In any business, large or small, there is one mantra that gets chanted over and over anytime the economy goes even a little weak: Cut costs. Of course when the economy completely tanks and ordinary citizens start wondering if they should keep their money in their mattresses instead of the major banks, the mantra does seem to get noticeably louder.

Generally speaking, cutting costs is good advice in any economy. Even when times are flush, you really shouldn’t be paying for things you don’t need, or paying more than necessary for the things you do need. But when money gets tight, you want to be sure you’re using what you have more efficiently.

One strategy that has had a major effect on insurance businesses of all sizes is moving away from purchasing technology that requires software and/or hardware. Web-based services are a “pay-as-you-go” model that eliminates the need for huge up-front capital expenditures, high maintenance costs and ongoing support costs, all while assuring the technology you’re using has all the latest features and upgrades.

Here’s how it works. Let’s say your business relies on faxes, and you send and/or receive enough that you need a dedicated line for your fax machine. Then one day the machine finally gives up the ghost. Normally, you would head to the local office supply or other electronics retailer and purchase a new machine. Of course, you’ll also need a spare toner or two, which adds to the cost. And you’ll then have to set up and install the new machine as well as find a place to dispose of the old one.

Your other option when the old machine goes is to sign up for an Internet fax service. With that service, insurance professionals can send and receive faxes on a PC, laptop or mobile device – no additional machine required. So you can eliminate the cost of the machine and the toner. You can also eliminate the cost of the second phone line since all faxes will be sent and received over the Internet connection you already have. Since the files come in electronically, you’ll be able to cut way back on your paper costs as well; you only print the pages you choose to print.

Larger, more complex applications such as a contact management or e-mail campaign management system provide even greater opportunities for savings because you’re eliminating the need to maintain both hardware and software.

Typically when you purchase a business application, you have to install it onto a server or servers (depending on the application and the size of your organization). Once it’s up and running, one or more IT people are required to keep it running at peak efficiency. That’s an expense, whether it’s internal or external. Then there are the monthly maintenance costs most software manufacturers require as part of the license. If there is a significant software upgrade, there is another cost, and you again have to call on IT to complete the process. If the server goes bad, there’s an additional cost to replace the hardware.

Moving to a Web-based model greatly reduces your overall costs. The big up-front cost for hardware and software is replaced by a small monthly fee. In most cases you don’t even need any involvement from IT to get the service running – it’s all self-contained. The same goes for hardware and software maintenance. It all happens behind the scenes, saving time and money while assuring you’re benefiting from the software’s latest features. Should a technical issue arise, one call to the supplier’s tech support group generally solves the problem – again at no cost to you.

This move to Web-based services isn’t just for “outlier” applications anymore either. Even core insurance applications, such as your office productivity suite, are now moving away from the traditional client/server model to being Web-based. The reason is simple: because keeping applications running is their primary business instead of a utility, service providers dedicate considerably more resources to that function than internal IT departments, resulting in greater uptime.

If you’re looking for ways to reduce your own business costs (and who isn’t these days?), considering moving some of your applications to the Web. It’s a great way to cut costs without cutting effectiveness.


Steve Adams is Vice President of Marketing for MyFax (www.myfax.com), a provider of Internet faxing services for individual home users, small businesses and large corporations. MyFax has won a number of awards in head-to-head competitions for ease of use, reliability and best overall value. He can be reached at sadams@protus.com.