Summary: In the first of a two-part series on outsourcing, Steve and Ryan discuss opportunities for agencies to maximize profitability through outsourcing their operations. They look at why agencies should consider outsourcing, when it is appropriate, and review some popular platforms where agencies can connect with talent worldwide to enhance their capabilities and value proposition—all without needing to hire any new full-time employees.

Full Recap

Strategic outsourcing is one way to maximize profitability through operations.  In this first of a two-part series on outsourcing, Steve and Ryan discuss individual and project outsourcing.

One reason agencies should consider outsourcing as a strategic option is changing agency demographics. With the frequent turnover of agency staff and more employees retiring, agencies are having an increasingly difficult time finding the staff to fill vacant positions. Outsourcing can provide a good option to help take on some of the extra workload. In addition, by successfully identifying those tasks that they can move away from internal operations, agencies can free up agency owners and producers to focus on more high value tasks. (1:30)

There are two areas where agencies have the most significant opportunity to consider outsourcing of tasks:

1) Executive and Virtual Assistants:

There was a time when most executives had an in-office executive assistant (EA) who acted as a gatekeeper of sorts, handling the scheduling of appointments, travel arrangements, the executive’s calendar, and answering the phone calls. This person would handle many of the tasks the executive needed done but should not really do themselves.

Today, hiring a virtual assistant is a good option for handling similar, lower-value tasks. A VA might be someone an agency hires for as few as five hours a week, or it could be full-time, but they are not necessarily physically located at the agency. Steve notes that while the practice of hiring VAs is relatively common among executives, in general, it is underutilized by agencies.

Typically, a VA is a good option to support agency owners and producers who may be less skilled at more detailed, back office. A VA may be able to do that same work faster and better than the agency owner or producer and, by reallocating this type of work, it allows the agency owner or producer to focus on the higher value work that they are more uniquely skilled to handle. Outsourcing this type of work also helps the agency owner or producer to spend more time doing the things they enjoy outside of work.

Steve explains that his test for whether to outsource work is to ask himself this question:

“Is the work I am doing $20 per hour work or $1000 per hour work?”

“If the answer is $20 per hour work, it should be outsourced.” 

Steve adds that part of the success to be had from outsourcing depends on a person’s willingness to “let go” of (and trust someone else to handle) those lower value tasks.  You must be willing allow someone to help you.  (3:05)

2) Project Outsourcing:

Typically, agencies will have specific and well-defined projects, of short duration, that they can look to outsource (e.g., creating a YouTube video).  By outsourcing projects, agencies can enhance their capabilities and their value proposition in ways they never imagined possible—all without needing to hire someone full-time. There are experts across the globe who are skilled in nearly every project type an agency needs help with, and who will (most often) do the work more quickly and at a price lower than someone local would.

For the best results, agencies must clearly define the project and be sure they know, and can communicate, the specific goals of any project they choose to outsource.  (8:10)

Example of an outsourced project:

An agency had developed a worker’s compensation program and had a very specific 12-step program designed to help their clients better develop their workers compensation program. The agency wanted images created for each of the twelve steps, so they went to an online platform where they submitted the specific requirements of the job and posted a request for proposal. Those freelancers on the platform with relevant skill sets were notified about the project and bid on it. The agency then reviewed the bids, reviewed a portfolio of the freelancer’s prior work, saw the freelancer’s number of total projects, their earnings on the platform, their star-rated reviews, and more, and used that information to vet candidates.

The agency chose their top candidate and received the completed project, per their specifications, for a rate of just under $300.  (9:45)

Platforms like the one used by this agency connect those people with a wide variety of services and skills they want to sell –legal work, business plans, infographics, videos, software development, etc.— with those people who need projects completed.  In fact, according to Ryan, there is probably not a single problem an agency has that they could not find someone on one of these platforms to do.  (12:05)

Tips For Maximizing The Benefits Of Outsourcing Platforms:

• Tightly define your project from the beginning. By using as much narrowing criteria as possible to filter eligible candidates up front (by location, languages spoken, experience, star rating, etc.) you spend less time vetting responses later.
• Don’t be afraid to go overseas. By opening your project to a global network, an agency, no matter how small, can tap into the skills and abilities of people all over the world.
• Use common sense when it comes to using overseas providers.  While it may make sense to use an overseas provider for many projects, other higher security projects (e.g., analyzing agency management data) may be better left to business associates agencies already know and have worked with before.

(15:05)

A Few Popular Outsourcing Platforms & Resources:

99designs.com  –  Great place for graphic design work, including logo design, PowerPoint templates, web design, and others.  Allows you to submit project specs and community will return design ideas.  You narrow top choices to finalist in quick, contest-like process.  You retain legal rights to work.  Offers escrow funding options.   (20:00)

Fiverr – On-demand freelance service offering graphics and design, video, digital marketing and more.  Quick, simple process, projects starting at $5.  Can do add-ons to get projects completed more quickly. (23:50)

Upwork – A byproduct of Elance and oDesk merging together. Large, global online workplace for businesses and professional freelancers. Community offers skills and services for a wide variety of short and longer-term projects, ranging from blogging to web design to more complex development work. Helps with taxes, offers escrow funding of projects, has robust communication platforms.  Takes time to understand and learn how to leverage effectively.  (24:40)

Amazon Mechanical Turk (MTurk) – Amazon operates a marketplace for work that requires human intelligence. Developers can leverage the service to build human intelligence directly into their applications. This is not necessarily a recommendation from Ryan and Steve but they suggest having awareness of the platform as it will become critically important in the future. (27:35)

In this episode of “The Digital Broker,” Ryan and Steve explain APIs (and why agents and brokers should care about them). They discuss some of the simple ways in which APIs can be used to improve the customer experience, automate and refine agency processes, and save agencies valuable time and money.

Full Recap

“API” stands for “Application Programming Interface”. APIs allow software to easily send and receive information and data to and from one another. This has created a large amount of practical applications for agencies and brokerages while requiring minimal programming knowledge or efforts.

It’s important that people in the industry be aware of all the options that are now possible as a result of APIs—especially what they can do to quickly and easily solve problems and make a positive impact. (1:02)

Most APIs are available for free because the goal of so many technology companies is for developers to build on their systems and to provide value to others around them. This creates room for a lot experimentation. (6:25)

Ryan provides the example of a no-code solution he created for his agency (within about ten minutes) to run a sales contest. It was built using a tool called Zapier, which allows you to connect different software together and push data/information back and forth. Zapier does this by connecting the software’s APIs for you and it’s all done by a simple drag and drop tool. You never have to touch a line of code. For Ryan’s contest, each time a producer made a cold call that resulted in an appointment, the producer would enter that information into Formsite (a tool his agency uses for creating contact forms). Then Zapier would take the data entered into Formsite and automatically push it into his agency’s database. The agency would then render that in a real-time dashboard so everyone could see the contest’s standings.

This made it easy for everyone on the team to see who was making the most calls and setting the most appointments. With the producers divided into two teams, the winning team was then rewarded.  (10:00)

Ryan emphasizes that there are so many tools and resources available that are easy to use, but it requires taking the time to develop awareness of those resources and to find out what pieces fit together and how.  (11:20)

So If APIs Are So Simple, Why Aren’t We Using Them?

If APIs are so simple and beneficial, then why aren’t more agencies using them?

Most new agencies do have an API strategy or are leveraging APIs to build out their agency’s technical infrastructure in some way, however, older organizations tend to have a harder time figuring out how to integrate APIs into their existing operation. They may not understand how to deal with things like security, or how to move data back and forth.  (11:50)

One way in which Steve uses an API is when he adds a new contact to his CRM. He sends the contact’s email address to a service that has an API and in turn does research (based on the email address) of all the social platforms where that email address has an account.  When the data comes back, Steve adds it to his database, and he then has an email campaign automatically fired off, asking those people to connect on social media (e.g., LinkedIn and Facebook). For Steve, this offers an automated way to either begin or add another piece of important engagement with the contact.   (14:30)

APIs: The Great Normalizer

Often people in the insurance industry see all the innovative things others are doing, but they become overwhelmed and frustrated by their own perceived inability to do the same. They ask: why can’t we do that?

Ryan believes that they can. There is so much capability out there today, with good research and resource allocation, smaller agencies can be just as innovative, frictionless, and “fancy” as the larger brokers and carriers. APIs make that all possible. (16:05)

APIs allow opportunities to save producers time and to make the consumer experience more effective. For example, Ryan’s agency uploads client addresses to Geocodio, which then feeds the producer back the geo-coordinates. When a producer goes on the road, they can then see on their dashboard that they have several clients in a given area (and then visit those clients). (17:10)

Vision APIs are another way this type of capability can be used to improve consumer experience and drive engagement.  One example is using a vision API to take a picture of a vehicle then to identify its make, model, and color, and the insurance premium uptick for that vehicle.

The four primary vision APIs (Azure, AWS, Clarifai, and Sighthound) are free, and with just a little bit of code, an agency can begin using these to create a more compelling experience for their customers.  (18:00)

Impact of APIs on Hiring Process

For agency’s looking to effectively leverage the capabilities of APIs, they may need to reevaluate who they hire. They need to seek creative problem solvers who have awareness of technological capabilities, and who use that to solve the challenges an agency faces. These people might not know all the nuances of the technology, and they may not yet know exactly how to solve a problem but they know that the problem can be solved—and they seek to learn how.  (17:30)

The Elephant in the Room: Agency Management Systems

While several agency management systems have some form of API, some of these are not terribly useful. Just because a system has an API, it may still not be a helpful solution for a given agency.

After agencies establish that a particular agency management system has an API, they should then determine whether that system’s capabilities are actually useful to them. They need to understand what data the API allows them to access in their management system.  (21:20)

Because many of the major players (e.g., Vertafore’s Sagitta) offer relatively limited capabilities in this regard, Steve and Ryan encourage agencies to resist waiting for the management system vendor, the carrier, or other third parties to come up with the solution. Rather, agencies should think through their problems and the potential solutions, determine how they can access the data they need, then figure out what they can do with the data within their own systems. Further, agencies should arm themselves with a multitude of solutions (including but not limited to APIs) rather than simply increasing headcount.  (23:00)

The common Agency Management Systems (AMS) do have some APIs but they’re mostly limited or cost significant money to access. These include

• Applied Systems
  Applied Systems allows agencies access to their API (not vendors) but there’s a fee involved and it’s fairly limited.
• Vertafore (AMS360, Sagitta, BenefitPoint, and QQCatalyst)
  All of Vertafore’s different solutions have some API capabilities available, however, they’re mostly limited and require a hefty fee.

A new AMS on the market, TechCanary, understands the value of having access to powerful APIs and being able to seamlessly connect different tools together. They’ve built their software on top of Salesforce which opens the AMS up to all of the APIs and apps that have been built in the Salesforce ecosystem. As a result, you do not have to wait for TechCanary to build a new tool such as a texting feature to improve your agency’s client communication. Instead, you can add any of the dozens of texting apps already built on the Salesforce app store with virtually no code.  (24:25)

Summary

Agencies still use many processes that unnecessarily cost them time and money. With minimal exploration and resource allocation, agencies can remove and remedy that. There are problems agencies face every day that, by taking some time to look around at the different possible integrations, they may find they can solve by hooking a few systems together. And often they can do this with no code, by simply dragging and dropping pieces together.

APIs are technical, but they are a solution. Insurance industry professionals who understand what problems they need to solve, what solutions and options are available, and who take advantage of APIs in ways most people would not have thought of, are the ones most likely to thrive and succeed.   (28:30)