Ignorance Is Expensive - BodyShop Business

Ignorance Is Expensive

Both the autobody and insurance industries are throwing away money by relying on the estimating software companies to manage data.

Imagine this: An insurance appraiser calls you and says he’s just finished writing an estimate. The customer said she wanted the car fixed at your shop, so he’s just giving you a heads-up to check your e-mail because he’s sent the estimate to you.

You open your e-mail software, double click the attached file and the estimate opens up in your estimating software. You notice that he missed some standard items, so you make the changes and e-mail the estimate right back to him. He re-opens the estimate and calls you to OK the changes.

You now convert the estimate to a repair order, add a few more mouse clicks and your parts have been ordered. This all takes place in the span of a few minutes.

The next day you get a confirmation e-mail from your parts source and an electronic invoice. You notice that there are many parts price differences. You open the estimate again, generate a supplement, and a couple more mouse clicks and all the parts prices are updated.

The following week, the repair is finished. There were a few additional parts needed so you take digital photos of the additional damaged parts, add them to the supplement and e-mail the supplement to the appraiser so he can cut a final check.

Sounds nice, doesn’t it? No re-keying the appraiser’s estimate into your software so you can generate a supplement. No phone calls for parts. No manual changes in your software to update the parts prices. In all, you probably save two hours of paperwork.

As much as this sounds like the future of the autobody industry, all of this technology is available right now – at a huge cost savings to you and the insurance companies.

Why aren’t we working this way now?

It’d be easy to blame corporate greed, but that’d be like faulting Bill Clinton for lusting after a college coed or Al Franken for throwing a whiney tantrum. It’s the nature of the beast.

The reason we’re not using electronic commerce as we should is simple: It would cost the estimating companies lots of money.

I know, those evil corporations, right? It’s those money-hungry estimating companies that are hosing the rest of us. They make a good portion of their income by managing all the information the collision repair and insurance industries generate, and the estimate software companies are cold, selfish and evil for not offering us technology that would cost them millions in revenue every year.

If you’re one of those people who believe in wealth distribution, the above comments ring true. Feel free to blame the big corporations. But if you’re one of those people who made this country great – an independent entrepreneur – then those statements are a bunch whiney crapola.

The real reason we’re still clunking along with 20th-century technology is because we, as an industry, are too stupid or too lazy or too self-pitying to demand changes. And the insurance industry is even more stupid. They are huge corporations with the resources to understand technology – and to understand that they’re throwing their money away by relying on the estimating software companies to manage their data. They should know better.

All of the major estimating systems have the ability to export an estimate in the standard EMS (Estimating Management System) format, but only one, Comp-Est (owned by CCC), can do the important trick – import an estimate in the EMS format into the estimating software and open the estimate for editing. Coincidentally, Comp-Est is the only company that doesn’t offer data management services. Let’s take a closer look:

  • Mitchell – According to a salesman from Mitchell, their software has a proprietary import/export format and is able to exchange estimates from one computer to another. Mitchell also told me that some of the insurance companies that use their product use this feature instead of having Mitchell handle their data transactions, though Mitchell does offer information management services.
  • CCC – I spoke with a Level-3 tech-support person and a salesperson at CCC. I was told that you can only import information into Pathways that’s controlled or generated by CCC. For instance, DRP assignments. They don’t want information imported from outside sources because they want control of the information. They lease us the software and have a right to control where the data comes from. They claimed they were concerned about the integrity of the information. (Pathways doesn’t even export estimates in the EMS format unless you pay an additional fee to have the feature turned on.)
  • ADP – At ADP, I talked with a regional salesperson about ADP’s philosophy on the free movement of estimate information. She hinted at future changes that could possibly allow estimates to be imported in their estimating software. But she maintained that ADP still wants control of and data transfer. They have no interest in allowing users to move information without them. In other words, they – like CCC – don’t want to lose any of that revenue either.
  • Comp-Est – As I mentioned before, Comp-Est is the only estimating software that will import an estimate in the standard EMS format. And they have no plans to make any changes. They said they have no communications infrastructure like the big three. Their revenue comes from selling estimating software and monthly data updates only. (I’ve had conversations with both CCC and Comp-Est about their future plans for integration. They both indicated that they were remaining separate and that CCC wasn’t going to make Comp-Est quietly disappear to avoid the competition.)

Last year I tried Comp-Est’s software. They offer a 30-day free trial period. The first thing I did was extract an estimate from Pathways and try to open it in Comp-Est. It worked perfectly.

I immediately called my only DRP, State Farm, and asked if they could handle estimates from Comp-Est. No way! It had to be from one of the big three.

I tried to get a definitive answer as to why, but, to be honest, I really don’t think anyone at any of the insurance companies knows why. They have this misconception that the information contained in an estimate is at such a high risk of being hacked and stolen that it’s worth the millions they spend every year to let someone else be responsible for it.

Listen up and listen good insurance companies and body shops: This ain’t rocket science.

Insurance companies, you don’t need to pay to receive an estimate from a body shop.

Body shops, you don’t need to pay to receive an assignment from your DRP or to send the estimate back to them.

All you have to do is demand that those vendors who keep you trapped in the 20th century unlock those chains and provide you with a product that allows the free movement of your information.

One of the excuses I got over and over from the big three is that the integrity of their data needs to be protected. Protected from what? Protected from whom?

This notion that someone would spend the time and energy to intercept and compromise this ever-so-precious data is laughable. And even if it was vital, secret information, it could easily be encrypted. I do all my banking online. If that information is safe from pre-pubescent little hackers, I think insurance claim information would be safe.

We in the autobody industry aren’t the brightest group when it comes to technology, so when some multi-million dollar corporation tells us we can only do things a certain way, we tend to take their word as if it were chiseled into a slab of highly polished granite.

The insurance companies, fearing the loss and corruption of vital information, also play it safe by entrusting that data to the promises of the self-proclaimed technical experts.

And we all live happily ever after. After all (to shamefully use a cliche), ignorance is bliss!

But this ignorance is costing countless hours and dollars to both the insurance industry and the autobody industry in lost productivity.

A group was formed about 10 years ago called Collision Industry Electronic Commerce Association (CIECA) to develop a standard format to exchange data between estimating software, body shop management software and insurance industry software. They’ve been somewhat successful in their development, but less successful in the full implementation of this standard.

This lack of success in the implementation area is due less to technical reasons than economic reasons. To their credit, CIECA’s standards continue to evolve with information technology.

They’re currently finishing up work on their latest upgrade, which uses the universal, common XML language. Theoretically, this should allow you to open an estimate in a Web browser. Whether the estimating companies will give us this opportunity remains to be seen. They’ll have to rewrite thir software producs to convert their estimates from their proprietary format to the XML language.

I can see it now. CCC, ADP and Mitchell will respond to this with claims that I don’t know what the hell I’m talking about. They’ll try to explain just how difficult it is to change their software or how hard it would be to exchange estimates from system to system because of the P-Page logic differences. They’ll complain about the millions they’ll lose every year from the loss of their information services, and rightly so.

It will cost them lots of money.

They’ll claim that their information will be at risk. They’ll claim your information will be at risk. They’ll claim the consumer’s information will be at risk.

The insurance companies will tell us they’ve got millions invested in IT infrastructure designed to be compatible with the estimating companies’ systems.

All these excuses will be thrown at us. Some of their arguments will be valid. Some won’t. But even valid arguments aren’t excuses to not free up the flow of information.

If the estimating companies don’t make some changes soon, someone’s going to come along with the brains, resources, connections and product and convince some of the major insurance companies that they have a better way of doing things. This someone will turn the industry upside down.

So how can you give the estimating companies and insurance companies that kick in the posterior they need to catch up to the rest of the world and make the latest technology available to us ignorant autobody professionals?

Hey, I’ve fired the first shot by writing this. Now it’s your turn. Call or e-mail CCC, ADP and Mitchell. Tell them you’re tired of paying for software and services you don’t need.

Call your insurance DRPs and let them know that you want to get out of the dark ages. Tell them you’re tired of re-keying insurance estimates into your own software.

Make some noise. Raise some hell. Cause some trouble. Re-read the first two paragraphs of this rant. Think of all the free time and money you’ll have once you’re able to do all that.

Get ticked off. Not at the software companies for making money by holding back technology. Applaud their capitalistic attitudes. Get ticked off at yourself, our industry and the insurance industry for not shaping the estimating software companies’ products.

It’s the consumer who wields the knife that carves the shape of most other industries. You are the consumer who should be shaping the estimating software industry. Take a big slice.

Writer John Shortell is body shop manager at Secor’s Collision Technology in New London, Conn. He’s been in the collision industry for 20 years and has developed computer software for body shop scheduling called BodyShop Schedule Pro. For more information on the software, visit www.bodyshopsolutions.com.

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