How brokerages make tech spending decisions

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As systems that help agency owners make their brokerages more efficient continue to evolve, the process of changing those systems is one that is long, daunting and involves many levels of approval.

What these agencies will be spending their money on varies greatly. According to EBA’s 2016 technology survey, for example, 23% of survey respondents plan to purchase new laptops in 2017, 19.7% plan to purchase desktops, 15.6% plan to spend money on a website/portal and smartphones, and 12.3% plan to spend on client management systems.

At Atlanta-based OneDigital, Mike Sullivan, the company’s chief growth officer, says that his firm’s purchases are broken out into employee devices and corporate systems. For devices, such as tablets, laptops and phones, OneDigital has a consistent approach and maintains an approved list of options. All devices are refreshed every 24 months.

For corporate systems, the firm focuses on staying current with software releases and most new investments are focused on ERP/CRM options. “We’ve built a competitive advantage in a customized Microsoft Dynamics platform,” Sullivan says. “[That] runs our entire company. We went through a major update to this software earlier this year.”

As these purchases and changes can be large expenses, agencies have a review processes in place. According to the survey, 9% of firms planned to spend $1 million or more on technology in 2016.

Sullivan explains that decisions for corporate system changes are sponsored by OneDigital’s IT organization “in partnership with the functional area, such as finance, operations or sales.”

Chicago-based The Plexus Groupe is in the process of moving its agency management system to Vertafore BenefitPoint from Zywave. Mitchell Andrews, a Plexus partner, says the decision was made by the firm’s chief technology officer, chief financial officer and chief operating officer.

“This touches them the most,” he says. “This is not a decision that is producer-driven, it is agency management-driven.”

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Further, Plexus’ tech department has to be “100% on board that this is something we can live with for five-plus years,” he explains. “This isn’t a short-term decision. It is a big to-do.” The rest of the C-suite must be onboard, too, such as the CFO, as they ensure the profitability of the organization.

Sima Reid, principal of Long Beach, Calif.-based twentytwenty Insurance, also consultants with her IT person and senior managers. “When we are going to consider changing or expanding technology, our process is for our IT person to discuss the plusses and minus and cost with our senior team. From there, we make a decision to proceed or not,” she says. “As an independent firm, we are fortunate that if we find an opportunity to provide a higher, better level of service to our clients through new technology or an opportunity to operate our firm more efficiently and effectively we can quickly agree to move forward; that is our goal.”

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