There are business reasons for concentrating on one method or allowing all of them.
Here we discuss purely the systems and software implications.
Let's say it costs x to get the system to do direct debits, and y to get it do credit card billing.
Say it costs w to have the right security model of who can run what processes. And say it costs v
to have reports that suit the company, its agents and its underwriters. The mistake is to think
it will cost x + y + w + v to have the full system which securely bills in both ways and reports
perfectly on all the payments.
The difficulty is that these areas are not independent. The security model needs one set of
attributes for direct debits (who is allowed to process bounced premiums?) and another for
credit card processing (do you really want to hold the card details permanently on your system?).
There needs to be a report for credit card charges, another for direct debit charges and probably
a third that attempts to combine the two, even though the processes for dealing with exceptions
are different in the two cases.
The cost is more like ( x + y ) times ( w + v ). A number which is scarily bigger than x + y + w + v.
A company which allows for every variation on the collection of premium will see systems costs spiral
out of control.
The same principle applies to every element of the business. Do you process claims in-house or
are they done by another party? Do you want the system to calculate the rate or do you want
your staff to control the pricing? Do you post correspondence or can you use email for the agents?
In each case the wrong answer is 'both'. Systems cost more if they have to cover different methods.
If you are looking to control software costs then you should see 'both' as a four-letter word.
Will your business be worse off in other ways? If you have ten different combinations of ways of
collecting premium, then some of them will account for under 10% of your income. Time for a bit
of streamlining. After all, Henry Ford did all right out of selling cars in "any colour the customer
wants, so long as it's black".
K.I.S.S. is a popular acronym - Keep It Simple, Stupid! We propose that the alternative can be
summed up as C.I.R.C.U.S. - Complicate It and Render Cash Unto Systems.
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