Following several acquisitions Budget decided it needed an IT system from CDL that would enable it to unite all areas of its business, while allowing it to continue to grow
In January 2004 Budget announced it had signed a deal with CDL to install a wide area network across its 86 branches. Sheer round-the-clock commitment saw the last branches brought onto the network two months ahead of schedule in July 2004.
Now into month six of a fully functioning nationwide infrastructure, Budget reflects on the installation process and the impact the system has had, not least in helping the intermediary prepare for the new Financial Services Authority (FSA) regime.
Discussing the initial decision to invest in overhauling the network's systems, Budget Retail's managing director, Matthew Donaldson, explains: "Budget Retail has continued to grow rapidly, which in part was down to the legacy of numerous acquisitions over the past five years. However, as new books of business were acquired, the IT infrastructure of the company became fragmented, with individual branches operating standalone systems and effectively running as separate businesses.
"The complexity of broking systems, combined with increasing consolidation over recent years, means this is not untypical in the industry. We realised that we needed to move away from this and adopt a uniform platform to build true economies of scale and further growth."
Budget Retail's decision to invest in this model came at a time of intense speculation on the future of high street broking, fuelled by the announcement of Hill House Hammond's closure.
Mr Donaldson says there is still a role for the high street broker: "The Hill House Hammond closure showed not that high street broking was doomed, but that there needs to be a strong business model and clear market strategy. Cost efficiency has to be the key driver in any broking business model and the CDL system gives us this chance."
A specialist in high-volume retail broking solutions, CDL was selected as Budget's partner for the installation. By creating an integrated solution for Budget's retail network, CDL has been able to deliver a number of efficiency and cost savings to the business.
Importantly for Budget as a nationwide operation, having just one system in place meant that changes could be implemented at all branches in a single action, significantly increasing the control and speed to market.
This has been valuable for the introduction of procedures onto the system to help with FSA compliance.
Race for regulation
General manager for CDL, Rick Slater, explains: "In the context of new FSA regulation, the ability to implement consistent procedures and documentation is particularly crucial to brokers.
"Having a centralised system means a far more efficient infrastructure for Budget, and paves the way for further acquisitions with a minimum of disruption to customers as they are transferred onto the system."
The new platform also means a vastly improved management information system for Budget. Mr Donaldson continues: "With one database, we have access to much more accurate information on the volume of business completed, the financial status of each branch, and valuable marketing data to allow us to exploit cross-selling.
"This means we have the ability to pass on more accurate information to insurers and premium finance providers, and simplify training for staff."
For customers, the Budget installation replicates the banking model, delivering a fully automated and centralised system that enables them to deal with any branch across the country and access information on their policies. This is valuable for customers such as taxi drivers who need access to specialist units and, while continuing to contact them directly by phone, can go into their local branch to make payments.
Mr Donaldson maintains that although consumers have been ready to move to direct insurers and the internet, Budget Retail is succeeding in attracting many people back to high street outlets. Firstly, because there are still those who are wary of purchasing over the internet and who would prefer to see the person - and brand - they are buying from, especially if English is not their first language.
Secondly, because insurance is ultimately a price-led market and customers who were ready to move away from the high street for a better quote will just as readily move back to it for the same reason.
For CDL, the completion of the Budget-wide area network - believed to be the most extensive of its kind undertaken by a major high street insurance intermediary - involved working to a relentless timetable.
Race against time
Budget Retail project manager for the installation, Karen Wilkinson, explains: "We needed to be sure that the network would be live with enough time left to introduce new procedures ahead of the new FSA regime. It was a huge logistical challenge because of the number of standalone systems we had inherited through acquisitions. However, CDL provided exceptional support, working hard with our team to deliver the system ahead of schedule and it has gone remarkably smoothly.
"We had made allowances for slippage as the project was rolled out, but in fact this wasn't needed and CDL delivered each phase to the time scales agreed. The speed and efficiency of the CDL team will ensure that we are in a very strong competitive position to continue our acquisitions activity, migrating the business onto the new platform with minimal disruption to business."
The completion of the roll-out has already supported the intermediary's ability to take on a more diverse portfolio of business, such as the recently acquired Initiative 2000 in Rotherham, which with a nationwide niche proposition is being integrated into Budget Retail's new system.
Other recent acquisitions include Castle Insurance in Upminster, which is being transferred to Budget's Dagenham branch, and Suddards Davies and Associates' personal lines business, due to be migrated to Budget branches in Baildon and Brighouse in West Yorkshire.
With Budget's retail operation now combining high street presence with call centre business, online broking and affinity relationships, Mr Donaldson is confident that its future is bright: "Our multi-channel approach, underpinned by powerful internal systems to manage our business, puts us in a very strong position going forward."
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