The Operation Varsity Blues scandal has heightened reputation management concerns across the higher education community. Seeing how quickly any college or university can suffer reputational damage, and how lasting that damage can be, underscores how valuable an institution’s reputation is, and how critical it is to safeguard it.
The book Reputation management: The key to successful public relations and corporate communication by New York University professors John Doorley and Helio Fred Garcia opens with a quote from Warren Buffet who addressed a group of Salomon Brothers managers in 1991 after the firm became mired in a high-profile trading scandal: “If you lose dollars for the firm by bad decisions, I will be very understanding. If you lose reputation for the firm, I will be ruthless.”
Although numerous surveys show that many leaders of higher education institutions place the same value on reputation as Buffet does, effectively managing these risks remains elusive. In fact, most cannot even define what reputation is.
Defining Reputational Risk
In the article How to Manage Reputation Risk, Nir Kossovsky addresses the definitional ambiguity directly. “From your boardroom and C-suite to the SEC and Office of the Comptroller of the Currency, everyone agrees reputation risk exists, yet few can describe it. However, this isn’t as difficult as it seems.” Kossovsky defines reputation as the expectation of behavior that is set by stakeholders. “Customers have expectations when they buy products or services, employees have them when they accept jobs, vendors have them when they partner, creditors and investors have them, and even regulators have them.” For colleges and universities, this extends to the communities that house them, the potential pool of students and parents considering attendance, research partners, and the other organizations that interact with them.
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Organizations often miss a crucial step in their drive to acquire and implement technology as a means to remain competitive. The ability of commercial insurance brokers to leverage data and analytics to bring in new business, write policies, and provide added value to their clients is about more than selecting the best risk management information system (RMIS). To get the most out of the investment in technology and become a digital leader, a brokerage should first assess if essential foundational elements are present.
The next-level broker
A next-level brokerage is a firm that has undergone the process of digital transformation, a term that CIO contributor Mark Edmead defines in Digital Transformation: Why its important to your organization as “the acceleration of business activities, processes, competencies and models to fully leverage the changes and opportunities of digital technologies and their impact in a strategic and prioritized way.”
An anonymously attributed response to the Commercial Property/Casualty Market Index (Q4/2018) survey question, “What opportunities for commercial insurance brokers do you see?” can be also be read as a more specific description of the next-level broker. He or she is able to “maximize use of technologies and analytics to grow business and do so with reduced expenses.” Furthermore, the next-level broker has the “[i]ncreased ability to target growth in select industries via use of data and analytics.” Finally, he or she is able to “[i]dentify new ways via technology and through the use of data and analytics, to solicit, write, and service business.”
Analytics functionality is an essential component in the digital transformation into a next-level brokerage. However, the act of putting a RMIS in place (or modernizing an existing system) doesn’t mean that all expectations around analytics will automatically be met. The right mix of people and data must also be present.
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Data silos not only create obstacles to effective operations, but can also directly affect your bottom line. Listed below are five common issues associated with siloed data and ways to avoid them.
1. Creates a dependency on inefficient external reporting applications
Multiple platform architecture complicates the reporting process. While third-party reporting tools can be used to analyze data across multiple systems and produce unified reports, there are costs incurred. Forrester reports that nearly half of all data professionals spend at least as much time prepping data as they do analyzing it. This inefficiency worsens in cases where reporting reveals a need to modify how data is captured or organized, forcing analysts and IT resources to trace data all the way back to its original source and then make changes.
In some cases, third-party reporting tools can also create a gulf between those who master the reporting technology and those seeking answers from the reports. In a recent interview, Christopher Ittner, chair of the accounting department at The Wharton School, discussed how this division affects the business process:
“What we are finding is that in a lot of companies, there are great data scientists and great business people but what is missing is business people who know enough data analytics to say, ‘Here is the problem I would like you to help me with.’ And then they can take the outcome from the data scientists and see how they can best leverage it. That is where we must get to in the next couple of years if we want to take advantage of the digital technologies.”
Providing users with direct access to reporting that requires no prep work solves both issues. End users can become their own data analysts and answer the business questions that apply to their work. Without the requirement to master the technical process of assembling, scrubbing, and joining data from multiple systems, reporting becomes more efficient, effective, and scalable.
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As hospitals and healthcare organizations work toward better patient care, they can begin by taking a closer look at their internal processes and technology. A reliance on disparate systems that fail to share data efficiently puts organizations at risk of falling short of the demands of modern healthcare. The Agency for Healthcare Research & Quality stated that one of the three most critical challenges facing today’s healthcare organizations in their mission to improve patient care is “establish[ing] an integrated data, analytics, and information platform, along with the necessary technical expertise, to capture a 360° view of the healthcare system.”
The healthcare claims process, too, can benefit from a single integrated healthcare risk management system. Having incident reporting and claims management functionalities working seamlessly in one platform offers three major advantages.
1. Increased efficiency and accuracy
Just as working with a single insurer is easier than working with several, integrating healthcare incident reporting and healthcare claims administration into one system can be easier than tracking each in separate systems. But unlike insurance, where receiving multiple coverages from the same insurer may not be possible, hospitals can integrate incident data and claim data with ease through healthcare risk management software like Origami Risk.
Having all data in one system adds convenience for healthcare risk managers who may have previously had to toggle between systems to follow along with the claim lifecycle—from the initial reporting of an incident to the closure of the claim. A daily reality that the article Improving Claims Management with Advanced Integration summarizes as “the need to switch between multiple software systems in order to find all the relevant information on a specific claim. It’s critical to have all pertinent data in one spot to reduce and/or eliminate this quest for data.”
Navigating between two systems also results in detrimental switch costs, the fractions of seconds that occur when moving back and forth between systems. These switch costs rapidly compound, leading to wasted time and increased errors, including misaligned data. With an integrated healthcare risk management system, healthcare risk managers no longer have to bounce between systems throughout the claim lifecycle. If an incident turns into a claim, they can monitor it or move it further along in the process without losing the original incident record.
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Managing certificates of insurance (COIs) has always been a challenge. With increasing pressure on the budgets of state and local governments, dedicating the resources required to effectively manage this process can mean sacrificing time spent on other core functions. Relying on color-coded spreadsheets and a manual review process often leads to unsustainable procedures that fail to scale and adapt as an organization grows.
COI management is risk management
Although the process can be a time-draining administrative exercise, COI management is fundamental to managing risk transfer. The article Contractual Risk Transfer Issues: Reviewing Certificates of Insurance highlights the important role COIs play in risk management, noting, “Because many liability losses occur through the transfer of risk, it has become necessary for a Risk Control Consultant to assess the hazards and controls arising from contracts and agreements in a fashion similar to identifying other hazards, such as exposed wiring or missing guardrails.”
Most public entities are obligated to carefully monitor COI compliance in order to control unidentified risk transfer. Yet the administrative burden associated with endless cycles of hunting down updates and monitoring for expirations or deficiencies can easily exhaust any department. Given the mandate public entities have to stretch every resource to the furthest extent possible, the tension between the importance of an effective COI management process and the toll it takes on those managing it is difficult to resolve.
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Steve Schmutz is a successful entrepreneur with an extensive technical background and more than 20 years of experience in software design and implementation. He has founded and run two software companies, including Origami Compliance (formerly, ClaimWire, LLC), which integrates with any claims management system to provide automated workers’ compensation forms, compliance resources, and regulatory information.
Q: Why is the “build or buy” question important to consider?
A: The “build or buy” decision isn’t limited to software. It’s a question that has been around forever. Homeowners evaluate whether to pour their own patio or have a professional do it. Budding artists wonder if it would be best to create their own website or have a more experienced web designer do it. But when it comes to enterprise software, the stakes are much higher than many other situations. Making the wrong decision can cost millions of dollars and put your project years behind. We’re talking about the type of mistake that can, quite literally, take a company down.
Q: Where should an organization begin?
A: They should start by creating an exhaustive requirements list. Making the build-buy decision before knowing its requirements is like arriving at the airport before knowing where you’re going. The list should be as thorough as possible. Creating this is absolutely worth the effort. Doing so provides a true picture of the scope—breadth, depth, and length—of a project. Without an understanding of these details, it’s impossible to make an informed decision.
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Complying with Bank Secrecy Act/Anti-Money Laundering (BSA/AML) regulations is a major challenge for financial institutions. Those found with deficient practices are subject to receive a Matter Requiring Attention (MRA) notification. The Office of the Comptroller of the Currency (OCC) states, “MRAs communicate specific supervisory concerns identified during examinations in writing to boards and management teams of regulated institutions. MRAs must receive timely and effective corrective action by bank management and follow-up by OCC examiners.”
This combined requirement of timeliness and proof of effectiveness makes delivering an acceptable response particularly challenging. Unfortunately, MRAs are not uncommon. The article Get to Know the “5 Cs” — BSA Matters Requiring Attention notes, “Most banks receive some sort of finding or ‘Matter Requiring Attention’ (MRA) or ‘Matter Requiring Immediate Attention’ (MRIA) regarding their BSA Program during a BSA exam.” Given the likelihood of receiving an MRA, and the burden associated with the response, developing a robust process to handle them is essential.
This post will examine how the right Enterprise Risk Management (ERM) system is uniquely suited to not only help efficiently and effectively respond to the challenges associated with MRAs, but also (when properly configured) help minimize them.
To understand how this is possible it is useful to “learn from the mistakes of others.”
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An analysis of the 2017 Public Entity Employee Safety & Loss Control Survey by Frank Altiere III, RIMS fellow and president of PMA Management Corp., highlights the importance of strategic loss prevention. “Now more than ever, the best strategy is to take a holistic approach to risk management to prevent claims from occurring in the first place with loss control strategies,” he writes. The most successful safety strategies cited in the survey involved employee safety training and improving the safety culture.
While 3 out of 4 survey respondents indicated that they planned to conduct more training, a majority also indicated that their safety programs were either underfunded or significantly underfunded. With that being the case, it’s hardly surprising that respondents listed “Developing strong safety attitudes among managers and supervisors” as the top challenge to workplace safety.
Risk pools to the rescue
Given the desire to improve safety culture through training and the reality of shrinking budgets of members, the services of loss prevention specialists associated with risk pools are especially timely. The ability to deliver training to member organizations that may not be able to otherwise afford it is a tremendous benefit. To truly change a culture, however, it may take more than training. Fostering the engagement of employees will go a long way toward developing the strong safety attitudes members demand.
“A hallmark of a strong safety culture is employees who are engaged in safety and are empowered to advocate for a safe culture,” Altiere notes, citing studies that confirm the dramatic effect engaged employees have on safety incidents. While these benefits are well documented, the steps necessary for actually engaging employees seem far less obvious. “Keep in mind that employee engagement must be earned, and that leadership is critical to engagement,” Altiere warns.
Pairing loss prevention resources with audit technology could be the key to creating engaged employees for your members and fostering sustainable safety cultures that deliver lasting improvement.
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Greater efficiency in handling workers’ compensation claims can contribute to a reduction in claim costs and improved claim outcomes. These gains are quickly undone when errors result in penalties for the violation of state-specific workers’ compensation laws.
According to the article Avoid Workers’ Comp Penalties and Other Pitfalls, two of the five most common errors that result in penalties occur when filing First Report of Injury (FROI) and making mandated benefits payments to claimants. The use of workers’ compensation technology solutions can reduce the likelihood of making these errors, in addition to streamlining the claims process.
1. Simplify the process of completing First Report of Injury (FROI) forms
As mentioned in Improving adjuster efficiency and accuracy with an integrated forms solution, the process of locating a workers’ comp form and then keying claim details into form fields for every claim can be tremendously inefficient. This administrative burden reduces the time available for staff to engage in other activities that can have a positive effect on claim outcomes. This approach to populating forms also has the potential to add costs, including fines for late filing, errors, or the need to correct and resubmit forms.
The article states: “A reliance on manual data entry increases the likelihood of error and exposes the organization to the costs of bad data. In most cases, the work is also duplicative, with claimant and accident details having already been keyed into the claim system.”
The submission of inaccurate or incomplete claim details in the FROI can have consequences beyond the potential for incurring penalties. In the article First Report of Injury Accuracy Critical for Workers Comp Success, Rebecca Shafer, an expert in the field of workers’ compensation, points out that multiple parties typically use the information in the FROI when setting up their workers’ compensation files. As a result, even minor errors on the reports can be copied, creating complications down the road. And while these errors can be fixed by re-submitting a corrected form, Shafer writes that doing so “is a waste of time for all the parties involved. Plus, when the First Report of Injury is inaccurate or incomplete, it can often be exploited by the employee’s attorney.”
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An abundance of data accumulates in the claims management process. And while that data relays critical facts about each claim, that’s not the only insight it can provide. Data, no matter how seemingly unimportant, has the power to unleash valuable insight into your overall claims strategy. As the article Effective Data Discovery Can Be A Difference Maker For A Company’s Long-Term Success says, “Data that you may not even take into consideration can end up giving your company great insight after using proper analytics and data discovery techniques to make sense of it.” The failure to engage in data analytics means your organization may miss out on potentially rich data that sparks innovative strategy.
Benchmarking is one of the most powerful forms of data analytics. Used to measure competitor success and find areas for your organization to improve, benchmarking thrives on an abundance of data. With the right risk management information system (RMIS), you’ll not only be able to seamlessly collect troves of essential data, but also use benchmarking and other data analytics tools to extract meaning from it.
How does benchmarking make your data meaningful?
Data analytics can improve claim outcomes and, in some cases, help to prevent future claims by identifying trends and outliers that may otherwise go unnoticed. Benchmarking, specifically, involves comparing your data and performance against the industry’s best, which helps identify opportunities for improvement and establish long-term goals.
For example, risk managers, insurers, TPAs, and others who work with workers’ comp claims benefit from the annual Workers’ Compensation Benchmarking Study, conducted by Rising Medical Solutions. The study goes beyond merely reporting how claims payers are conducting business and outlines “how organizations turn the challenges identified in the prior studies into solutions and action.” The report’s mission is “to advance claims management in the industry by providing quantitative and qualitative research that identifies what high performing claims payers are doing differently than their peers.”
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