Software-as-a-service (SaaS) offerings are making inroads throughout the enterprise. The research firm IDC, in a study published last year, predicted that in the next three years SaaS revenues will show annual growth rates of approximately 26%, six times faster than all software.
One area seen as particularly apt for the evergreen nature of SaaS is the constantly evolving world of statutory reporting. To learn more about the benefits of SaaS, and what it means for statutory reporting stakeholders, Insurance Networking News asked Layton Olson, SVP of Eagle Technology Management, for his perspective.
INN: What are the advantages of a SaaS delivery model?
LO: Let's start with lower total cost of ownership, which can be significant. With SaaS you avoid the overhead associated with buying, implementing, maintaining and upgrading the traditional server or desktop hardware and software. Next is accessibility. You don't have to be confined to your desktop to access data or information. All you need is access to the Internet from anywhere, anytime. Application upgrades are automatic and timely because the vendor manages the upgrade process. What seems to be particularly attractive for our customers is that SaaS technology frees up their IT department because so much of what they do for the desktop in now handled by the vendor.
INN: Are insurers becoming increasingly receptive to SaaS?
LO: I hope so. Statutory reporting, as a standalone business application, seems to be one of those "peripheral" applications that lends itself to the hosted discussion. As we know, insurance companies take a pragmatic approach to their adoption of technology, measuring twice and cutting once. Five years ago, the smaller carriers were the primary "on boarders" to hosted service delivery. Now all sectors of the industry are involved. It represents about 50% of our revenue, so there seems to be genuine receptivity.
INN: Does the fluid nature of statutory reporting lend itself to hosted solutions?
LO: Absolutely. The hassle of doing maintenance and applying updates goes away in a hosted model. The statutory reporting filing window is extremely short and every year hundreds of changes need to be addressed. These changes need to be applied in a timely fashion to get the reporting done on time. Many carriers have formal change management controls that often inhibit the timely and efficient application of these changes. Updating speed is oftentimes throttled by these controls, or the fact that IT is working on other projects and can't respond as quickly as needed. That is where the hosted model can provide users with needed relief. They are unencumbered by internal change management time restrictions and IT doesn't need to be involved to get the work done, both of which make a hosted solution a very efficient way to go.
INN: What can insurers who adopt SaaS solutions expect in terms of user experience and ROI?
LO: If the application has a true Internet DNA, users should expect to interact with the solution in exactly the same way as if it were installed locally, with just a couple of possible exceptions. The size of a company's Internet connection can influence how quickly a screen "pops" for a user, and also regulates the pace that data can be transferred (i.e., downloaded). Our customers have found these to be non-factors when compared to the value they derive from the hosted option.
In terms of ROI, the question to answer is: What value does speed of deployment and updates on the application have during that critical "six weeks" at year-end? If your child is sick, or a "Nor'easter" comes through in late January, is there value in being able to work from home? As long as you have an Internet connection you can work from anywhere. And if you have multiple processing locations, with subject matter expertise "living" somewhere else, would giving all your users the opportunity to connect to a real-time, collaborative reporting platform, anytime, anywhere be valuable? Toss in the fact that there is no hardware or software to buy or manage and the "cloud" all of a sudden is quite alluring.
