How Much Do I Need to Spend to Keep my Technology Humming?


In my last article, I provided advice on how healthy, operationally mature agencies should be investing their IT spend to achieve high performance. In this article, I will review how much you should expect to spend to maximize the value you get from your technology. I will be reviewing costs associated with six major categories that require IT investment: 1) agency management systems, 2) sales automation, 3) office productivity software, 4) user/desktop experience, 5) proactive management and support, and 6) security and compliance.

1. Agency Management Systems

Market leading agency management systems such as Applied Systems’ EPIC or Vertafore’s AMS360 will cost around $150 per month per user to obtain the comprehensive functionality of a modern agency. This includes features such as policy download, invoicing, claims tracking, sales/renewal management, and financial reporting.

Deploying these applications or migrating to a new system is a significant undertaking requiring a large investment in both labor and capital. For a successful agency management deployment, we typically see agencies spend in the neighborhood of $2,000 per employee in project implementation costs. Agencies who try to cut corners in order to reduce costs are often disappointed with the results. We strongly warn agencies NOT to cut corners, especially when it comes to data conversion preparation and employee training.

2. Sales Automation

Sales automation is generally included in the full featured industry leading products from Applied Systems and Vertafore. If you have one of these products, your out-of-pocket costs are covered above, but you still need to take the time to build workflows and train staff to deploy best practices. If you choose to go a different route and deploy a niche market product, you will likely see much lower rates for agency management. This might be the right solution for you depending on your needs and your willingness to complete the solution through other processes or third-party applications. Depending on the agency management system you select, some of these savings may need to be earmarked for a third-party sales management tool such as along with consulting to successfully integrate the application and processes with your agency management solution.

3. Office Productivity Software

Generally, office productivity software is provided via Microsoft Office 365 subscription service. A typical agency requires business email and Office applications including Word and Excel. The Office 365 service bundles that include these components start with Office 365 Business Premium which is $12.50 per user per month. If you need data encryption and archiving, your subscription costs could rise to about $20.00 per user per month. Most agencies will require a technology consultant to effectively perform the initial deployment of Office 365. Also, since Office 365 data (email, documents, etc.) are not backed up by default, make sure you are utilizing a backup service so that your data is fully protected. This can add $2-$4 per user month. Finally, the cost will increase if you choose Office 365 bundles that include applications such as SharePoint, OneDrive, Skype, and Teams.

4. User/Desktop Experience

This will vary depending on the specific user requirements but for simplicity, we will consider two examples: a typical office-based user and a typical mobile user. Minimum requirements for a typical office-based user includes a business class PC with an Intel Core i5 class processor, 16 GB RAM, 250 GB Solid State hard drive, running the Windows 10 operating system. This system currently costs about $1000 plus approximately two hours of set up time for your technology provider. For high quality monitors that reduce eyestrain, provide ergonomic benefits, and improve user productivity, expect to pay about $400 for a pair of good quality 22-inch widescreen monitors suitable for business use.

The tool of choice for mobile employees is the 2-in-1 laptop. These devices are convertible from standard Windows 10 laptops to touchscreen tablets. Depending on features, these devices can vary greatly in price. A typical 2-in-1 device with a 13 to 15 inch screen provided by a major vendor (Dell, HP, Lenovo, Microsoft) will cost between $1300 and $1600. Our agency clients typically add a docking station, so they can seamlessly transition to their office environment. This usually adds about $300.

5. Proactive Management and Support

A competent technology provider is extremely valuable in advising you on your technology investment and keeping your agency running effectively. Rates for such service can vary greatly depending on how comprehensive the services are. Proactive, high quality services cost about $100 per user per month (excluding backup/disaster recovery services). At this rate, your provider should be conversant in agency operations and should provide strategic technology reviews. Also included should be help desk support and basic security products such as spam filtering, endpoint protection, computer updates, firewalls, and gateway security. Finally, they should interact on your behalf with your other technology vendors such as phone system supplier, internet service provider, and agency management system vendor.

Backup and disaster recovery costs can vary depending on agency requirements from simple “file-based backup solutions to very expensive high availability alternatives. An in-between solution that will keep your data safe and secure with an “image-based” backup of your systems costs between $300 and $600 per month depending on the amount of data.

6. Security and Compliance

This area is somewhat immature and evolving as the threats, compliance requirements and tools all continue to change. Some of the services you should expect to be procuring include: regular security assessments, security awareness training for your employees, mobile device security, and data encryption. Managed Security services are typically an add-on service costing approximately $ per month.

I hope this overview gives you a sense of the costs associated with key aspects of your agency’s technology. Strategically planning the best use of your technology dollars will go a long way in improving your agency’s productivity and make you more profitable.