Case study 4

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Modernization of NTUC Income

Q1: What were the problems faced by Income in this case? How were the problems resolved by the new digital system?

Answer:
Income was facing a few problems:

Time: Income takes longer time to process their insurance because it is very tedious and paper-based. It normally takes them more days and time to finish a certain request for insurance.
As well, the HP3000 mainframe used by Income always experience breakdown, the back-up system only allowed restoration to the previous day’s back-up data, if the daily data back-up was not completed, the data will be lost and it takes time to recover. At the end it will affect the work progress.

Money: Income needs to always invest and upgrade HP3000 mainframe that frequently breaks down and it might be costly.

Space: Due to the company is paper-based, there are tons of paper need to be stored and it occupying 3 warehouses.

Real-time information: Income lost opportunities to cross-sell because transaction processing for the policy underwriting was still a batch process and the information is not available to the insurance agents in real-time. The agent was unable to check whether the applicant was an existing customer of Income.

Income’s main problems were solved in year 2003 when they switched to Java based eBao LifeSystem invented by eBao Technology. The software comprised 3 subsystems, which are Policy Administration, Sales Management and Supplementary Resources. The paper-based insurance processes were replaced by the paperless platform. By using the eBao technology, all of the documents are being scanned and stored in the trusted storage. Frequent breakdowns were solved by the high-availability platform. The new eBao technology also addressed the downtime caused by breakdowns with the hot back-up disaster-recovery centers.

Q2: What types of information systems and business processes were used by Income before migrating to the fully digital system?

Answer:
Before migrating to the fully digital system, Income was using the HP3000 mainframe that hosted the core insurance applications, for instances their accounting and management information systems. However, this mainframe is unreliable due to frequent breakdowns and it resulted downtime and decreased productivity. They were also using the COBOL program that was developed in the early 1980s but it was very slow in developing new products for the company resulting lost sale opportunities. Income does all the work manually and paper intensive, from the agent submitting the forms to branches manually or by courier, the office services will then sort them for underwriting; proposals were allocated to staff randomly; the storage is being done by sorting all the documents and gather it in cartons and stored in the 3 warehouses and since there is no proper document management system, retrieval of documents take days to complete. As well, policy writing is in batch process and information was not available to the insurance agents where they need the real-time information and this caused them to lose the opportunity to cross-sell.

Q3: Describe the Information systems and IT infrastructure at Income after migrating to the fully digital system.

Answer:
The CIO of Income, James Kang stated that, using the Java based eBao LifeSystem from eBao Technology is very customer-centric. The software comprises of 3 subsystems, which are policy administration, sales management and supplementary resources. The new system was operated with high quality platform and with multiple servers and communication lines. All applications resided on 2 or more servers where each connected by 2 or more communications line which were load-balanced. The entire IT infratrusture is replaced with more robust and scalable architecture.

It contains a product definition module that supports new products, new channel and changes in business process. According to the CEO Tan Kin Lian, the new system has the best straight through processing workflow and it is very flexible, it cuts the new product launch time from months to days. And it helps them to save a lot of time and cost. As well, the new system save the company and provided them with the company’s disaster recovery plan. A real-time hot back-up disaster recovery center was implemented and it was super useful for the company. The new system helped the company to bring their business processes from paper-based to paperless through digital storage and records. Many users can access to the system at one time and anytime anywhere. The insurance agents can access to the information real-time and help them to gain their cross-sell opportunity.

Q4: What benefits did Income reap from the new system?

Answer:
There are few benefits by using the new system:

1. For the staff who working outside of the office and need to telecommunicate, it enabled them to gain faster access to the information, as fast as those staff working within in the office.
2. Enable the insurance agent to gain the opportunities to cross-sell because it allows them to access to the real-time information so that the agents know whether the customer is the existing one.
3. The new system cuts the new product launch time from months to days because it has the best straight through processing workflow and it is very flexible.
4. All documents are being scanned and stored in the trusted storage device, it helps the company to eliminate the overload uses of paper and they can access to the information easily.
5. Minimizing downtime occurance due to the hardware or operating system failures.

Q5: How well is Income prepared for the future? Are the problems described in the case like to be repeated?

Answer:
To survive in the insurance industry, information system is very important in ensuring the product and services quality and competitiveness. Products should be constantly improved and new designs should be always invented. As well, customer queries should be handled accurately and promptly. With the new information system, Income is now equipped to face the challenges and obstacles of the industry/ the new system helps Income to enhance their performance and giving them competitive advantage to survive in the industry.

To ensure that the company is keep improving and not returning to the old bad times, proper implementation and control should be done well. Continuous training should be given to the staff to ensure the proper use of the system and to use it in the best way to maximize its potential. Besides, the system should be continuously improved through the proper management of feedback from the users as they are the one who using and understand the problem. System upgrades should also be done periodically to ensure that it copes with the changes of the industry and the market. 

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