Build vs Buy: Why it Makes Sense to Buy a Survey Management System
The Majesco Loss Control 360 team understands that there are many factors that go into a customer’s build vs. buy decision. The first thing you should recognize is there is no such thing as an effective off-the-shelf loss control system. The reason why is because loss control, unlike, say, premium audit, is different for each carrier. Those differences are driven by various factors, such as:
- Book of business
- Underwriting philosophy
- Coverages provided
- Size of the accounts
- And many other factors.
In addition, some loss control groups will be focused on service, others on small accounts, and still others on highly-protected-risk (HPR).
Each group is unique.
The carrier that focuses on ergonomic and industrial hygiene services may be very different from a carrier that insures only car dealerships.
The particulars of the underwriting philosophy also come into play. Some underwriting decisions may be highly automated — based upon a specific scoring mechanism — while others may depend on quality and long-term relationships, diversification, or specialization. Some evaluate against industry best practices, while others look to the history of losses and past performance to provide help and services to improve risk quality. Some underwriters view underwriting as deal-making and an art form, looking at social and legal trends. Others view it as a numbers game, looking through an actuarial lens.
Because loss control usually (but not always) serves as an underwriting function each loss control system is unique. In addition to underwriting philosophies, there are also different loss control philosophies.
Loss Control 360 can confirm that it is difficult, but not impossible, for a carrier to build their own one-off loss control system. This is because of the sheer complexity of the system. After all, would you want your home builder to have just one home under their belt? A typical loss control system will have in excess of 10,000 prompts, half-a-dozen or more interfaces, and connections to six or seven discrete user groups. In addition, the requirements are fluid, changing on a day-to-day basis. Just one feature, for example, diagram sketching, can involve a major development effort consuming a million or more lines of code.
Along with the complexity of requirements, there is also the complexity of operations. Once you add in the underwriters, loss control reps, producers, insureds, and fee companies, it is not unusual to have a universe of 5,000 to 10,000 users, even for a medium-sized company. All of these users must be efficiently served with their own set of features and functionality. If the developers are not used to dealing with a diverse user base, the risk of user revolt and system acceptance failure increases.
Often when a carrier decides to build a system in-house, they compromise by leaving out features that would be standard on a vendor-supplied solution. Whether it’s drag-and-drop maintenance, automated alert system or sketching features, something will be left out of the home-grown solution. And that “something” may offer unique benefits, without which the overall payback of the system suffers. A loss control systems vendor will let the carrier cherry pick which features are important.
Loss Control 360 believes in battle-hardened software
Software in the field is subject to all sorts of stress that the developers may not appreciate until things go wrong. User errors are common. And the more users, the more errors. Furthermore, there are concurrency issues when many users need to access a bottlenecked resource at the same time. Network dropouts and transmission errors can wreak havoc with system integrity. Timing issues are introduced when a world-wide user community tries to access a resource halfway around the world. Operating systems on tablets get busy doing something else. There are internal constraints with the network, the database, the web server, as well as local workstations.
Battle-hardened software can deal with all these issues and more… gracefully. The user will never know there is a problem because the software will automatically perform various recovery efforts until one works. All errors are automatically and invisibly logged behind the scenes and reported to the vendor. Battle-hardening can only happen with experience and large user communities. The more time and the more users, the more battle-tested it will be. In-house systems will not have the benefits of being in production over an extended period of time and within multiple environments. Consequentially it will not be as reliable as a vendor-based solution.
Here again, there are tricks you can use. A cloud-based hosting platform allows you to add servers, CPUs and bandwidth at will (for a price of course!). Furthermore, to improve response, multiple servers and database engines can be positioned around the world and synchronized back to a central database. Network unavailability can be addressed through off-line processing, useful when internet access is spotty or non-existent. On the software side, a vendor will issue — usually as part of the service — periodic updates improving the functionality and offering compatibility as operating systems and browsers evolve.
Whichever approach you take — building a system in-house or contracting with a vendor like Majesco — experience is key.
You do not want your developers learning about these production issues for the first time when the system goes live! The more loss control systems your analysts and developers have under their belt, the better off you will be.
Each year Majesco’s Loss Control 360 team has dedicated over 50% of our staff towards research and development, new features and quality assurance. We’ve chosen to build a battle-hardened product team first, with a guarantee that our software will stand the test, no matter what is demanded of it by the global P&C market.
And our numbers speak for themselves with:
- Over 15 million surveys completed,
- 140 + countries served,
- and 6 out of the top 10 carriers worldwide using our platform on a daily basis.
To see how our low-code configuration, customizable plug-in layer, and open API architecture can accelerate your implementation process, while also addressing the specific needs of your organization, contact email@example.com for more information.