In today's environment of tight IT budgets, cost-effectiveness has become the top priority in most technology purchase decisions. That's according to a study released at this week's IASA Conference & Business Show in San Francisco by Lawson Software, a St. Paul-based automated enterprise software solutions provider, and KRC Research. According to the study, 96 percent of insurance and banking executives surveyed said the ability to provide ongoing cost savings is "very important," and 65 percent said the ability to increase efficiency is "very important" in determining which technology initiatives receive funding.
"The insurance industry is focused on expense controls and efficiency," says Tim Plunkett, spokesperson for Lawson. "Insurance companies can no longer afford redundancies. The survey results show that and it validates our position."
One of the ways insurance companies are attempting to reduce cost and increase efficiency is by using services automation to automate internal workflows, including incoming work requests and outgoing information for charge-backs, according to Plunkett.
The Lawson survey of more than 200 insurance and financial services executives, conducted in May, found that while 44 percent of vice presidents and department heads polled were already using services automation, only 28 percent of C-level executives in the study said workflow-like systems are being used in their organizations. This indicates that many higher-level executives are not familiar with services automation technology that is already in use at their companies.
Overall, 51 percent of executives polled by Lawson said that their respective companies were using a solution or system to automate the internal service department workflow process, with 38 percent saying their companies do automate internal service department workflow. "In the current economic environment, financial services companies are much more likely to maximize profits by reducing costs and increasing efficiency," according to Tony Marzulli, senior vice president of global marketing, Lawson Software. "In the end, it's all about the service sector and managing the efficiency and effectiveness of services provided to internal and external customers."
The survey also revealed that respondents with responsibility for internal service departments (IT, legal, marketing, etc.) believe a greater percentage of their staff expenses should be charged back to the departments or lines of business using those services. Currently, an average of 42 percent of those costs are charged back, according to the study, but respondents said an average of 51 percent of costs should be.
Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio