With regulatory change having all but consumed organisations in the last few years, most will be glad to see the back of the RDR. They will be hoping for some respite from the continuous change and a return to some kind of business as usual.
Given that the FTSE is back over the 6000 mark and consumer confidence is increasing, businesses are taking the time to re-examine what they do and why they do it. However, this is leading to many discovering that business as usual is no longer what it used to be.
When trying to answer the question, ‘Where is the value in my business?’ the rules of engagement have changed. No longer is a business’s value based on a multiple of its on-going commission. Suddenly service, retention, charge models and, most importantly, access to the consumer are being valued a lot more highly than just the underlying financials of a firm. As the market continues to strengthen, we see more value being placed on the potential of an organisation. This can clearly be seen in the £5 billion market capitalisation of Hargreaves Lansdown – now nearly half that of Aviva.
This is why leading financial advice firms need to focus on tapping into the potential of their clients. To do this, they must have quality, accurate data, as well as a good solution for interrogating that data to help them make informed decisions. As a result, Management Information (MI) is no longer a set of static reports or spreadsheets. Now it’s a dynamic and interactive tool that helps you make decisions. Unfortunately, while Client Management Solutions (CMS) hold the key to an organisation’s data, in many cases, reporting and MI are being built in as after thoughts, which ultimately leads to disappointing results.
As part of this review process, firms are also deciding what they do – and don’t –want to be. The CEOs I speak to are all clear that, while IT and software support their businesses, they are not the source of value in their business. However, on closer examination, many are surprised at how much of their revenue is tied up in IT and over-inflated IT departments.
Given a viable alternative, they would much prefer to outsource the provision of their IT and CMS solutions to a trusted third party that understands data and security. As well as enabling advisor firms to control costs and avoid nasty in year capital expenditure on hardware, this approach enables them to focus their attention on tackling the challenges of building value through their core business.
While corporate activity has been rife in the software CMS space over the past few months, the fundamentals for selecting a technology partner remain unchanged. Does their supplier offer a leading CMS, modern technology and innovative web solutions? Are they financially sound? Do they understand how technology fits into your business? Do they have data security in their DNA? Can they demonstrate a clear future roadmap for their CMS and evidence this with a proven delivery record? Finally, are they able to offer you a solution that allows you to consume the software as you would like, whether that is hosted or on-premise? And, if it is hosted, can they host all of your applications for a fixed cost with robust disaster recovery to truly provide you with IT as a service?
Once you have the answers to these questions, if they are not aligned with your strategy, then it is time to consider finding a more compatible solution provider.
Changing your supplier should be seen as a long-term investment in your business, adding value throughout the journey. What inevitably stops many businesses is a fear of change and, in particular, data migration. However, data migration should not be a noose that stops you doing what is right for your firm. If the supplier has invested in developing robust data migration services, this should not be a barrier to change – especially given the time and cost benefits available.
About the Author
As the leading global supplier of technology systems and software for the insurance industry, our role is to help insurers and brokers operate more efficient businesses. So whether you’re a global insurer or an MGA, a high street broker or a start-up with a smart new idea, we can be trusted to support you on your journey, whatever the destination.Follow on Twitter More content by SSP Limited