In today's competitive marketplace, insurance companies are looking for ways to keep costs under control while remaining nimble and flexible. Until recently, the only model for purchasing a modern communications system involved committing to sizeable upfront capital investments. Now insurers have the option of reducing their total cost of ownership by selecting insurance cloud solutions instead.
Here's a look at why insurance companies are making this transition and the multiple benefits they realize along the way.
Grappling with the Traditional TCO Challenge
Until recently, an insurance company had to go all in from the very beginning if it wanted to make a strategic investment in a communications system — particularly if video conferencing was involved. Oftentimes an insurer had to sink a considerable amount of money into the network hardware, communications appliances, and handsets required to get the job done. These capital expenditures were rather inflexible, and an insurer couldn't easily scale them up or down as needed after the fact.
If the company discovered that it ultimately needed more capacity than originally planned, chances were pretty good that it would need to make — you guessed it — another hefty investment in capital expenditures. Or, if the insurer found that it had overestimated the communications capacity it needed — having outfitted phone service for 50 employees when it only ended up hiring 40, for example — it would be stuck with a higher than necessary TCO.
For quickly growing organizations or companies with multiple branches, the planning and expenditures associated with a robust communications system often posed a considerable business challenge — in addition to an eyebrow-raising TCO. And that precious capital, once committed, couldn't be reallocated to another strategic project if circumstances changed. For quite some time, this inflexible pricing model kept insurance companies from enjoying the agility they wanted.
For insurance companies aiming to make a strategic investment in a communications system with a lower TCO, there's never been a better time to do just that thanks to the flexibility and innovation made possible by the cloud.
Insurance Cloud Solutions Provide a Better TCO
By contrast, today's insurance cloud solutions offer greater flexibility and far more attractive TCO. By selecting a cloud-based subscription service that allows them to pay only for the services they use, insurance companies can keep their technology costs manageable and predictable. These operational expenditures do not require nearly the level of upfront investment that the old model demanded, significantly reducing required overall start-up costs — not to mention start-up time — that might otherwise be daunting to many companies.
As a result, insurers can scale their communications for growth or toward a lean model as necessary, investing only the precise amount that is needed while still enjoying the full complement of enterprise-grade communications features that such systems have to offer, from video conferencing on demand to convenient mobile apps that support telecommuting programs. This means that insurance companies can easily expand their businesses, knowing that they have a solution in hand that will grow with them in a cost-effective manner, rather than forcing them to cough up a hefty sum in advance.
Cloud Communications Solutions Support Business Growth
Insurers can secure two victories at once by transitioning to insurance cloud solutions. As a defensive measure, they can avoid disruptive, expensive up-front capital expenditures by taking advantage of the flexible licensing options that today's cloud-based communications systems offer. And on the proactive side, insurers can gain just the sort of business flexibility needed, both in financial and operational terms, to better meet their short- and long-term strategic goals. All the while, they can more effectively navigate the shifting tides of the challenging business environment in which they find themselves.
And since the cloud provider handles the IT administration of a cloud-based communications service, the insurance company can spend more time focusing on delivering an exceptional customer experience that grows the bottom line instead of worrying about dealing with time-intensive administrative upkeep or business-halting downtime. Cloud-based communication tools even provide insurers with an added layer of disaster recovery resilience, remaining available and open for business even in the event of a weather emergency or other unexpected event. Virtual 24/7 support is also at the ready to promptly resolve any problem, day or night.
Cloud Communications Solutions Enable Innovation
Cloud communications solutions don't simply help insurance companies mitigate costs and run more efficiently. They also help prepare insurers for the future, often allowing them to take advantage of the latest technology innovations without having to make any additional investments. Simply by virtue of having a license agreement in place, an insurance company can tap the full potential of a cloud-based communications platform and enjoy new features as they become available.
In addition, since many of today's cloud-based communications systems integrate with leading cloud-based business applications, insurance companies can actually extend the value of their technology investment even further, securing attractive ROI in the process. They can also take advantage of the latest technology innovations, such as AI-powered chatbots, to leapfrog past the competition.
With a cloud-based communication system, insurers can enjoy both an attractive TCO and a healthy ROI. In fact, they can meet these important financial objectives while also opening the door to future technological innovation — all at an affordable price point. For insurance companies aiming to make a strategic investment in a communications system with a lower TCO, there's never been a better time to do just that thanks to the flexibility and innovation made possible by the cloud.
Learn more about how Vonage insurance solutions can help with cloud-based communications.