Many benefits administration companies start by solving a specific problem, like benefits enrollment, COBRA administration, or even talent management. As they grow, other customer needs arise. To grow revenue and market share, they decide whether to build solutions to meet customer needs or integrate with other solutions that solve the problem.
The build vs. buy decision is a topic for another day (though we did discuss build vs. buy in the context of health payers), but if the decision is made to partner, here are five traits of great technology partners for a benefits administrator to consider:
If you’re going to partner with another business to provide a solution you don’t currently offer, you want to make sure their technology is best-in-class and future-proof. Here are some things to consider when reviewing potential technology partners:
- Scalability – You’ll want to first verify that the technology platform used by the partner can scale to meet your business needs. Be sure to ask the potential partner how they leverage servers or technology to scale their solution. Then, see if you can perform a scalability test to ensure it can handle your load.
- Reliability – System outages, poor security, or bugs can significantly impact your brand and reputation. Just ask Equifax. Just over half the US population was impacted by a data breach caused by a bug in the Equifax server code. The bug caused incalculable brand damage and a 28% drop in their share price. The takeaway: make sure your potential partner has a reliable product. You can do that after the fact by creating service level agreements (SLAs) – like an uptime guarantee – with money at-risk should the partner fail to meet up-time goals. But how do you judge reliability before buying? Often, asking about the development process can help you understand how potential flaws are discovered and how soon they’re fixed. Also, ask about previous uptime metrics, bug metrics, and other metrics that will help uncover past performance and uncover if you’re dealing with a data-driven company.
- Previous Success – Previous success can predict future outcomes. It’s why investors bet on businesses with previously successful founders. It’s also why baseball teams generally pay more for players with successful histories. So ask what other businesses they partner with, their client and partner retention rates, and revenue growth and revenue projections to determine how successful the business is. Or, ask about previous businesses they’ve owned or been employed by and their role in making those businesses successful.
- Integration Protocols – To create a successful partnership, you’ll need to be able to exchange data with your partner technology. So be sure to ask how your software system will interact with the partner system. It’s worth knowing whether it’s standards-based, proprietary, file-based, or transactional through web services or APIs.
- White-labeling – If you’re integrating customer-facing technology into your benefits administration platform, you’ll need the ability to white-label the solution. That includes all customer-facing aspects – not just the technology but also any type of other member communication. For example, our premium billing and payment solution for employers sends print communications – like invoices and delinquency notifications – that are completely configurable and branded. If you’re partnering and want the primacy of your brand, white-labeling is a requirement.
When you partner with a provider, think of it as an investment. Not only is it an investment in the provider, but it’s also an investment in your business.
What should you look for when investing? Most angel groups or venture capitalists will tell you the look for a few things when deciding to invest. In addition to the solution solving a big problem that offers an opportunity for a very profitable exit, they look at management teams and traction first.
So should you when looking for partners. Strong management teams are more likely to create better products, more efficient processes, and better business alignment. The result is a better business and a better partner.
I came from a large industry where many of the businesses in it were similar and needed similar software. It attracted many software companies that saw a large market opportunity. They tried to develop a generalized software solution for every business in the market. Unfortunately, those software companies couldn’t gain traction because they focused on a revenue opportunity and assumed the homogeneity of every business. The businesses differed, and the software solution that attacked the niches within that industry achieved higher revenue growth.
They were successful because they understood the intricacies of specific businesses better than their generalized counterparts. As a result, they built features that those niche customers demanded.
Technology partners for a benefits administrator should be experts in their domain. Again, examining the management team’s background will likely play a key role in determining the domain expertise of the business brings.
Great companies are always innovating. Look at Google. First, they created the best internet search engine. Then, they changed the advertising world with Adwords. Then, Google created a phone operating system used by more than 85% of the market. They consistently innovate to improve their revenue generation.
Technology partners for a benefits administrator should be innovative. So ask to see their product roadmap. Ask what they think of emerging technology like artificial intelligence and machine learning. Ask what percentage of their revenue they allocate to research and development. If they’re consistently pushing the boundaries of what they can do, that’s a company you want to partner with.
Customer Service Acumen
The aforementioned Google is innovative. But they aren’t great at customer service. If you’ve ever tried to contact an actual person at Google to fix an issue with an app or their hardware, you know what I mean.
When you partner with someone – even if it’s a software-based solution – you need people to help implement, should things go wrong, or you have a seemingly simple question. Some ways to judge the customer service of a potential partner:
- Ask for an implementation plan – If that plan seems well-conceived and includes frequent in-person meetings, that’s a good sign. If it looks like the partner recently created the plan as a result of your request, that’s not a good sign.
- Ask about the team that will service the partnership – If the potential partner has multiple layers of contacts – say a day-to-day operations contact, a development contact, an account manager, and an executive sponsor – it’s likely they believe strongly in hands-on customer service.
- Ask for references and case studies – It’s always best to hear from past customers, users and partners. If they can vouch for the potential partner’s customer service chops, they likely emphasize delivering high-touch service to partners as well.
Certifi partners with benefits administrators to deliver automated premium billing and payment software that streamlines benefits billing and payment solutions for employers.