One of the often-asked questions when investing in a software product to support your insurance/risk management process is whether to ‘buy’ or ‘build’.
A ‘buy‘ decision comes with two options:
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source and purchase an off-the-shelf product and customise it to suit your needs; |
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license a product as part of what is generally known as a ‘software as a service (SAS)’ model. |
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The SAS model is increasingly popular. The software can be sourced either directly from a vendor or indirectly as a value-added option, on top of an underlying insurance or risk management service.
The key considerations include:
The market offers several proprietary systems and packages, and you need to choose the one that’s most appropriate for you.. |
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Most packages will not offer you everything you want – employing the 80-20 rule can help you narrow down to the right product. |
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Product customisations are often expensive. |
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SAS-driven products rely heavily on the internet and you need good quality internet connectivity. |
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While most products are sold based on a demonstration of their utility value, the product’s ability to ‘wow’ does sometimes skew the decision-making process. |
Fundamental considerations
Both purchase models have their advantages and disadvantages. However, getting the basics right is what fundamentally determines successful implementation and adoption.
Your first and foremost consideration is to attain a clear understanding of your key requirements. You will have to carefully study, elaborate, document and then articulate to your vendor these requirements.
You should also make a frank assessment of the sophistication of your organisation’s risk management framework and capabilities. The tool that you choose should be able to address the weak points in your risk management systems and processes in place as well as complement their strong points.
The tool must also be flexible enough to be adapted as your processes evolve and mature. A considerable amount of forward thinking is needed to anticipate how your business will change, and in line with that, the capability of the software to evolve.
Be objective
Make your decision based on underlying functionality, features and ease of use of the product rather than the obscure ‘wow features’ that are often rarely used, if at all.
When in doubt go for a modular or phased implementation and avoid a big bang approach to implementation. In addition, ensure that support is readily available and you have a service level agreement in place.
Recognise the intrinsic value of the tool. Ensure that your vendor is adequately compensated for the tool and services, and ensure that they meet your service level expectations.
Appoint a qualified business project manager from within your organisation to coordinate and manage the implementation. This should be someone who understands your requirements and ensures that the tool is successfully adopted and more importantly, internalised.
JLT Interactive is a specialised provider of ‘on demand’ Insurance and Risk Management software solutions. Large enterprises around the world leverage the company’s flagship solution, the interactive suite, to improve the efficiency of their insurance operations and to enhance their management of enterprise risk. JLT Interactive’s hosted risk management applications support clients in a wide range of industries, from construction and energy to consumer goods and food services.
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