DaTo Solutions is following the old adage of high risk, high return. The Johannesburg company has just completed an annuity-based application service provision (ASP) solution for insurer and re-insurer Baronscourt SA.
Designed and hosted by DaTo, the ASP model takes care of Baronscourt`s back-end administration functions, including the banking component and the debit order runs.
The solution, which was built over a six-month period, was completed with no financial outlay from Baronscourt. Instead, DaTo opted for an annuity agreement, with Baronscourt paying DaTo a portion of all new business written onto the system.
However, DaTo MD David Goodyer says the company is not without revenue protection.
"Obviously we have guarantees in place. At this stage, we don`t have the cash on hand to carry the development financing indefinitely. Baronscourt has guaranteed a base-line figure of new sign-ups."
The company`s ASP approach is in the form of leasing rather than buying. DaTo wants to be seen as a part of its customer`s business and thus takes an annuity-based income. "This serves to illustrate our confidence in our systems and ensures our long-term accountability," says Goodyer.
The Web-enabled application takes care of what was previously a manually-driven administration system.
"The new system will facilitate a reduction in back-office staff and will benefit both Baronscourt and its brokers by simplifying administration and providing not just data, but real, meaningful information. It also means that the duplication of effort is taken out of the system - right at the broker level," says James Matcher, DaTo financial director.
The company is also working with a US partner based on the West Coast in order to enter the US market with Web architecture that DaTo has developed.
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