Implementation Budget Going Down The Toilet?

flabbergastedA friend recently experienced a leaky toilet. Thank goodness instead of calling me, he called a plumbing company to address the issue, and it was resolved successfully within a few hours. Yet a couple weeks later, he received the bill and was flabbergasted. The total was twice as much as he had expected. After a little reflection, he realized why. Instead of sending one plumber, which in his opinion would have been sufficient based upon the issue, the company sent two. He hadn’t thought of it at the time, but each man was being billed by the hour independent of the other. What took a few hours in real time took several in billing time.

Had this information been offered or considered, he likely would have used a different company (or regrettably…called me). Of course, from now on, he will choose another course of action...maybe he will even check Angie’s List. This time, however, it was a costly lesson in setting expectations and knowing which questions to ask.

While not all companies are as duplicitous as my friend’s plumber, hourly work can be tricky, even in the insurance industry. Everyone has stories about how a project was supposed to take a certain amount of time, but was extended due to “unforeseen circumstances.” They typically call it scope creep, and prices have been known to grow exponentially. Worse, once a project is started, you’re stuck—or you face spending even more money and time firing one company and finding another.

Exponential growth of hourly projects is frustrating, and in insurance customer communications, the difference of inflation goes well beyond the few hundred dollars incurred in my plumbing example cited above. In fact, I’ve heard stories of insurance companies that pay $2 million for a new technology or software system only to be charged $12 million for implementation and professional services by a consulting firm.

At CEDAR, we take care of everything, and our billing is transparent. We meet with your team before starting any project to talk about your needs and your budget. Then we establish expectations with a fixed-fee pricing model. That’s right, one flat fee for the system and the implementation.

Competitors who multiply their fees like rabbits give the customer communication industry a bad name, and we have worked extra hard to ensure CEDAR is one of the “good guys.” Our mission—and our promise—is to do what we say we are going to do. Rest assured, with CEDAR you can avoid overflowing hourly charges and flush away the worry of overshooting budgets and bankrupting departments, which—pardon the pun(s)—can really stink.