AMS introduced AfW Online in the spring of 2000 and Sagitta Online in the fall of 2001. In terms of benefits to the agent community, it was hoped the online offerings would be an option for those interested in outsourcing the management of their automation system. At the time of their launches, the expectations were modest. As with many successful ventures, the initial expectations were wildly exceeded.
In two short years there are over 800 agencies now using these ASP(Applications Service Provider) applications of AfW and Sagitta with over 8,000 users. By the end of 2002, it is expected more than 1,000 agencies to be using one of these ASP solutions. As a further indicator of market acceptance, the majority of AMS’ new sales for AfW in 2002 have been ASP versions. While it would be unrealistic to think that an ASP solution is perfect for all agencies, these results are clear indications that ASP delivered solutions are in the mainstream for the agent market.
As new technologies move from concept to production operation, some initial objections turn out to be benefits and benefits evolve from their initial perception as businesses employ the technology. Providing ASP solutions to the agency space is no exception.
Security versus benefits
Real and perceived data control and security concerns are important business issues to address.
Understandably, there were initial concerns from agents about outsourcing their customer database to AMS acting as an ASP. Data security issues must be addressed head on by any ASP vendor. The security model employed here includes the company-owned and managed data center in College Station, Texas that has received a security certification from TruSecure, a nationally recognized data center security expert. The certification is continuously maintained by following TruSecure’s rigorous standards that are reviewed on site periodically. While it is likely impossible to address all perceived issues of data security, it is believed proper procedures and policies do mitigate the business issues; the success seen here seems to validate that view. Reducing this concern has allowed agencies to focus on tangible workflow benefits such as ease of access and system administration.
One of the first benefits agencies realize is the true freedom to access the system wherever an Internet connection can be found.
A simple Internet connection allows full access to the agency system from home, on the road, virtually anywhere. In addition, for many agencies, outsourcing the technology management overhead of an agency management system can have significant financial and administrative benefits.
The Pinckard Insurance Agency with three locations throughout Alabama is an example where an ASP solution has helped.
Pinckard has experienced a 39 percent reduction in the monthly costs of supporting their AMS system by implementing ASP. There have been business improvements in addition to the cost savings.
According to their controller, Greg Wilkes, “We figured it would take at least a year to see the financial benefits, but profits in every single one of our locations went up in the first six months. What I did not and could not calculate was how a more efficient system would boost morale, thereby producing greater profits.”
Strategic business solutions
Initially, agents were interested in ASP-hosted technology primarily for the potential time and money saved by having a data center perform backups and upgrades. This has afforded the opportunity to outsource many IT functions. While cost and resource efficiencies will always be a leading reason to choose an ASP solution, an increasing number of agencies are buying hosted systems for strategic business reasons such as disaster recovery. The experience of Brown and Associates of Show Low, Ariz., an AMS agency using one of AMS’ ASP products is an example of why this issue has become important.
Brown and Associates were forced to evacuate their offices because of the forest fires that plagued the west this spring. Owner Mark Brown moved to an office outside of the danger area and was back in business quickly able to service claims. In addition, he was able to pick up new business as he was up and running, while some other agencies were not.
Moving from a cost saving to a strategic benefit is one way the perception of ASPs has changed for agencies as the technology has evolved.
Other considerations
Making any enterprise technology change is a difficult issue for many companies. With respect to ASPs in the agency market, decision-makers should be sure they are comfortable with a vendor’s answer to a number of key questions including:
1 Is my potential ASP vendor financially viable? Reliable?
2 Is my data safe? How is it protected?
3 Is my data available 24/7? When is routine maintenance done? Backups? How often?
4 Can I get my data back whenever I want it?
5 How are system updates done?
6 Do I have the same functionality as with my in-house system?
7 Does your ASP have a disaster recovery plan?
8 Who owns and operates the data center?
9 How will I receive support?
10 Does the hosting entity have application expertise?
11 What is the ASPs uptime history?
These are all key questions to ask, but in the end the answer will depend on the trust you have in the organization you are looking to do business with.
Where is it all going?
Agent acceptance of ASPs over the past two years has proven that this model is more than just a fad—it is a business option relevant to today’s market and tomorrow’s. The number of agencies using ASP-hosted systems will continue to grow, especially with the emergence of newer technologies that make ASPs even more appealing.
At the moment, it would be hard to predict that ASPs will replace all in-house agency management systems. Accordingly, AMS continues to see the need to offer both solutions and will help agents decide which is best for them.
One thing is clear; the success seen with this model makes it a business imperative for AMS to continue to invest in browser-based applications for both in-house and ASP implementations.
Dave Shea has been president and CEO of AMS Services Agency Markets since July 2002. Prior to AMS, Shea was president at The Thompson Corporation, where he led two units that served the tax, accounting and general business markets.
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