Contract Management Software ROI — Insurance Broker Case Study
Posted by Melanie Aizer on Wed, Jun 01, 2011 @ 03:48 PM
Businesses exist to grow profits. Regardless of how well a new technology improves a business process, the decision to implement it must be justified by a significant positive impact to the bottom line.
Contract Management Software dramatically improves the contract workflow process — creating, publishing, routing to signatories, data-correcting, filing and retrieving paperwork.
A complete contract management software system eliminates waste by automating the entire workflow. The significant technical break-through is that it enables users to control not just contract images, but also the data elements within the contracts. The ability to manage at the data level opens up new automation possibilities.
For the purposes of ROI analysis, the following case study highlights an insurance broker but the example can be applied to any type of company.
- Company type: insurance broker
- Agreement project: individual insurance; new applications
- Volume: 300 applications per month; 3,600 per year.
PROCESS IMPROVEMENT CALCULATIONS
In this section, we will cover data-entry and distribution costs.
1-Data-entry cost
Assuming that each insurance application takes a data-entry administrator twenty minutes and labor expense is twenty dollars per hour, the total annual cost of this activity is $24,000 per year.
Contract management software has three levels of data-entry options, each with greater levels of automation:
1. Using the technology natively, employees can rapidly fill-in a pre-built contract template.
2. Via integration with internal software systems such as Customer Relationship Management (CRM) or Sales Force Automation (SFA), contracts can be populated by a single click.
3. The technology can also be integrated with websites so that data-entry can be off-loaded to external signatories (customers, partners, and so on) effectively eliminating data-entry cost.
2-Distribution cost
The two costs associated with distributing paper contracts are labor and shipping. Assuming 75% of these insurance contracts are shipped via standard mail, 10% by courier and the remaining by fax and e-mail, the total cost of distribution is $18,165 annually.
Contract management software distributes contracts via e-mail, completely eliminating courier and standard mail costs.
Additionally, the technology can be integrated with websites and other internal software systems to automate the distribution of contracts without using any labor.
In our insurance example, customers fill-in applications on-line and click “send” when they are completed. The contract is then automatically launched into the signature routing workflow.
We will outline data error-checking cost, filing and retrieval cost and abandoned documents cost in our next section....or you can download our complimentary white paper today & discover:
- A cost-savings analysis of transitioning to digital contract management technology
- How to save 40% of labor costs to enter, verify, correct and re-key contract data
- How to eliminate all mail and courier costs
- How to minimize storage and retrieval costs to only 10%
