Time to Talk About a New “First Rule”
Most of you are familiar with the cult film Fight Club, and it’s “first rule,” “Don’t’ talk about Fight Club.” The same could be said for outsourcing, which has endured its share of bad press over the years.
In actuality, outsourcing has come to play a central role in the growth of the global modern business enterprise. For example, some companies rely on outsourced technologies to bolster operational efficiencies inherently missing in outdated technologies, helping them keep up with the pace of growth and remain competitive. As a result, outsourcing solutions continue to have a significant, positive impact on insurance IT as well as business processes.
That said, insurers that have outsourced key aspects of their business processes have, over the years, been challenged with the misperception that they are unable to monitor and manage the business processes of outsourced workers who are working remotely. Those that offer such a critique fail to understand the importance of the long-term relationship between the insurer and the outsourcing firm, both of whom share a desire for positive results.
Some have suggested that it’s best to examine outsourcing by focusing on exactly what is happening—the objective truth. We believe this is the best way to examine how outsourcing should be studied.
With that goal in mind, let’s first examine what happens when an insurer obtains tailored business processes services, which often include rating, underwriting, policy issuance, accounting, document management, reporting and a range of services designed to improve customer retention. The more obvious result is the freeing up of critical resources that can now focus on the insurer’s core value proposition, be it new product development, first-to-market, superior claims services, etc.
Next, let’s examine what happens when the insurer engages the right outsourcing partner—one with deep line-of-business expertise that backfills specific areas in which the insurer requires expertise. Here, outsourcing labor-intensive tasks frees up resources that can be applied to areas most appropriate to the company’s core business objectives, fueling the insurer’s growth.
Finally, let’s review what happens when the positions often outsourced, such as policy services or accounting and financial services, are considered a vital part of an insurer’s core operations. If we consider these positions as “necessary work,” we see that outsourcing plays an extremely valuable role in an insurer’s day-to-day operations.
In this example, the insurer is looking at the big picture, and making decisions around fulfilling its business objectives using the most efficient, cost-effective means possible. This does not imply that the insurer is settling for a “quick fix.” Rather, they are evaluating how to solve the growing demand for different skill sets to fill an accelerating demand for customer service. For instance, billing services that include account bill, direct bill and agency bill, as well as and automated payment processing, set in motion a fail-safe, proven practice for customer satisfaction across the customer value chain.
Making good, solid business decisions around outsourcing’s value proposition creates a win-win for the insurer and their customers. And its objective truth is positive and enduring.
So, when we consider its true value proposition, outsourcing doesn’t have to be the industry’s best kept secret. Rather, it might be time to actually talk up that “first rule” and give outsourcing its proper place in the insurance industry’s toolbox.