Business Case Simplified: Producer Lifecycle Management (PLCM)
Investment in a top-tier Producer Lifecycle Management (PLCM) solution is not an insignificant expense and securing a budget can be a difficult undertaking. Vendors will often provide support in the way of a detailed business case and return on investment analysis, which can be helpful in gaining budget approval, however, in some cases vendor generated ROI analysis can be viewed skeptically and seen as lacking objectivity.
While an independent business case and ROI analysis is often needed to finalize a purchase decision, OpenSymmetry’s guidance to evaluate the vendor market can be simplified to one simple question: does the cost of doing nothing outweigh the cost of acquiring a modern vendor platform?
To answer this question carriers should consider the following:
Total operating cost including IT, operations, administration, and producer services
Opportunity cost due to limitations in strategic plan design which impacts profitability
Overpayment expense which is estimated to range from 2% to 8% due to the need for manual intervention and lack of automated retroactive adjustments
Producer feedback which typically shows a need to improve the producer experience by way of accurate and transparent payments, simplified access to meaningful reports and dashboards and other high value content.
The analysis work to develop a simplified business case typically supports a decision to take a closer look at the vendor market as it quickly becomes clear that older platforms have an inverse cost/capability relationship. Modern platforms reverse this ratio due to their focus on vastly expanded feature sets and business user configuration orientation.
Additionally, top-tier PLCM solutions have been designed with an eye towards total rewards (commission, bonus, points, trips, and other non-monetary rewards) and supporting a vastly improved producer experience, which further enhances business value. The idea of a single platform delivering high levels of automation and support for total rewards has long been the holy grail for carriers, but today’s modern platforms have the tools and features to deliver on that promise. Open data models and extensible platforms are now commonplace, and vendors have also incorporated high powered integration toolsets into their platforms to reduce the complexity of working with data from across the enterprise.
OpenSymmetry combines a deep understanding of the vendor market with insurance expertise and is uniquely qualified to help carriers jump start the process of developing a simplified business case and taking a high-level look at the vendor market. Our goal is to keep it simple. We provide the facts to support an initial evaluation, lead the charge on scripting vendor demonstrations to ensure carriers can efficiently gauge the market, and ensure carriers have the facts they need to justify an initial evaluation. We will take the lead scheduling and scripting vendor demonstrations.
Article written by: Tom Davis