I want it all
How many times have you been frustrated by a client or management team who shies away from value analysis or prioritisation because we know we have to have it all.? Usually this means that they have a pre-determined solution and very often this is a software solution and lose site of the fact that we want to deliver the maximum business value as quickly as possible with the minimum amount of effort.
Here’s a conversation I recently had with a large insurer.
Me: Can you tell me what you are trying to achieve?
Insurer: We have a project called continuous cover whereby we want to send auto renewal notices to our clients and automatically renew their policies unless they advise us not to. This represents an enhancement to our customer service.
Me: And what do you get out of this?
Insurer: Our research (which includes our competitors and partners who are already doing this) suggests that we would increase our renewal rates by nn percent.
Me: What does that mean in financial terms – i.e. hundreds, thousands, hundreds of thousands (etc).
Me: So what do you need to do to deliver this?
Insurer: We have a spec that was written 18 months ago.
Me: 18 Months. This is worth millions and after 18 months you haven’t done it! What was so important that you have delayed for so long?
Insurer: Actually its the most important thing on our list – but its quite a big task and we think it would take a year to deliver.
Me: What’s so big about it?
Client: Why don’t you read the spec?
Me: I don’t want to read the spec – what do we need to do?
Ok – no need for a word for word replay.
Me: So let me see if I understand what you need
- Identify policies that are about to expire (but you already do this because you send automated reminders)
- Calculate the cost of an additional years cover (you already have this but didn’t realise it)
- Send a letter to your clients advising them that as a service they need to take no action if they would like continued cover for another year at a cost of xx (which really just means changing the copy of the automated reminder that you already send.
Insurer: Well yes – but that’s just the start
Me: What else do you need before you can launch this?
Insurer: Well – we would need to automatically create a quote for them to review, generate the policy documents, take payments, follow up where we could not take payment (actually it was quite a long list)
Me: You already have a back office system – is there any of this that you can’t do manually?
Insurer: No – but we don’t have the capacity.
Me: How many renewals are we talking about
More on the same vein
Me: So if we were to process these manually it would require 4 additional (temporary) semi-skilled staff. What would that cost for a year.
Insurer: I suppose xx
Me: Can we come back to my earlier question? You can wait a year (till we have it all) before reaping a benefit of millions; or you can have the minimum that gives you value (getting the letters out to customers telling them what the cost is) in a month. Of course this means that you have to spend a few thousand on people to input the policies manually while we automate the process but the increased renewal rates will impact your bottom line within two months. What’s your choice?
Insurer: Why didn’t we think of that!
Did I deliver value today? Oh yes I did!