Hyland Software's Document Management Blog

Best of Breed is the Best Approach for Insurance Document Management

// May 7th, 2010 // No Comments » // Insurance // Eric Willis

How many of you have purchased a new policy administration or claims management system from a vendor that said, “Oh, you don’t need an ECM system, we have built-in document management…”

Now I’m not going to say that they’re lying, but there’s a HUGE difference between just manually attaching an electronic image to a policy detail screen or an activity record and truly managing the content across your enterprise. So, here’s a quick top 10 of questions to ask your vendor when they say you don’t need an ECM system:

1. Can I scan my inbound mail directly into your system?
2. Will I have the ability to automatically connect new documents to a policy or claim?
3. How do I know if I am missing any documentation for a transaction?
4. Can I implement my records management strategy into your system?
5. Where do I store all of my accounts payable or human resources documents?
6. If I want to see claims documents from my policy screen, do I have to make copies?
7. When exceptions occur what do I do – is that now a manual process?
8. How do I provide access to documentation if legal doesn’t have rights to the claims system?
9. Is there a way to search for images if I’m not on a specific record?
10. Can you automatically notify our agents when they don’t send all the required documents?

Trust me – they shouldn’t be able to answer many of these questions very well, because that’s not what their system is designed to do.

This week I was actually down at the inaugural Duck Creek Insurance Forum in Charleston, SC and finally talked with another ISV that gets it – you can’t solve your customer’s problem when your technology’s not designed to solve their problem.

They understand that their core competency is to deliver a state-of-the-art policy administration system – not document management. Yes, Duck Creek has a document management component, but they know in order to provide a best of breed approach for their customers – they need to partner with other ISVs.

Hopefully this trend will continue with other policy administration and claims management vendors, but remember to keep the questions above in mind…

Core Values of ECM Meet Top Insurance Software Issues

// April 19th, 2010 // No Comments » // Insurance // Eric Willis

Last week Insurance Networking News published a news story regarding the release of new research from the firm, Strategy Meets Action (SMA). The research comes from over 100 hours of interviews with insurance executives and focuses on the top 10 issues facing insurers in 2010.

I was excited to see the results from SMA because several of the top 10 fit right into the core values ECM brings to insurance organizations – several of which we have already discussed through this blog. Three of the issues that hit closest to home are:
    
     #6 – Apply smarts to underwriting
     #8 – Holistically link customer communication
     #9 – Benefit from business optimization

Apply Smarts to Underwriting
One of the guiding fundamentals of ECM for insurance companies is the ability to enforce your underwriting guidelines and business rules throughout your process. Now, I’m not saying that an ECM system is going to replace your policy admin. system or your rating engine. On the contrary, ECM is a complementary technology that allows you to book new business faster and more accurately than your competition – without sacrificing risk tolerance.

Holistically Link Customer Communication
From the outside the differences between Customer Correspondence Management (CCM) and ECM can be hard to see; however, ECM applications bring value on two fronts. Many ECM applications provide the ability to generate and store customer communication, but more importantly they provide the ability to link communications with all other content related to a policyholder (correspondence, applications, declaration pages, notices of loss, estimates, interviews, etc.). This really gives policyholder services the ability to have a true holistic view of a customer.

Benefit From Business Optimization
Ever insurer wants to do more with less and ECM is one of the technologies that allows them to do that. I continually hear from prospects, “we need to figure out how to reduce our cycle times and take advantage of the economic recovery.” The key to doing this is to optimize your business processes. People think of ECM as just document management or imaging – but I’m here to tell you it does much more. ECM can be used to not just store content related to the transaction, but to process the transaction and even to manage the process itself.

I hope you can see that ECM can be one technology that can make an impact across multiple areas. Thanks to Deb Smallwood and her team of researchers – I look forward to your next report…

How Will The Healthcare Reform Bill Affect You?

// March 29th, 2010 // 2 Comments » // Healthcare, Insurance // Eric Willis

Last week I had the opportunity to spend a few days with Hyland Software’s Insurance Advisory Council. The group brings together representatives from every segment of the insurance market and provides great insight into how technology is helping sculpt the industry.

This meeting came on the heels of passing the Patient Protection and Affordable Care Act, which will impact each of the Council members. The members agreed that the legislation was a step in the right direction, but the resounding comments centered on the concerns of cost containment. The Council’s Director of Health Insurance discussed their recent success in the individual health plan market (400% growth in 2009), but are beginning to balance the benefits of increased premiums over increased claim costs.

I was surprised when she also shared that her organization is looking to alter some of their internal processes to better coordinate with government health plans and in some cases become government run.

The Council’s Director of Agencies & Brokers also weighed in on the Bill and shared his concerns on how it will impact small business owners that didn’t previously offer health insurance and the new 3.9% tax on nonwage income. At the same time, he was pleased to see that insurance agents and brokers will be able to sell health insurance both inside and outside of the exchanges.

In each market, they are looking at how they can leverage their existing investment in ECM technology to adhere to this and future federal legislation. This legislation is going to impact every department and they will need to use technology to quickly and effectively adapt to these pending changes.

It will be an interesting road ahead for insurance companies and I’m glad we’ll be in a position to help them take advantage of this legislation…

Part IV: Insurers Focus on Legacy Modernization

// March 15th, 2010 // No Comments » // Insurance // Eric Willis

You might be thinking what option is left, or… is there a bowl of porridge that is “just right?” Although there are risks and rewards associated with the options we’ve already discussed, an option often overlooked is enterprise content management (ECM). A truly enterprise opportunity, ECM affords not just the IT staff and business users opportunities, but because of its ability to facilitate information exchange with insurance core systems, ECM can positively impact an entire organization.

When I initially speak with most insurance executives and they hear the phrase “document management” or read about ECM, the thought that immediately comes to mind is document imaging. While imaging is a component of ECM, to assume that is the sole purpose of ECM is limiting. Insurance organization can combine the data from legacy systems with the modern technology of ECM to reap great IT benefits. Because ECM facilitates and manages the flow of information to and from all authorized channels – legacy systems included – IT departments experience shorter development cycles, lower maintenance bills and reduced support calls, and they have the ability to automate repetitive manual processes. Compared to any alternative, these results are most quickly and easily achieved by combining legacy systems with ECM. Insurance organizations also benefit from a business perspective by pairing the modern technology of ECM with legacy systems.

With both IT and business gaining value from the legacy system-ECM solution combination, long-term alignment of the groups is also a benefit. We’ve witnessed groups work together with joint expectations, efficiencies and objectives at hand that in past were worlds apart. Unlike any other alternative, an ECM solution paired with a legacy system allows organizations to take control of their future and allows room for modifications in response to internal and external changes.

As you know, our industry is embracing change now more than ever before. Insurers are changing their processes and corresponding technology to remain competitive, while minimizing organizational risk. Utilizing ECM in tandem with existing legacy systems provides the best opportunity for insurers to harness the knowledge of their history while ensuring success for the future. Insurers should look for an ECM solution with a development interface designed to empower business users to solve problems across line of business applications. If accomplished, the insurer will have found a way to not only automate processes and ease immediate business pains, but guarantee future success.

Part III: Insurers Focus on Legacy Modernization

// March 4th, 2010 // No Comments » // Insurance // Eric Willis

So… maybe replacement isn’t the answer, but what is? Should you build something new in house or maybe even buy a component and scale out when needed? Both are viable options that several insurers have chosen, but have different benefits and risks to consider.

Option 1: Build a Solution

Benefits
Business Control: When you build a solution internally, you have complete control to match your organization’s exact processes and expectations.
Data Control: An internally-built solution also guarantees strict control over your data and corporate intelligence as it existed in the past and going forward.

Risks
Time Intensive: Like any other major IT project, building a solution yourself will take a lot of time, but for this undertaking you will be responsible for every last detail.
Staffing: Meeting minimum staffing requirements can be a problem for many insurers who opt to build their own solution – after all, if it’s difficult to find enough people to maintain existing technology, it may be impossible to dedicate enough people to build a new solution.
Cost: Although you have internal control of every element, this can sometimes overcomplicate needs and requirements, which drives up cost.

Option 2: Buy a Component and Scale

Benefits
Potentially Inexpensive: Depending on the scope and severity of your most urgent problem, buying a component could be inexpensive in the short-term.
Quick Fix: Also depending on the issue at hand, you may have a solution to a simple problem up and running in weeks instead of months or years.

Risks
Scalability: Depending on what product and vendor you select, future growth and integrations may be severely limited – if at all possible.
Increase Silos: If every department is permitted to purchase a product to solve their most immediate needs, an organization may wind up with a bunch of point solutions that can neither accommodate growth nor interface with each other.
Potential Extensive Coding: Assuming the goal is to not only solve an immediate business need, but to reduce the data from existing legacy systems, the necessary interfaces are often built as one-offs and require extensive custom development and testing.
Performance Issues: If an insurer relies on its ability to weave together a collection of unrelated solutions, performance troubles are ultimately going to surface. With multiple products and solutions from multiple vendors, it is likely that the ultimate system will not result in a trusted, high-performing enterprise solution.

So if these options aren’t the right fit, what is? Next week I’ll share the answer in the fourth and final piece of this series on legacy modernization for insurers. Stay tuned…

Part II: Insurers Focus on Legacy Modernization

// February 23rd, 2010 // No Comments » // Insurance // Eric Willis

As I wrote last week, insurers are continuing to look at different ways to modernize their existing legacy systems. The first option that most insurance companies are looking at is doing a full system replacement. Yes, there are several benefits to this option, but there are also things you need to keep an eye on…

Prohibitive Cost
Deploying a replacement system is costly and resource-intensive, and many organizations simply underestimate the time and resources required. For example, before implementing a replacement, organizations must have a true understanding of both internal costs and processes – something many insurers are not used to measuring. Additionally, time required to implement a replacement is most often measured in years and not months. More costly in dollars – and likely in time – than any other alternative to managing a legacy system, replacement should only be considered if these resources are not an issue.

User Reluctance
Perhaps more underestimated than any other reason, user reluctance to use a replacement is a bigger issue than most insurers think – particularly IT leaders who are accustomed to technology changes. User reluctance is a factor that is hard to measure or completely predict, but a factor that can still cripple replacement projects.

In fact, insurers have been hesitant to change any systems out of fear of losing both short-term and long-term productivity from their often very experienced workforce – not to mention concerns about their potential inability to train employees in the new systems.

Speed of Delivery
Given the vast amount of data stored in legacy systems, replacements are rarely rolled out quickly. Because the legacy application has been in use for even as little as, say, 20 years (and that may be on the low end for many insurers), extracting that data and finding a way to integrate it into the new replacement may not be such an easy task and often requires extensive custom coding. Purely data-driven, legacy systems are great at outputting numbers and reports, but finding a way to use that data so that it makes good business sense often requires great data analysis to integrate multiple legacy systems.

Again, I know that there are benefits to replacement – especially looking at what you have today; but next week I’ll talk about some of the alternatives outside of a full replacement.

Part I: Insurers Focus on Legacy Modernization

// February 16th, 2010 // No Comments » // Insurance // Eric Willis

A few weeks ago I had the opportunity to spend the day with Gartner’s leading insurance analyst, Kimberly Harris-Ferrante, at our campus in Westlake. Throughout the day we discussed the current technology trends facing insurers in 2010 and one of the top themes from 2009 resurfaced – legacy modernization.

In search of efficiency, agility and the ability to innovate, insurers are quickly realizing their legacy systems often stand in the way of these goals. Still, several insurers are operating with legacy applications as their backbone. However, their successes are limited at best and at worst a liability for the organization. I see these as the top 5 problems with legacy systems:

1. Limited functionality limits innovation and growth.
2. Maintenance and staffing costs are high and growing.
3. Purely data-driven architecture prohibits access to business content.
4. Many are band-aided together and guarantee business silos.
5. Compliance and regulatory concerns are expanding.

While it is clear that something needs to be done, the options available to solve the problem can be overwhelming. In this series of blog posts we’ll discuss the business and technical pains insurers face as a result of aging legacy systems, the options for battling the pains and will advocate ECM as a viable solution. Faster and cheaper than replacing legacy systems and easier to use and deploy than other alternatives, ECM facilitates becoming a process-based organization. Process-based insurance organizations are more flexible, agile and responsive and, therefore, more successful.

A Strategic Approach to ECM for Insurers

// February 5th, 2010 // No Comments » // Insurance // Eric Willis

I just got back to Cleveland after spending the last four days meeting with some of the top ECM solution providers in the insurance space and it reminded me that ECM is more than a single application for insurance organizations. Over the past few years there has been a paradigm shift amongst insurers where ECM is being viewed as a strategic element to their growth plans.

For insurers ECM goes well beyond basic document imaging and is viewed as a tool to bring their process improvement initiatives to life. This was evident last week when Celent announced the Model Insurer Award Winners and included Kansas City Life for using ECM to modernize applications across multiple processes.

One of the main reasons why KCL was selected was because of their strategic approach to ECM and Steve Ropp’s views on using the right tool for the job. Steve’s team brings solutions from Hyland Software, Open Text and Datacap to execute their ECM strategy. Taking it to the next level, Steve even branded their strategy Operation Paper Storm.

If you are trying to figure out how to develop an ECM strategy; Steve has a session on this subject at the ACORD LOMA Insurance Systems Forum in May. Make sure to check it out.