case study : Modernization of NTUC Income

Modernization of NTUC Income

1. What were the problems faced by Income in this case? How were the problems solved by the new digital system?

Incomes insurance processes were very tedious and paper-based. This resulted to humongous Income also experienced frequent breakdown of the HP 3000 mainframe which hosted the core insurance applications and the accounting and management information systems. In addition to this, HP 3000 back-up system only allowed restoration to the previous day’s back-up data. Hardware failures caused six days of complete downtime. COBOL programs also encountered frequent breakdowns that halted the systems and caused temporary interruptions. At the same time, development of new products using the COBOL is quite cumbersome and took weeks, even months, to accomplish. They also lost opportunities to cross-sell because transaction processing for policy underwriting was still a batch process and information is not available to agents and advisers in real-time. Through the new digital systems, these problems were addressed. The paper-based insurance processes were replaced by a paperless platform. Under the new system, all documents are scanned and stored on ´trustedµ storage devices. Frequent breakdowns were addressed by the high-availability platform. Multiple servers are hosted and connected to more communication lines that are ´load balancedµ. The new system also addressed downtime due to breakdowns by its hot back-up disaster-recovery centers. The new digital system also addressed the slow development of new products by COBOL through the straight through processing workflow capabilities of the new system.

2. What types of information systems and business processes were used by Income before migrating to the fully digital system?

The insurance process of Income was very manual and paper/file intensive. Filled-up application forms of clients were sent by agents through courier. Their collection schedule causes delays of two to three days. The Office Services log, sort, and send documents to underwriting. Proposals were allocated to staff randomly. No system was in place for proper assignment of tasks per staff. Voluminous documents are manually sorted and stored by a number of staff at their warehouse. Since there was no clear document management system, retrieval of documents take days to accomplish. Income also made use of HP 3000 mainframes which were very unreliable due to frequent breakdowns that resulted to downtime, decreased productivity and wasted manpower hours. COBOL programs were also used which also encountered technical failures. At the same time, COBOL programs were very slow in developing new products for the company resulting to lost sale opportunities.

3.Describe the Information systems and IT infrastructure at Income after migrating to the fully digital system?

According to James Kang, CIO of Income, the Java based eBao Life System from eBao Technology is very customer-centric. It provided seamless integration with imaging and bar code technology. It also contains a product definition module that supports new products, new channels and changes in business process. Data migration of Income’s individual and group businesses was successfully implemented and customized. The new system was operational on high-quality platform with multiple servers and communication lines. The new system also revamped business continuity and the company’s disaster recovery plan. A real-time hot back-up disaster recovery center was implemented. Business processes went from paper intensive to paperless through digital storage and records. Many users can access the system at one time, any time, and anywhere.

4. What benefits did Income reap from the new system?

The robust architecture of the servers minimized downtime occurrence. This is made possible with the use of two or more servers connected by two or more communication lines. Income also reduced and eventually eliminated the use of paper. Under the new system, all documents we rescanned and stored on ´trustedµ storage devices ² secured, reliable digital vaults that enabled strict compliance with stringent statutory requirements. Staff members also enjoyed faster access to information. With the use of the straight through processing workflow capabilities of the new system, Income saved as much as 50 percent on time and costs in processing policies. Time in designing and launching new products were also reduced from weeks to days using the table-driven-rule-based product-definition module.

5  .How well is Income prepared for the future? Are the problems described in the case likely to be repeated?

In the insurance industry, information systems are very important in ensuring product and services-competitiveness. Customer queries should be addressed accurately and promptly. Products should be constantly improved and new designs should always be made available. With the new information system, Income is now equipped to face the challenges of the industry. To ensure the success of the new system, proper implementation and control should be done. Continuous straining should be given to the staff to ensure proper use of the system and to maximize the potential of the system. The system should also be continuously improved through the proper management of feedback from users. Upgrades should also be done periodically to cope with the changes in the demand of the industry and the market.

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