Preparation key if you
wanna be startin’
something
Graham Card, Willis
T
hose of you old enough to remember wearing bell-bottomed trousers, hot-
pants (consider the image you are creating before making that admission please) and platform shoes, will
also remember the Jackson 5 back in 1970. That’s when Michael Jackson sang “….. abc, easy as 123, or
simple as do re me …….”. Of course he was referring to the romantic challenges facing a starry eyed
couple, and not hardened London Brokers and Carriers considering the task ahead when implementing
the e- Accounting process. Yet many would be forgiven for thinking that the same sentiment might be
applied? Surely using data rather than paper is just a straight swap? “Plug and play” so to speak?’ Well
no it isn’t actually in fact it’s anything but!
Let’s be clear, it’s not the “e” part of the equation that’s difficult to deliver. The technology - Gateways and
MMTs (Message Management Tools) – are easily acquired and in most instances a Carrier or Broker will
already have these available, perhaps as a by-product of established e-endorsement capability. No, the
technology isn’t complex (or expensive) and tasks such as ACORD certification, connectivity, confidence
testing and UAT are relatively easily (and successfully) complished.
Bizarrely it’s the “accounting” part of the equation that causes the challenge. The part that we’ve
performed for years, many years, in the same dependable, deeply embedded and often frustrating way.
What is particularly odd is that, so often, very few of those involved in managing the function really
understand how complex and inefficient that process has become! Between us we have created careers
for employees whose job it is to worry about and try to resolve unmatched cash or reconciliation
problems. There is a cottage industry within Broking organisations producing “Copy Closings” and a
query process that seeks to engage frontline Brokers and Underwriters in resolving processing
differences long after the risk has been placed and written.
Willis’s experience in implementing e- Accounting is that often we find there is (and has always been) a
complete mismatch between the Broker accounting process and the Carrier accounting process. The
Ledgers, systems, and almost certainly accounts used by both companies frequently have little alignment.
It is not unusual to find that a Broker account for a given Carrier may relate to any number of systems and
accounts held by that Carrier. This misalignment, typically, is overcome in the paper process by
considerable manual intervention (creating multiple copies of statements for multiple departments, or
relying on detailed understanding and coordination by key individuals). Intervention is performed in either
(and often both) organisations and is usually seen as a value-add activity (!?). The fact that very low
reconciliation rates and/or unmatched cash results seems to be accepted as the price to pay for some
degree of fluency. As well-intentioned and necessary as this work is (particularly given there is little hope
of an acceptable outcome without it!), I prefer to call it inefficiency or re-work. Quite simply, it should not
be needed.
So why are “dependable and deeply embedded” accounting processes such a challenge to an eAccounting implementation? Similar to the once ubiquitous bell-bottomed trousers and platform shoes (I
have little experience in the wearing of hot-pants), we find that old processes are usually not practical and
rarely suitable for tasks that require speed or efficiency! e-Accounting requires speedy technical and
financial agreement and a coordinated (perhaps centralised) message management function within the
Carrier operation. Legacy processes rarely align to this challenge. What is needed is a detailed review of
the legacy process which guarantees that both parties understand scope and account alignment.
If I can be forgiven for using another analogy, the situation is similar to moving house and then redecorating only to find that the previous incumbent has literally papered over the cracks; so it is that,
when analysed, the existing accounting process can be found to be fundamentally flawed. If we leave to
one side the inevitable inefficiencies of a paper based process, often we find that the situation has been
exacerbated by the misalignment between both companies.
The Willis approach to this challenge is to ensure that very early in our e-Accounting project plan, during
a stage we call “pre-implementation”, the “as is” process within both organisations is jointly reviewed and
mapped in detail. This is a critical phase of our implementation work with a Carrier during which we
ensure not only that both parties fully understand the idiosyncrasies in current process but also that,
between us, we can first design, and then both sign-off on, a “to-be” process that fully delivers the
anticipated business benefits. Business engagement in this task, particularly senior endorsement and
sign-off to the resultant changes, is key.
To support this activity, Willis deploy a skilled and experienced team made up of Project management,
Business Analysts and subject matter experts who work with our partner Carriers to ensure that once eAccounting is implemented and embedded, on-going business-as-usual activity will be aligned and
efficient.
Let’s be clear, e-Accounting offers both Carriers and Brokers a great opportunity to realise benefits:
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Advances in technology have meant that the solution is affordable and easily deployed.
Improved cash flow and the elimination of unmatched cash are significant prizes that can be
quickly achieved.
Data quality and process integrity support regulatory requirements for inter-company
reconciliation and prompt settlement of Receivables.
The ACORD message based process sets a foundation for future data integration and automated
processing.
Also, despite the challenges described earlier, implementation can be achieved in a
relatively short timescale. In stark comparison to most IT enabled projects, e- Accounting can be
delivered quickly (circa 6 months) which ensures that despite possible pain during the pre-implementation
phase, the much needed gain is quickly realised.
But be prepared to reassess what you do, how you do it and possibly who does it. Don’t blame eAccounting if you find organizational change is needed – the current processes are broken and ever has
it been so! Put simply, the transparency and need for alignment inherent in the e- Accounting process
reveals, glaringly, how inefficient and ineffective our current accounting processes are.
I can’t think of a better case, or time, for change.
Dates for your Diary
4 www.londonmarketgroup.co.uk
The LMG Forum sessions are designed to provide an update on the progress of the modernisation
programme and give more detailed information on particular projects or aspects of the process. All
sessions start at 9:15am at Willis Auditorium, Lime St.
Wednesday 31st October
Wednesday 28th November
Tuesday 18th December
Only those who pre-register will gain admittance. Online booking is available via
www.londonmarketgroup.co.uk Places are reserved on a first come first served basis.
ACORD Club dates:
ACORD Club provides an update on the latest technological innovations in the market. The venue for this
is Balls Brothers, Minster Court. All sessions start at 11am. Dates coming up are:
Thursday 29th November
For more details on upcoming speakers, visit the ACORD website (www.acord.org) or email Melanie
Harding ([email protected])
Events...