Why a Purpose-Built Solution Beats Over-Customization

The employee benefits (EB) market is complex. Unlike the individual insurance and property and casualty (P&C) markets, which have one-to-one relationships with insurance plans, the EB market has a multi-tiered relationship to its coverages, which makes the business model more complicated.  

Due to the complexity of the EB market, the software an insurance company uses needs to be purpose-built. It must fit your business’ needs — including your data and API requirements — without clunky customizations that ultimately slow you down.  

Think of it this way: If you’re 6-foot-4 and looking for a suit that fits, your best bet is to go to a niche store for tall people. You can tweak the suit to make it your own, but save time and hassle knowing it’s already purpose-built for your body type.  

Make your solution unique where it counts 

Similarly, you don’t need extensive customizations to software built for the EB market. You can make it unique where it counts — small changes like a service feature on your digital channel or a voice interface — but the distinction is that these alterations differentiate your business by conforming to the product best practices without dragging you down with customizations that require updates and upgrades as the software evolves.  

When leveraging a purpose-built system, even the minimal customization required will be externalized to maintain the integrity and upgradability of the product because the products, business models, and distribution channels are inherently understood by the core system.  Purpose-built product vendors are far more likely to include requested industry features in their roadmap since their singular focus is one industry, allowing them to go deeper and deliver a better fit.  When you’re not weighed down by layers of ad-hoc custom solutions, your business becomes truly product-first, allowing you to offer new products and stand out in the marketplace.  

What can a purpose-built solution do for your operation? 

Absence management is a great example of an increasingly important product that can easily be added to your EB offerings with a purpose-built solution. The federal Family and Medical Leave Act, state Paid and Family Medical Leave and other laws have created a web of new rules that differ depending on an employee’s location. A purpose-built solution for integrated disability and absence management (IDAM) allows a human resources department to easily work through such issues without a raft of paperwork. If your company doesn’t have the ability to pivot into this space easily because you’re using clunky software, you’ll lose out on this increasingly critical market.  

The advantages of a purpose-built solution: 

  • Reduces the cost of ownership. Purpose-built systems dramatically reduce the cost of ownership since there’s less customization to be maintained. For example, when you take a car you’ve customized into the shop, the technician will have to figure out how everything works first before the repair work begins. Even when they do, the cost to repair is likely to be elevated due to workarounds based on the customizations. Similarly, if you’re adding customization to your insurance system, every time you upgrade you have to consider unique customizations over again. A purpose-built solution already fits your business needs, and any tweaks you want to make — like adding IDAM— become easy add-ons. 
  • Increases your business agility. A purpose-built solution reduces complexity, so you can quickly add key features and products to meet the changing needs of your customers. This can put you ahead of competitors and give you market differentiation. 
  • Gives you more value for money spent. A substantial return on investment will come from your initial spend with a purpose-built system because you’re able to take on new capabilities quickly from your core platform supplier. Good platform suppliers spend millions on R&D, but that’s of diminishing value to you if you require extra effort to make your customizations compatible with updates. The more customization you have, the more updating and testing you’re likely to need, and the less often you’ll take platform updates, which means you aren’t conforming to the product best practices or reaping the full benefits of a SaaS platform offering. 

Don’t force it 

Forcing EB products into a P&C platform, or vice versa, just doesn’t work. Similarly, multiple customizations can be a challenge when striving for a flexible, configurable system. Searching for workarounds, overlooking the complexity of rating factors, and resting on the faulty notion that “it’s all insurance in the end” will put you in a less than advantageous market position.  

That’s why it’s important to embrace a SaaS solution specifically for the EB market from the start. You need software that provides the crucial capabilities to be a product-first market leader and differentiator. You need to be purpose-built. 

Watch this video to learn more. 

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