Without mentioning names, commission tracking is particularly troublesome with one or more of the well-known systems. In at least one major system, it simply does not work. Do your homework and get references from current and past customers on this feature.
Electronic connectivity with insurance carriers and ancillary vendors is another area to look into carefully. The Electronic Data Interchange standards mandated by HIPAA should be well developed, but not all systems move electronic data smoothly or error free.
Scalability is another area to check out carefully. Most benefit agency management systems are also tied to other value-added tools that have nothing to do with agency data management. This is a strategic move on the part of the host vendor to bundle their services and disallow customers to purchase other best-in-class electronic products and make them all talk to each other.
Scalability is where the explosion of electronic product offerings is ultimately going. All Internet-based systems for employee benefits will have to interconnect in the years ahead. Quiz potential vendors on this issue and ensure that the vendor you choose believes in a philosophy of connecting electronic data with systems other than their own.
You want to have a vendor that can grow with your agency and Internet-based products that you may purchase in the future which have not yet been created.
Price is always a factor. Shop around for the nexus of price, functionality and vision for the future. The relative newness of benefits agency management systems currently translates into a substantial variance in price from one vendor to another. That variance will narrow as the market for benefits agency management systems matures and forces inefficient vendors out of the business while bringing about price convergence among the product vendors who will emerge as the best-in-class.
Picking a benefits agency management system vendor is not an easy task. Slick sales pitches abound. Pick a vendor that you can grow with. You don’t want to have to go through data conversion with another vendor in a couple of years. Given that prospect, you may prefer being poked in the eye with a sharp stick instead.
Davidson, a principal at the Davidson Marketing Group, can be reached at craigd@davidsonmarketing.com.
