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Reducing Risk with Software

Reducing Risk with Software

As humans, we’re not very efficient at processing information. We’re forgetful, make mistakes, and usually feel like we get pulled in ten different directions. How do we know what to prioritize? This is where software comes into play. Business management software is one of the easiest ways to elevate your business and reduce your risk. The software can find blind spots you couldn’t see so that you can manage your business with clarity.

In this article, we’ll discuss how software reduces your risk and what items you should consider when searching for management software. 

How Software Reduces Risk

Industry-specific management software allows you to focus on what’s important. The key features we’ll discuss are how it improves your work orders, route planning, and business decisions. 

Proposals & Work Orders

Clear communication between you and your customers is vital to reducing risk. Software creates harmony between customer expectations and the crew’s orders. Digital proposals contain much more detail than paper versions. You can attach extra notes, optional add-ons, and images or videos of items. This saves time and answers customer questions before they arise, leading to higher proposal acceptance rates. When a proposal is accepted, the same information is transferred seamlessly into a work order. Crews save time by knowing what equipment they’ll need for each job, and they won’t forget important details because they can always refer to the digital copy. 

One of our favorite features included in work orders created within SingleOps is the ability to attach aerial Google Map images of the job site with markers clearly showing the exact areas that will be worked on. This reduces the risk of crews working on areas they shouldn’t or missing items meant to be worked on.  

Route Optimization 

Prior to software, drivers would need to predict the optimal route to take using their best judgment and their maps app. Since management software has route optimization features, the risk for human error is greatly reduced. Using route optimization takes control out of the driver’s hands and turns it over to the software, which can analyze all the inputs and calculate the most efficient route for a driver to take in seconds. This reduces the amount of fuel, downtime, and confusion drivers have so crews can get to the job site faster and more efficiently. 

If you have more questions about how route optimization works within SingleOps, you can read this help center article.

Business Decisions 

Running a business can feel like flying in the dark sometimes. There’s always the possibility that you’ll be given the wrong information or not have enough information when making a decision. Management software can help organize your data to ensure you have an accurate picture of your operations. 

Management software comes with reports and dashboards that allow you to analyze any aspect of your business. Some of the most helpful reports you can create are labor analysis and profitability reports. Analyzing your labor allows you to identify the most efficient and profitable crews, which you can then use to schedule your highest performing crews for the most important projects.

Besides knowing your labor profitability, the software makes it easier to calculate net-profit margins by segment. This can help you identify which segments of your business are the most profitable. Many businesses assume the segment that brings in the most revenue will also be their most profitable, but this isn’t always the case. You don’t want to run a business based on incomplete data or assumptions.  

What you should consider before buying management software

Searching for the right software can be a challenge because many people don’t know what to look for. Here are suggestions to consider when looking for the right one. 

What are my needs?

Each tree care company has different priorities. Likewise, different software caters to different types of companies. The important part is finding the right one for you. Identify your biggest challenges and search for software that can meet them. Once you know the direction you want to head in it will be much easier to narrow down your choices.

How easy is it to use the software?

Don’t confuse complexity with software capability. Two companies can offer software with the same features, but one can be highly technical and require many hours of training while the other gives you the same functionality but requires half the training. Software that is too complex can lead to burnout and abandonment of the project altogether. Finding the right balance between complexity and functionality is key to the value your team will get out of the software. 

Implementation/Customer Service

Does the software provider you’re considering partner with you every step of the way, or do they only send you self-starter guides and videos? Not every implementation team is built the same or offers the same amount of care. You’ll want to evaluate the kind of support you’ll receive during implementation and post-implementation. Look for a company that wants to partner with you and provides a high level of service. Remember, you are going to have bumps and glitches along the way, you’ll want a team dedicated to helping you solve those problems.

Price vs Value

ROI is one of the biggest factors for companies when selecting software of any kind. In addition to assessing management software, you’ll need to find out if you’ll have to purchase add-ons or third-party software to get the most out of the platform. You’ll also want to look at their pricing structure to identify your monthly and annual costs. You’ll also need to know how many licenses you’ll have to purchase for your teams.

Conclusion 

Finding the right software mitigates risk to your company by creating clear communication at all levels of the organization, reducing human error, and saving time. Landscape and tree care companies have learned that Excel and email are inefficient and error-prone methods that ultimately result in lost opportunities. Reduce your risk and propel your business forward by investing in smart, user-friendly software. To learn more about SingleOps and/or how their customers respond after implementation, please contact the SingleOps team at [email protected].

Written By: Joshua Lehto, SingleOps Marketing Associate & Ty Demeer

 

Frequency vs. Severity of Insurance Claims

Frequency Vs. Severity of Insurance Claims

“I have insurance, I’ll just file a claim.”

Have you heard yourself saying that before? I’m sure you have at least thought it in the past. Unfortunately, a common misconception people have about insurance is that small claims will not affect them since the insurance company is still taking in more money from the premiums that are paid than the amount they are paying out in claims.

In reality, when comparing two businesses against each other, one that has multiple small claims versus one that has had only one large claim, every insurance company will look more favorably upon the business with only one claim. Why is that?

When assessing the risk of a business, insurance companies look at three factors when it comes to their claims; the cause(s) of loss, the frequency of similar incidents and the severity of each. Claims are typically categorize them into these four classifications:

1. Low Frequency – Low Severity
2. High Frequency – Low Severity
3. High Frequency – High Severity
4. Low Frequency – High Severity

With these four classifications in mind, the business owner can decide how to best handle losses to be viewed as a better insurance risk to the insurance companies.

Obviously, we know, the more favorable you look to an insurance company, the lower the premiums you will pay. So the business owner has four different ways to respond. Pssst, this is called Risk Management.

1. Accept the risk and budget for the impact of it
2. Prevent the risk by using loss control or safety measures
3. Avoid the risk all together
4. Transfer the risk to someone else

As you have probably figured out, insurance is for risks that have Low Frequency – High Severity and the reason we need to transfer the financial burden to someone else is because the risks are not predictable.

They can be things like a tornado taking out your shop, or an employee that is struck by a tree while on the jobsite. These risks would lead to claims that could have a huge financial impact on your business and potentially even lead you to close up shop. Insurance companies are comfortable covering these risks due to the law of large numbers, an insurance term meaning that as they add more policyholders, the probability of each one having a severe claim goes down.

What worries the insurance companies the most, is when there are a high frequency of low severity claims. This is simply because the more small claims you have the likelihood of a large claim happening is much greater.

For example, if a tree service has a large number of small fender benders, it likely means safe driving practices aren’t in place, their vehicles are not well maintained or they are employing reckless drivers. Over time, it is inevitable that a larger auto claim will occur.

Consider workers’ comp as well. Does your business have more than a couple laceration claims in the last couple years? Often times we’ll see laceration claims close for around $3,000, but it doesn’t take much more for a small laceration to turn into a permanent partial disability claim where a great employee loses a finger or even hand. And if chainsaws are causing issues, might there be other body parts with some exposure as well?

Telling your team you’ve seen an uptick in claims and explaining the repercussions is a great place to start. Also consider areas like your on-boarding process, safety meetings, and post-accident discussions. Get creative with this as each company likely has different experiences but you should be able to narrow down your problem areas based on previous claims or close calls. Refer to a previous article that I wrote titled “How To Get The Most Out of Your Safety Committee”, as this could be a job for your safety committee to take a deeper look at.

Now you know that when insurance companies asks for loss runs and sees a high frequency of claims, they are not only assuming you will continue to have more claims, they are also assuming that you are likely to have a much larger claim in the near future.

Work with your insurance agent to review your claim history and see if you notice any trends. It helps to write out which type of risks you want to pay attention to with loss control and safety training, which risks you’ll cover by paying out of pocket, and which risks you want to transfer to insurance. Look at that, you just created a Risk Management Plan!

And as always, feel free to reach out to an ArboRisk team member if you have any questions on how to best minimize your exposures to loss and ultimately secure the most competitive insurance rates!

Written by: Malcolm Jeffris, CTSP