By Patrick O’Neill, Founder and President, Redhand Advisors
It’s a common misconception that large organizations are better positioned to implement a risk management information system (RMIS) over smaller organizations.
Yet, in 2023, there’s no reason a RMIS couldn’t be used by organizations large and small, as discussed in a recent webinar hosted by Redhand Advisors. The webinar, featuring Dave Tweedy, Redhand Advisors; Georgette Loizou, CEO at PCIS; and Michaele Clark, client relationship director for Apex Claims Management, debunked many previous misconceptions with implementing a RMIS in middle market and small organizations.
Adopting a RMIS is easier than ever
According to our 2022 RMIS Report, only 15% of current RMIS users are SMBs, i.e. 500 million in revenue or less.
There are many reasons for this, including the high initial cost of a RMIS, driven by the need for multiple data sources feeding it; the inability to devote resources to implementation, including human capital; and the comfort level with legacy data management processes.
While these have traditionally served as roadblocks to the purchase of a RMIS for SMBs,
technological innovation has given way to reduced systems costs and simultaneously the collective expectation for businesses of all sizes to champion data analytics and risk management — digitally. This universal demand has reduced the barrier to entry of RMIS implementation for many in the following ways:
- Cloud computing. Software now lives in the cloud, putting the onus on the vendor to maintain and support the system. As a result, smaller organizations no longer need to enlist technical resources to manage and maintain the system and data.
- Reduced maintenance and implementation costs. Another benefit of cloud computing is the significantly lower cost than more traditional on-premise models. Today, software vendors have fewer environments and code bases to support, which in turn lowers the overall costs of these solutions.
- Improved software platforms and coding bases. Software services are improving overall, and code can often be developed more quickly than in the past, which helps drive down costs and improve RMIS functionality for all users on the system.
- Reduced implementation time. Some vendors have pre-configured their RMIS to help new clients implement more quickly and get their legacy data incorporated without requiring full customization.
Overcoming the “fear factor” with RMIS benefits
Loizou noted that small and mid-size organizations may be held back based on a “fear factor” that implementing a new RMIS will overwhelm a department-of-one risk manager, often typical to SMBs. Although the benefits outweigh the risks, many small-business risk managers would rather “Band-Aid solutions together, … grind it out and make it work,” she said. Yet, the benefits of SMBs engaging a RMIS are great:
- A RMIS is versatile — it can help with a variety of tasks from claims management to insurance verification. Organizations can implement more capabilities of their RMIS as they become proficient with the system.
- New uses are being continually developed. RMIS systems are developing new features and capabilities to help organizations manage risk.
- The speed, accuracy and cost of policy renewals improves when RMIS is utilized to manage insurance renewal process and policy/program management.
- Numerous benchmarking, legal, environmental, health and safety and other enterprise management tasks can be supported within the RMIS.
- The digital information flow that a RMIS creates across an organization is a benefit for organizations of all size, it can break down the silos that may exist and get the teams to the goal of managing risk better and more efficiently.
Getting more from your new RMIS
For SMBs implementing a RMIS, getting the best value out of the investment in cost and time is imperative to demonstrating ROI. Here are a few tried and true ways to squeeze out added value from your RMIS:
- Take time to improve your processes rather than simply replicating legacy practices in your RMIS. There’s little sense in automating inefficiency — use the RMIS to eliminate it instead.
- Resist the urge to use your RMIS as a Band-Aid solution. Once you invest, have as much of the technology in place to augment your risk-management team’s efforts rather than create more work.
- Modern RMIS can bring all your data together, but you need to leverage it to the greatest extent, using dashboards, proper analysis tools and correct distribution to the stakeholders and decision-makers who need that information. The RMIS can be a well-oiled machine if understood, implemented and utilized properly.
For further guidance on how a RMIS can help your SMB, regardless of size, schedule an inquiry call with Redhand Advisors.