Top 10 Software Buying Mistakes
Buying new software for your insurance business is really hard, yet it's also one of the most important decisions you'll ever make.
With insurance, in particular, the relationship between vendors and buyers has proven increasingly combative and stories of dream implementations that have gone according to plan are few and far between.
Sometimes it's the vendor's fault, but often, the customer hasn't gotten it right either. In an ideal world, the vendor would coach them through the purchase, but that isn't always practical.
So, here are the Top 10 things that customers tend to get wrong that you should look out for during your next purchase...
Not reviewing enough platforms. Too often, customers see the first system, think that it "does what we need" and buy it. Reviewing technology as an underwriter or broker is a distraction, so you want it over with as soon as possible. But how do you know what good or bad looks like if you've not seen a good range of offerings?
Either don't know or can't articulate what they want. It's not their area of expertise and ties directly into many of the other mistakes on this list. How can a regional broker know what they need from their IT architecture when they only know about the cloud at a surface level? Or how do we expect an MGA underwriter to understand what a quote journey should look like when they have no understanding of modern UX principles at all? This is why "you can build this stuff yourself" is a fallacy driven by the vendor, not customer needs. But that's an argument for another day!
Requirements are non-specific and macro. This ties into #1 and #2 in many ways, in that with so much to cover, customers often become non-specific with what they want. They'll say things like "does it do renewals?" when they mean "does it do automated renewals, which I don't need to touch?" - two different things. it becomes a checkbox exercise, rather than a deep-dive into exactly how the system works and how that fits into their business.
Requirements are too specific and micro. In the reverse, sometimes customers get obsessed about the tiniest things that don't matter. The colour or size of a button. The terminology of a feature. Where something is actioned from. You'll get used to those things and they'll probably change over time anyway, but don't sweat the small stuff. The art is knowing what the small stuff is.
Measuring by current processes. The biases of what you currently do or a system you used to used should be cast aside from the get-go. Think instead about what you want for the future, throw away your rose-tinted spectacles and plan ahead.
Thinking too small. Technology has come a long way. Explain things to vendors as you dream of them happening, not how they currently do. Let them dial you back, but don't limit your ambition to your current view of the world.
Buying based on relationships. I would always prefer to buy an amazing system from an idiot, than a rubbish system from my mate. You're not at school in a popularity contest any more - this is big business. Of course, there are elements of trust and matching culture that are important, but don't let your heart rule your head. Buy the best tool for the job.
Too much trust. Sometimes, not everything that comes out of a salespersons mouth is true, either both innocently or on purpose. It's unfortunate, but it happens. My general rule of thumb is that if they can't show it to me, assume it doesn't exist. And make sure you understand what it would mean for your business if that killer feature isn't in fact in place. Would it be a mild annoyance, or would it kill your entire business plan dead? If it's the latter, don't buy until they can show you it working.
Too much focus on price. Something is only expensive when it doesn't work. A £100k platform that does what you need will work out a hell of a lot cheaper than a £50k one that doesn't, because thinking needs to be shifted to value, not cost.
Thinking they can judge it themselves. Know your limitations. You're an underwriter, a CEO, a broker...no a technologist. Do you try to fix your car when it breaks down? Do you crack your own neck rather than visiting a chiropractor? Some of the best money you'll ever spend is finding someone who can get to grips with your business from an impartial standpoint, articulate what you need and present you with options. A few days of consultancy comes incredibly cheap when compared to a £100k system implementation that you're stuck with for the next 3-5 years. Bring in some help.
None of this means vendors are without their faults, but if we as buyers can keep our side of the transaction clear, concise and considered there is less chance of the vendor "getting it wrong".
Anything you think we've missed? We'd love to hear from you.
WRITTEN BY ED HALSEY
Any opinions expressed here are my own and not the views of any of my employers. They are personal views based upon a 15-year career in insurance across underwriting and sales roles at mainstream insurers, consultancy firms and technology providers.