Theres mounting interest in buying and deploying customer relationship management software packages as a way to better service internal and external customers. But many insurance carriers have also found that packaged CRM applications alone are no panacea.
Its not that CRM packages arent good at what they do. Instead, what most carriers have already learned, or will likely discover, is that existing (also called legacy) systems may stand in the way of letting CRM packages do their job. There is, however, a way around the problem that can save companies a great deal of time and money. It also ensures that carriers will maintain their technological competitive advantage.
The solution involves an integration technique called enterprise application integration. The process centers on the selection and integration of software called “middleware.” You might think of EAI as the most cost-effective way to build a high-performance CRM engine.
Using the automotive analogy, the best way to build a CRM engine is to carefully examine the “engine block,” which, in this case, is the combination of critical back-office systems. A closer look at the back-office systems will eventually dictate the need to make choices.
But first, its important to understand that back-office systems store the core information and transaction activities that are required to support a CRM solution. The systems are typically comprised of multiple “components” developed and maintained over many years. Policy administration, billing, agency support and accounting are just a few examples.
In many cases, carriers have multiple systems of each type to support different products or distribution systems. Taken together, these systems equate to an enormous investment made over time. These same systems also serve as collection points for invaluable intellectual property. The access to that information is critical to a carriers competitiveness.
For the record, however, most carriers legacy systems are essentially databases built on mainframe computers installed 10 or 20 years ago. Old as they are, they often continue to perform the functions for which they were created, and they do a remarkably good job.
But whats important to know is that any significant CRM initiative will likely require new, front-office CRM functionality that needs to be integrated with the information stored in the back-office systems.
The only hang-up is that most of the older systems wont support the functionality of new CRM packages. The challenge comes into play when the back-office legacy systems try to provide current, real-time information to the CRM software. In non-technical terms, it often doesnt work because most legacy systems just werent built to work that way.
For years, many carriers only considered the two most obvious choices to address the situation. The first is to replace the legacy system. In many cases, however, this also means multiple systems need to be replaced. In addition, it involves migration of data from legacy systems to these newer, state-of-the-art systems. It quickly becomes obvious that the time and cost involved in this type of change can be significant–if not prohibitive–in todays environment, where information technology resources are often limited.
Another approach is to search for and upgrade, or fix, the individual component systems that are causing the worst problems. But this fix-it-approach can be a painful experience in terms of cost and effort. In addition, it can often result in the creation of an infrastructure thats even more difficult to maintain over time.
The approach that is gaining increasing popularity is EAI, because it uses existing legacy systems and eliminates the need to retool major components, thus saving time and money. In addition, it allows carriers to retain the competitive advantages they may have built into their existing systems over the years.