Over the past 4 years, 3 of the 4 major Risk Management Information System (RMIS) vendors have been acquired by private equity investors. That amount of consolidation, in what was previously a very stable market, really is astounding. What does vendor consolidation mean for RMIS users? And more importantly, what does it mean for you and your team?
The impact of RMIS market consolidation is almost certain to rank low on any risk manager’s list of concerns. There are more critical issues on which to focus—renewals in a commercial property insurance market that continues to harden, adequately evaluating and insuring against cyber risk, taking a more proactive approach to loss prevention, or developing an ERM program, to name just a few.
Those who depend on their RMIS for basics such as consolidating a handful of TPA feeds and reporting on claims data, RMIS mergers and acquisitions may barely register. For risk managers and their team members who use their RMIS on a day-in and day-out basis, the potential effects of consolidation—in particular, the ability or willingness of a RMIS vendor’s owners to invest in improvements in technology and support, rather than preparing for future sale—are worth considering.
This is especially true for risk managers who will soon be faced with a decision about renewal with their current provider. If you’ve endured constant service team turnover, waited weeks or months for work to be done by your service team, or haven’t seen any significant improvements made to the RMIS features you use to manage critical aspects of your risk management program, the questions become:
- Is there any sign that things will change for the better?
- Is sticking with your RMIS provider worth the headaches?
- Is renewing for additional years worth the risk?
Your RMIS options: What can you do now to give yourself room to maneuver?
As you consider these questions, “wait and see” is unlikely to be the best approach. In waiting, you cede power. In effect, this puts their agenda ahead of yours. By taking action, you give yourself options. Whether you elect to stay with your current system or make a move, you avoid a scenario in which you have no choice but to renew because you’ve run out of time.
1. Make sure you leave enough runway
RMIS implementations are not push-button operations. For many risk managers, this reality may be the reason why they’ve stuck with their current RMIS for as long as they have. But how much time do you need to give yourself in order to be prepared to migrate to a new RMIS?
Timing is thingevery—How rushing leads to embarrassing errors provides this general rule of thumb: If your current contract renewal date is 12 to 14 months away, you should begin actively evaluating systems as soon as possible.
2. Talk to your peers about their RMIS migration experience
When looking into the possibility of a RMIS change, there are factors to consider that will help you avoid hidden costs and lost time. A major factor is a vendor’s experience in converting other clients over from your current vendor’s platform. Don’t just take their word for it, a RMIS vendor should be willing and able to put you in touch with contacts at organizations who’ve made the switch from the platform you’re on, who can speak to their experience, and who can provide helpful tips and “lessons learned.”
3. Be prepared to counter the “data fee” trap
Unfortunately, when switching RMIS platforms, some providers limit access to data or charge fees to extract and transmit your data from their system to your new vendor. Whether or not these are warranted or reflective of the amount of work involved is a valid question. Beyond the financial aspect, delays with the provision of your data can directly affect the timetable for getting up and running on your new RMIS.
Getting clarity as to what your current provider may charge and what the delivery timeframe will be are factors you’ll want to consider as part of making a decision about moving to a new system. Knowing what steps are entailed in obtaining your data and, if necessary, getting your organization’s legal team involved early in the discussions, will help get the ball rolling should you decide to make a change.
Start the discussion now
When it comes to RMIS market consolidation, what really matters is how recent changes in ownership, as well as those likely on the horizon given private equity ownership, could in years to come affect you and your team’s ability to manage your organization’s risk—if they are not already affecting your day-to-day. At the moment, your exit strategy may not be clear. The move to a new RMIS takes planning and careful consideration. Rather than taking a “wait and see” approach, you can give yourself options by moving from reactive to proactive. Origami Risk, the RMIS provider that has built an implementation process around client success, is ready to work with you to expand your options.