Given the number of core system vendors on the market, it may be unrealistic to examine all of them in any detail. However, limiting your software to only a few vendors introduces unnecessary risk into the selection process. If you don't want to read a lot of RFP's, consider this: you are embarking on perhaps the most important and expensive decision your company faces this decade.
Any roster of potential core system choices should include at least eight to 10 vendors at the start. It will give you a better view of the market, enable you to get a better sense of what's available in the market and uncover details of solutions that align with your strategy, potentially alert you to some of the hidden gems that you might otherwise have missed.
Shorter lists rely heavily on software analyst's reports, but over-reliance on these sources has scorched insurers over the years. Experienced observers looking at these reports may ask where have the vendors gone who were high on the list five years ago. The fact is, for various reasons, analyst reports are not all-inclusive. Some vendors with solid offerings won't make the cut because they haven't landed a sufficient number of clients. Others have simply not paid the fee to be considered. The right company for you could be among those absent. To develop your own list, by all means visit the analysts, but be sure to also check IASA, ACORD, and other insurance industry association sites. Seek vendors under the Exhibitor or Business Show links, which are neatly organized around core offerings. Better yet, attend these organizations' shows and take a tour. Search the Internet. Read white papers. If you need a commercial lines system and a vendor offers only personal lines, why consider them further? If you must have an enterprise solution, with everything from agency portal to general ledger, why look at best-of-breed offerings?
If you lack the time or expertise to manage your search, hire a consultant who has both. But think carefully about your choice: the interests of analysts paid by software vendors to get on their lists may diverge from those of the insurance company needing to conduct a search. Make sure you choose an expert obligated to you alone. "Search consultants" manage the RFP and product demonstration process. They help define your proof of concept requirements and offer services such as contract negotiation.
While you and your team define the technical and functional fit, pay attention to a vendor's culture and vision. Are you confident that this is a company you want to do important business with? Also, bear in mind that while a vendor may understand your needs today, its strategy may imply a future that may not synch with your own.
Read between the lines of the search process. When a vendor arrives for a scripted demo, how prepared are they? Have they understood your requirements? Do they really "get" insurance? The degree of their preparedness is indicative of how serious they are about having your business, and how eager they will be to serve you as a good partner down the road. Some vendors may transform a four-page script into a loose-leaf binder filled with creative options, software configured to demonstrate multiple solutions to pain points. Other vendors massage the demo agenda to fit their strengths, hoping that there won't be time in the meeting to expose weaknesses. A few, who "demonstrate" functionality via PowerPoint must have a low opinion of their audience.
Every demo you host should include a "hidden script," so to speak, whereby you can test the vendor's ability to demonstrate capabilities outside the requirements of the scripts you had provided in advance. You should notify the vendor in advance that you'll have one or two of these hidden scripts, without being more specific. A vendor's courage (or lack thereof) is revealed in these moments. Those willing to lift their hoods and show you the moving parts of their solutions despite their fear are likely to be better fits than those who chicken out.
Today's market has an abundance of robust software. Products have filled out over the last decade of trial and error. Richer functionality, broader components and stable technology are almost a commodity, but not quite. Dig deeper to discern the best fit for you. You may find your best fit involves considerations of culture, vision, creativity and courage.
You may not find such vendors on the analysts' reports if they don't have multiple clients. Certainly, there is risk associated with lesser-known vendors, but that must be weighed against the potential benefits. Among these are you will have more clout shaping the future of an emerging vendor, and risk-mitigation conditions in contracts will be easier to negotiate with an eager vendor. In any case, there are many known vendors who possess the intangible qualities referred to above.
Challenges will arise during implementation and production, so knowing that you can trust the people behind the software is invaluable. You're not going to find this important criterion measured in any analyst report. And while an unnecessarily narrow search may save you reading time, it may also rob you of an opportunity to find what you need in a long-term vendor partner relationship.
About the Author: Bill Garvey has over three decades of insurance operations and IT executive and management experience. Based in Halifax, Nova Scotia, Bill is principal of Eastern Shore Consulting, Inc., which assists insurers in building the business case for legacy system replacement, selecting the best software, and enabling a successful implementation. He can be reached at (902) 457-7350 or visit www.easternshoreconsulting.ca.