Though headquartered in Middleton, Wisconsin, Megalodon Insurance Systems has a few employees – including this author – who grew up as Cubs fans near Chicago. To say we are overjoyed by the North Siders winning their first World Series title in 108 years is an understatement.
So what, you may be asking, does baseball have to do with insurance policy and claims administration software? On the surface, perhaps not much. However, the following story speaks to how choosing the right software system can play a central role in transforming a business or, in the case of the 2016 Cubs, a team.
Just as in finance, transportation, medicine, insurance or nearly any other industry, the ability to access and analyze information to make informed decisions is critical to the success of a team. Baseball is awash in data yielding statistics that, for example, help general managers decide whether to trade four minor league prospects for a left-handed relief pitcher or inform the manager which player to pinch hit in the bottom of the 8th inning with runners on second and third in a tie game. The results of these hundreds of thousands of data points, which inform tens of thousands of decisions throughout the course of a 162-game season, help determine which teams advance to the playoffs and which teams (and their fans) have to “wait ‘til next year.”
The Chicago Cubs Baseball Club is a $340 million (2015 revenue) business that, like companies in other industries, has departments of finance, human resources, marketing/sales, information technology, etc. Prior to 2011, the team’s software system used to analyze players’ statistics and tendencies was antiquated. Not only did the big league club’s software not “talk to” those used by its minor league affiliates, but how players were coached differed at each level, from the Arizona Rookie League to Double-A to the major league squad. The inconsistency in front office operations – which resulted, in part, in inconsistent coaching of concepts and techniques throughout every level of the organization – yielded all too familiar results on the field: after being swept from the playoffs in 2007 and ’08 and barely missing the playoffs in ’09, the Cubs finished last in their division in 2010 and ’11.
Then, in October 2011, Theo Epstein was hired as the Cubs’ President of Baseball Operations. (Epstein was the 28-year-old general manager of the Red Sox who, in 2004, was the architect responsible for Boston’s first World Series title in 86 years.) Not surprisingly, he found the baseball organization in complete disarray. Concurrent with writing “The Cubs Way” — a 100-plus-page manifesto given to each player and employee that detailed expectations right down to which foot players were to use touching second base when running from first to third. Epstein chose Bloomberg Sports to design a new player-evaluation system for the baseball operations department.
“Carmine II”, named after a similar system Epstein designed during his Red Sox tenure, became the central place where Cubs personnel file reports for scouting, background, medical status on their players as well as information on opponents, potential draft picks and international signings. It also includes video, a statistical database and has mobile capabilities. All of the Cubs’ minor league affiliates have access and contribute data to Carmine II so that any coach or scout has 24/7 access to any player’s information.
While the Cubs continued to finish last in their division during Epstein’s first three seasons (2012-14), the financial and time investment in Carmine II paid off by giving Epstein and his staff more data to evaluate players. With every coach throughout the organization – from Single-A South Bend to Triple-A Iowa to the Major League squad – pulling in the same proverbial direction, the team surprised many by winning 97 games (and making the playoffs) in 2015 before winning it all this past season.
There are several morals to this story, from hiring qualified people…to articulating a strategic philosophy for team members to follow…to choosing the right software to effectively leverage the power of data. And it’s that last point that connects the bridge from baseball to policy and claims administration software.
Megalodon has met with many small insurance companies and captive managers that continue to manage their operations using outdated software and/or processes, such as keeping track of clients, quotes, claims, etc. using a patchwork combination of Outlook, Word, and Excel.
Most of the executives we speak with understand the organizational efficiencies could be gained by investing in a modern system, but other systems have been unaffordable. They are eager to hear about a new option that offers a powerful yet affordable policy & claims management system. Megalodon insurance Systems provides web-based, 24/7 access and a 360-degree view of all of a company’s policyholders, claims, reinsurance partners and contracts, etc. Just think how much easier reporting could be if, for example, a single policy with four types of coverages shows which reinsurer covers Coverage A, which has Coverage B, and so on.
While cost may not have been an issue for Theo Epstein and the Cubs in creating Carmine II, it is a critical consideration for our customers. How nice would it be for a software company to charge twenty to forty percent less than its competition for a policy/claims platform that some say is twice as good as its competition?
When used properly, software has the power to transform an organization, whether or not it is the Chicago Cubs or a community-based mutual insurer. Want to be a part of a winning team?
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– Jim Reuter, VP Business Development, is passionate about improving insurance operations using forward-thinking software and systems. He also really, REALLY loves the Chicago Cubs. To talk to Jim directly, please call (608) 709-2154 or drop him an email at email@example.com.