The Value of Proprietary Technology 26th January 2022The value of anything to a business is the profit it generates. The contribution to the bottom line. But, when it comes to proprietary technology, what is the wider value? Ed Anderson, Software Architect at Probitas shares his opinion.“It might be stating the obvious, but value only comes from technology projects that are actually implemented, used and trusted.As an example, Probitas built its first company-wide, data-warehousing system in 2018. Creating value across the whole business: enhancing the decision-making process, establishing a single source of truth for information and using simple common definitions for key performance indicators.Whilst this project set the standard to which all future technology initiatives are measured, in-house developers at Probitas do much more than traditional data-warehousing.Analogously to ‘low-code’ systems empowering business users, cloud-based orchestrators such as Apache Airflow or Azure Data Factory, combined with serverless infrastructures like AWS Lambda or Azure Function Apps, empower generalist developers to deliver complex integrations and high-performance applications without specialist support.We believe proprietary technology adds the most value when used as an extension of a business intelligence capability:Simple Common Definitions Business Intelligence systems create one set of data definitions across a business. This common set of measures, mean that you’re no longer discussing ‘what is that calculation based on’, and you move towards a more valuable discussion around ‘what does this trend mean’.The more analytics and underwriting systems that use these definitions, the more valuable the definitions are. This is where proprietary technology can contribute. Through developing bespoke web applications and ‘add-ins’, it extends the reach of data-warehouse systems into the whole business.Single Source of Truth Business intelligence systems centralise the analysis of data. By establishing a common data source, you empower data-driven discussions: you’re no longer distracted by data samples that differ from one system to the next and can spend time questioning ‘what is actually behind this data’ and ‘how is it reflected in the trends on display’.Proprietary technology can help get more information into the hands of underwriters at the time decisions are being made. It enables deeper integrations between management information and pricing/underwriting systems, without sacrificing performance.More Relevant Data By connecting to various source systems, business intelligence systems import a wide breadth of data without sacrificing granularity. Decision-makers are not restricted to a limited subset of data fields and can access a level of detail best suited to their needs.Put simply, the more data in the system the more useful it is. Extending your data collection system, through serving external partners with bespoke web applications, is one powerful way to use proprietary technology.Enhancing the Decision Making Process Ultimately the value of technology is the profit it helps generate. In today’s world, it’s much harder to predict what’s coming down the line. You ideally want the ability to grow significantly whilst the going is good but equally, shrink to protect profit margins in softer markets.With in-house technology, you’re essentially building flexibility into your cost base. Whilst there may be some expense load for an internal developer, for many insurance applications it’s significantly lower than the corresponding software licensing fee. Once you have your technology in place, you can have zero fixed costs. You’re not locking yourself into an expense model that might not suit your business in the future.The utopia is to be modular: to have the ability to mix off-the-shelf solutions with propriety technology. Having the necessary skills to do this, takes discipline and patience to develop. Something we aim to achieve through our ongoing commitment to technology at Probitas.