Last Posting...

It has been many months since my last posting and a lot has happened in that time. This will be my last post on "Good Karma for Enterprise Software." I have turned my focus towards Software as a Service and joined Eloqua Corporation. Eloqua pioneered the space for on-demand marketing automation and lead generation. Specifically, we help B2B marketers execute, automate, and measure effective marketing programs that drive revenue.

• Drive revenue through more qualified sales-ready leads
• Boost marketing effectiveness
• Demonstrating value and accountability
• Increase efficiency and professionalism through automation
• Align marketing and sales

To learn more about Eloqua and how we are helping our customers drive revenue, and accelerate sales cycles, while increasing deal sizes and and close rates, please visit us at: http://www.eloqua.com/customers/customers.asp

Also, be sure to check out The Innovative Marketer blog. It is a great resource for all things B2B Marketing. I have not yet decided whether to start another blog, but if I do, I will be sure to link it back here. I hope you have enjoyed reading this blog as much as I enjoyed contributing to it.

Sincerely,

David

Back to Business - Part III - Final

So how can this insurance company resolve their complex process problems? There are a few critical components:

1) Recognize there is a problem and gain executive-level support
2) Determine the current level of process efficiency
3) Identify where you want it to be along with appropriate metrics, recognizing that change does not happen overnight
4) Select software that can help manage the workload better and ensure business goals are met
5) Roll-out the solution in a high value area to learn how best to leverage the software, obtain a quick win, gain support, and use that to shop around to other departments to get them excited
6) Monitor progress and revisit the processes to further optimize and tweak them for optimal efficiency

With a well-planned implementation, commitment, and the right software, they will be ideally positioned to achieve their goals. In this case, they wish to turn around quotes 96% faster and applications 85% faster.

It is nearly impossible to achieve these goals, or any process goals for that matter, consistently by manually directing workload allocation. Even with a basic workflow system, while it will likely improve efficiency over manual processes, it cannot "adjust the levers" to distribute the workload according to your key performance indicators (KPIs). That is why they need to ensure that their Business Process Management (BPM) solution can automatically distribute workload according to the business goals. When this happens, rather than seeing intense peaks and valleys in work completion, due to the over/under compensation that a manager will go through when tasked with manually controlling workload allocation, performance is much more smooth, steady, and predictable.

In addition, we all know that the constant in business is change. And it is happening at a faster pace than ever. However, what most organizations fail to recognize is that internal processes must adapt to these changes. Sometimes it is for compliance purposes or new legal requirements, but more often it should be because the business climate has shifted. As Darwin said, "It is not the strongest of the species that survives, nor the most intelligent, but rather the one most responsive to change."

If you use your business processes as a competitive differentiator, you will increase top-line revenue.

There are BPM systems, like Global 360's , that empower organizations to extract the maximum profit out of business processes - every time. Furthermore, they can provide end-to-end visibility across a complete process that spans multiple systems, departments, and people (e.g., loan origination, application processing, etc.), giving executives a true measure for performance and the ability to improve.

And that's the bottom-line.

Back to Business - Part II

I apologize for leaving you hanging on the last post. Picking up from where I left off, if you look at what all of their challenges have in common it is: poorly designed processes. Unlike many organizations, they actually know what their processes are, or at least what they are supposed to be. However, when there are no controls, the real world reality varies quite differently from the process design.

Take for example the new application process. While they are leveraging their Website to collect application information, most applications are still completed on paper - faxed or mailed in. Even if 100% were completed on-line, there is still the matter of how to process the application.

Unlike the auto insurance application and approval process, which is relatively straightforward, most insurance application processes involve many steps, systems, and personnel to reach a decision. After all, it is all about understanding and evaluating the risk - finding the best balance for the firm.

For this company, beyond the online form, their adjudication process is completely manual and involves a great deal of paper. They are far from unique. In most insurance companies and financial institutions, there is still a great deal of paper and manual processing.

At this point you may be asking what "manual processing" means. Imagine manila folders, filled with accumulated documentation related to an applicant which can include everything from a credit report, credit score, and photo copy of official identification to [particularly in the case of life insurance] lab reports, medical records, phone interviews, tax records... you name it, it's probably in there. Now picture that folder and stack of 10-20 just like it, landing on an Underwriter's desk, waiting to be reviewed. That underwriter may be collaborating with his/her colleagues during the review, adding notes, and other materials. It may be placed back in the filing cabinet, awaiting additional information. It may be routed to a specialist for a specialized review. It may sit while the Underwriter is on vacation. It may have to go to management for final approval. At the end of all of this, a decision is made and the applicant is accepted or denied.

From the applicant's perspective, there is often little feedback. As they wonder what is happening to their application...why it is taking so long...does it mean they are going to be rejected...should they get the ball rolling and apply somewhere else, etc. Many times they will call customer service to allay their concerns, but too often these folks are well intentioned, but grossly uninformed, saying merely, "The application is being processed." This is because they have little to no visibility into where the application is sitting and its status. It is a folder on a worker's desk, waiting for something to happen. This is not to mention, misplaced folders, lost documents, accidents, poor audit trails, etc.

This is a mere overview of but a single process. Multiply this by numerous processes and you can imagine why it takes many insurance companies, and this one in particular, so long to turn around work. It should also be no surprise that when you ask someone at an organization that is manually processing work how long it takes for something to be processed, they will have little confidence in the number they give. Although ironically, they will always be able to tell what their goal is.

Manual processes like the one outlined above and even those that may be automated fail to consider the priority of work. Take for example two applications, one an average application with an average $ value, the other a more more complex application and much higher $ value. Many manual and automated workflows are not sophisticated enough to differentiate the two. They are treated equally, but they are not. With a finite number of resources and a mound of paperwork, it is not unthinkable that the easy applications will be processed first. After all from a performance standpoint it can show how hard someone is working. The problem is the other more complex, yet greater $ applications, lag, ultimately frustrating the applicant and perhaps providing incentive for him/her to take the business elsewhere. Prioritization and allocation of work according to corporate goals is another key component for consideration in processing work.

In my final post on the subject, I will discuss how they can solve this systemic process problem and how they will benefit by doing so.

Back to Business

Happy New Year. Over the past few months, I was involved in an interesting sales cycle, working to help a mid-size insurance company with a few seemingly simple problems. It started with a discussion at a trade-show. This is the first of a few posts profiling their situation:

The Problem
This private company, like most, wants to grow. They have been around for over half a century, clearly understand their market and know where they can excel. However, over the years competition crept in. They are still the market leader in their primary lines of insurance, but growth has stagnated, margins are bare bones, and market share is decreasing.

They believe there are a few primary factors contributing to this:

1. High prices - the competition is undercutting their prices and while they have not engendered the same level of trust, saving money is a compelling driver to chose the lesser known provider
2. Slow turn-around on quotes - they rely on an independent broker model to identify new applicants, yet only 10-20% provide a bulk of the business. When a broker requests a quote, while the company does not know the actual turn-around time because there is no reliable way to measure, they estimate it takes 5 days. This leaves too much room for the competition to swoop in, provide a reasonable quote, and take the business. Usually the first one to provide a quote wins the business.
3. Slow turn-around on policy issuance - the application review process takes too long. Similar to slow quote turn-around, they have no reliable metrics, but estimate it can take 2+ weeks to issue a policy. Again, that leaves too much time for the competition to
   take the business.
4. Lack of "lead generation" through Underwriters - since they are spending so much time chasing documents for new applications, they are not taking time to drive leads from the independent brokers. Therefore driving more business from the same 10-20% of brokers, or increasing this percentage, is very difficult.
5. Delayed release of new products - the amount of retooling time required to just change a form delays the release of new insurance products.
6. High attrition in Underwriting - the inefficiencies lead to increased overtime, which frustrates and burns-out employees. Since they are known for good training, they ramp up an employee quickly only to see them leave for the competition. Compounding this damage, these employees talk to their old colleagues, who then leave to join the same company. Now they have lost multiple employees after having spent $thousands on training. They are unable to issue more policies faster as their current processes require additional human resources, which undoubtedly frustrates the independent brokers, who logically seek another provider to satisfy their client. All while further bolstering their competition. This is clearly a downward spiral.

These problems are certainly not unique. Next I will explore their primary challenge.