurers make the establishment of good partnerships with internal clients the priority.

"We start with informal conversations and, from that, articulate requirements into a project statement," notes Bill Garvey, an IT director for The Main Street America Group, Jacksonville, Fla. Garvey's team takes the project statement and builds in higher-level requirements, which specify why the technology is needed and how it will potentially benefit any one particular area. Once the project is approved, the team goes into fuller planning mode.

Garvey typically establishes a task force that includes representatives from the business side, IT project management, systems engineering, quality assurance and oftentimes security.

"We talk to everyone involved and ask all the questions: 'What exactly do we need?' 'How long will programming take?' 'What is the labor allocation?' They all have input to the scope and timeline. Then we take it to a more task-oriented vendor selection approach."

International Catastrophe Insurance Managers LLC (ICAT), a North American catastrophe insurance brokerage based in Boulder, Colo., investigates technology suppliers only when a specific business requirement has been identified. The growing, $140-million company, which provides catastrophe insurance to more than 60,000 buildings in 36 states, has identified several business requirements over the past couple of years, chief among them the need to replace its existing third-party claims administrator (TPA) with its own TPA, Boulder Claims. ICAT and Boulder set its sights on San Mateo, Calif.-based Guidewire Software's ClaimCenter. The three-month project included integration to ICAT's policy administration system and to Oracle Financials.

VERIFY BUSINESS REQUIREMENTS

"The business requirements can come from a business unit or from IT," says Joan Zerkovich, ICAT senior vice president, information technology. "As part of the budget process, we present the proposal to investigate the technology to our strategic leadership team, and from there create a set of functional and technical requirements for evaluation."

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