Outsourcing insurance process comes handy when experienced skill force is hard to hire and expensive to maintain. Although outsourcing has earned a notorious name for vices like slashing staff counts and overheads, yet it can be an added advantage and work as a credible asset especially for Small and Medium Enterprise’s to help them smooth the progress of operations, leading to remarkable and consistent growth and productivity.
For any agency to prosper it is fruitful to deploy knowledgeable workforce on new business development tasks and activities involving a greater level of interpersonal skills and decision-making prowess. Insurance personnel like underwriters and producers when engaged in activities like data entry, invoicing, rating, inspections, generation of loss runs and issuing policies fail to serve their specialized skills and are thereby overqualified for the task at hand as their talent cannot be optimized to the max.
What is important is to understand and ensure that the outsourced resources help in smoothening and accelerating the everyday back office operations of the agency without causing any glitch in the reliability and safety. Apart from this, also creating a competitive edge in several spheres like process quality, boosting employee morale, reducing cost of operations and aiding in the development of the agency without any interference in the agency operations.
Listed below are seven pointers especially for SME’s for carrying out due diligence on Insurance process outsourcing than could be beneficial to combat critical issues and foster productivity and profitability:
1. Outsourcing implies development and not Deductions
As the famous line from Thomas Friedman goes, “the best companies outsource to win, not to shrink.” This statement should be taken as a cue to incorporate outsourcing in terms of driving innovation, accuracy, faster turn around and cost- effective operational feasibility for overall development and market recognition. This will lead to tap greater potential and not simply downsize for cost cutting.
In situations where an agency is adept with experience rich, skilled workforce the goal is not to downsize for cost cutting and lose the valuable manpower but to outsource routine operations and make the best use of the rich resource at hand by deploying the staff more effectively in areas that are at par with their potential.
2. Keeping check on systems and security, a critical measure
A general tendency for most BPO’s is to merge their client management systems into their own so that they can operate in a faster easier and cost effective manner. The only demerit of this type of business association is that if the business relation is short-lived due to cost cutting or service faults then the company in question can experience work logs affecting its back office functions.
One solution to keep this at bay is to allow the outsourcing partner connect to your internal systems on a remote operation basis and help manage your processes, becoming your add –on agency. This would function in a similar fashion as connecting to a remote server from home, so they can easily connect from their office. This helps in securing all the information in the company server and should there be any termination of the outsourcing relation, a change of password can help secure and continue the streamlined operations of the agency. Always remember to keep control of the access and security systems to vital data and information.
3. Communication is the backbone
A relation between the agency and service provider rests upon a strong line of communication to help understand and combat operational challenges and achieve goal specific objectives of your organization or agency. For ensuring this, it is essential that the service provider has a functional head office in the United States. If troubleshooting or help with local support were required, this would be of assistance in offering quick response.
Another important element is to check the staff quality of the service provider since the company employees will have to be in constant communication with the service provider employees as such it is crucial that these employees are able to communicate professionally and responsively with the internal staff. Checking the educational parameters of the service providers staff as well as their English and professional proficiency might be helpful in this regard.
4. Implementation is the key
Sometimes outsourcing services may involve huge investments in I.T systems, training and operations. While others may not require it, it all depends upon the requirement and what type of association is required with the service provider, whether it involves migrating to other system or continuing own. At times there are hardly any changes incorporated leading to significant learning experiences eclipsed by the service provider. As such, it is crucial to know about duration of the implementation of outsourcing solutions, comparison of costs between service providers and references from other client experiences of the service providers.
5. Internal support for external success
For any outsourcing project to be profitable, it is essential that the in-house staff is supportive and contributing to the success. However if purpose is to downsize outsourcing is not a sensible option for SME’s.
To make sure that both the staff and the outsourcing resource work hand-in-hand it is important that the staff be made aware of the reason for incorporating the IPO solution and how they could benefit from the same. This would rekindle new zest to perform and in a more meaningful manner as they would be relieved of their low-value tasks and be able to engage themselves for more opportune tasks.
It is the core responsibility of the management to clearly define the requirement of the IPO solution to the staff as a competitive edge not only for the organization as a whole but also for the growth and development of its employees.
6. Due Diligence for performance worthiness
One of the best ways to decide whether it would be great to associate for a long-term relationship with the service provider is to insist on a trial period of the service provided. This could be extremely effective in developing a comfortable work relation with the service provider, their work quality and process maneuvers. One could also insist on getting to know their record of accomplishment by getting in touch with their existing client base to understand the challenges, issues and solutions that they experienced with the collaboration and whether they were able to achieve the bottom-line on time.
7. Sensible Business Economics
No business can succeed without a proper worked out economical work plan. It is often considered that offshore solutions could work best for ROI when its quality control is well managed. For this to work one, should examine the in-house fully loaded costs inclusive of salaries, benefits, training, hiring, attrition, management supervision and then tally these costs with the outsourcing solution.
Outsourcing not only adds to the enterprise figuratively but also helps assist and support the enterprise in terms of operational flexibility and transferring monotonous routine work to be taken care of by the service provider and enriching the performance output and process quality to greater standards.
All the above points aim towards developing a confident and healthy attitude towards outsourcing for transforming organizations into efficient and productive enterprises.
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