We’ve all been there before: you get a notice from a software platform that you love, saying it’s under new ownership. You might not think much of it at the time, but soon you start to see the effects. A workflow you use every day changes, or disappears altogether. You call the support team and can’t get a hold of a real person. You get a notice that the price is increasing. Eventually, most of the factors that persuaded you to choose that platform in the first place are no longer relevant.
It’s tempting to keep trudging along with a platform simply because it’s familiar. Moving to a new system is a big decision that will require research and staff training. But there are many hidden costs to weathering a technology platform acquisition, and in the end it may actually save money and effort for your agency to move to a different platform.
Here are some questions to ask to determine whether it’s worth it to stay with a platform after an acquisition, or move on to greener pastures.
- Is the product changing or being discontinued?
- Is the level of support changing?
- Is the price or pricing structure changing?
- Are the terms and conditions changing?
- Do you have trust and confidence in the new owner?
- What is the cost (hard and soft) to change platforms?
Is the product changing or being discontinued?
An acquisition usually means change. And not all changes are bad—maybe it’s simply a name change, or some differences in branding. But other times, it could mean the product you know and love is being significantly overhauled—or worse, discontinued altogether.
If the changes make for a better, easier-to-use system for your agency, it might be worth the cost of re-training your staff on new features or processes, and enduring the bumps while the transition smooths over. But if not, it can wreak havoc on your agency processes and result in hours of training and lost time to understand how things are changing and the impact it has on your existing workflows.
Questions to ask:
- Does the acquiring system have plans to discontinue the product in the future and force you to upgrade to a different one? If the company had prior acquisitions, their past behavior could be a clue as to whether they will add the product to their lineup or discontinue it in favor of their own product line.
- Are the changes to the system functional (features and processes) or just cosmetic (name, colors, etc)?
- Are the features your agency regularly uses impacted?
- Will you need to change your agency’s processes and workflows because of the changes? Are there workflows or reports you’ll have to tweak or re-enter?
- Do the changes add to the ease of use for your staff (features are more intuitive, tasks are faster to complete, etc), or detract from it?
- How extensive are the changes? What is the cost of retraining your staff? Consider number of staff, hours of training needed, implementation of new procedures and auditing for accuracy, etc.
- Is it the right time to undertake a platform change for your staff? Do they have the bandwidth to take this on in addition to their current workload?
Is the level of support for the product changing?
Another common pain point during technology acquisitions can be changes to the support offered for the product. The acquiring company’s support reps may not be as knowledgeable about the product, or support may even be outsourced to a third party. This can cause major frustration for agency staff and seriously impact their productivity.
Questions to ask:
- What is the hold time when you call in?
- How many calls or tickets does it take to get a resolution to your problem?
- Are the support staff friendly, knowledgeable, and helpful?
- What is the tenure for employees? Can you work with the same people each time you contact support, or are you reinventing the wheel each time?
- Is support available through several different means (phone, email, chat, etc)?
- Is there a thorough help system for the platform, with articles and videos that are clear and concise?
- Do you have access to a user group, forum, or community where you can interact and learn from other people who use the software? Is there a cost for that access?
Is the price or pricing structure of the product changing?
One of the most obvious changes that often follows an acquisition is a change in price. The acquiring company may not have the same commitment to grandfathered pricing that the previous one did, or may be looking to quickly recoup acquisition costs by raising the price of the product.
A small price increase may seem insignificant, but pay attention to whether it’s accompanied by a change in pricing structure. For example, maybe you paid a flat rate before but it’s now based on the number of users, which could increase your cost. Or perhaps the platform is moving to tiered or a la carte pricing, so features that were included before may now cost extra.
Make sure you understand exactly how the changes will affect the overall cost of the platform. A price change might be worth it if it results in more value for your agency (more features, etc.), but if the acquiring company is asking for more than an incremental price increase for the exact same features, be wary.
Questions to ask:
- How much is the price being raised? Is the increase significant?
- Is the pricing structure or billing frequency changing?
- How much notice are you being given before the price change goes into effect?
- Are additional price changes on the horizon? Does the acquiring company have a track record of implementing regular price increases for products they acquire?
- Are you being grandfathered in at your current price as an existing customer? Is this permanent, or will it only last for a certain amount of time?
- Is the cost for the platform now comparable to or greater than competitor products that you previously rejected based on price?
Are the terms and conditions changing?
When systems change ownership, customers are often asked to agree to an updated set of terms and conditions. Don’t check the box without reading what you’re agreeing to! There could be major changes to the services being provided, the length or conditions of your contract, and much more. Take the time to read through the new terms, and ask questions to get clarification before signing if anything is confusing or unclear.
Questions to ask:
- Does the company claim the right to share, sell, or otherwise use your agency data without your permission?
- Are the length or conditions of your contract changing?
- Are there any changes to the services offered?
- How much notice do they state you will be given if changes are made?
- Are there penalties for terminating your contract or leaving the system at any time?
Do you have trust and confidence in the new owner?
You had a certain amount of trust in the platform you chose—you likely talked to someone or several people at the company before making your decision. Do you have the same level of trust and confidence in the new owner? Do your research on the acquiring company and make sure they’re worthy of your business—not just now, but into the future.
One important thing to note is who owns or has a stake in the company, and what their motivations are. If the company has outside investors or has changed ownership recently or many times in the past, it’s possible the scope of the product may change in the future as well. Is the owner focused on turning a quick profit so they can sell again in a few years, subjecting you to another arduous acquisition process?
“It’s important for your agency to feel comfortable that you can place your trust in a vendor not only at the moment you sign the agreement, but well into the future,” says HawkSoft’s Chief Marketing Officer, Rushang Shah. “Vendors that are committed to remaining privately owned, like HawkSoft for example, wield the advantage of having fewer stakeholders to answer to besides the agent, so they can focus purely on what’s best for the agent rather than making a quick return on investment.”
Questions to ask:
- What is the history of the acquiring company? Have they been in the news recently?
- What has the acquiring company done with other platforms they’ve acquired in the past? Are those platforms still around and healthy?
- Has the company changed ownership in the past?
- What is the mission statement or core values for the company? Do they align with your values?
- How is the company funded? Is it publicly or privately owned?
- Who are the stakeholders or board of directors who make decisions about the direction of products? Are they motivated by what’s best for the customer?
What is the cost (hard and soft) to change platforms?
Once you’ve answered the previous questions about the acquiring company, you should have a clear picture of both the material and hidden costs associated with remaining a customer of the acquired platform. Now the only remaining question is, are these costs greater than what you’d pay by moving to a different platform?
An acquisition is a good time to consider your other options. If you’re going to end up paying more and re-training your staff, you might be able to put that time and money to better use with another product. Take a look at your options again; maybe your agency’s needs have changed or evolved since you first chose the platform, and now they’re better suited for another system. Consider both the hard costs, which are monetary, and soft costs, which are harder to put a price tag on (like ease of use and staff satisfaction). In the end, which platform will bring the most efficiency, ease, and sanity to your staff’s daily workload?
Changing platforms can feel daunting, especially if your client data has to be converted between systems. But the truth is, a good platform will make the transition quick and seamless for your agency. Don’t let the fear of the unknown stop you from making a beneficial change for your agency. Take a look at our blog on switching management systems for information about why and how to make a change in technology for your agency.
Questions to ask:
- What is the total cost of ownership for the new platform? Is it less than your current platform?
- What is the data conversion process like for the new platform? What does it cost? How long will it take? How much of your data can they preserve?
- How different is the new system from your former system? How much training will it require for your staff?
- Will you have to change your current workflows to fit the new system? Will these changes be more or less efficient for your agency?
In addition, don’t forget to ask the same questions we provided about support, terms and conditions, and trust in the owner for the new platform to ensure you’re picking a worthy partner.
Choosing the right technology
Having the right software tools is crucial to the efficiency and success of your agency. If a platform is no longer serving your agency’s needs, don’t keep limping along for the sake of maintaining the status quo. Today’s Insurtech landscape is rich and competitive, meaning companies must provide better and better service to stay relevant. If one of your agency systems has been acquired, take the time to evaluate whether the change will help or harm your agency.
Get help choosing the right platform for your agency
Read our white paper on 5 questions agencies wish they had asked before choosing an agency management system for tips on what to look for when choosing a technology platform for your agency.