CASE STUDY: Modernization of NTUC Income?

1) What were the problems faced by Income in this case? How were the problems solved by
thenew digital system?
Incomes insurance processes were very tedious and paper-based. This resulted to
humongousIncome also experienced frequent breakdown of the HP 3000 mainframe which
hosted the coreinsurance applications and the accounting and management information
systems. In addition tothis, HP 3000 back-up system only allowed restoration to the previous
days back-up data.Hardware failures caused six days of complete downtime. COBOL
programs also encounteredfrequent breakdowns that halted the systems and caused temporary
interruptions. At the sametime, development of new products using the COBOL is quite
cumbersome and took weeks, evenmonths, to accomplish. They also lost opportunities to
cross-sell because transaction processingfor policy underwriting was still a batch process and
information is not available to agents andadvisors 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, alldocuments are scanned and stored on trusted
storage devices. Frequent breakdowns wereaddressed by the high-availability platform. Multiple
servers are hosted and connected to morecommunication lines that are load balanced. The
new system also addressed downtimes dueto breakdowns by its hot back-up disaster-recovery
centers. The new digital system alsoaddressed 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
migratingto the fully digital system?
The insurance process of Income was very manual and paper/file intensive. Filled-up
applicationforms of clients were sent by agents through courier. Their collection schedule
causes delays oftwo to three days. The Office Services log, sort, and send documents to
underwriting. Proposalswere 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 toaccomplish. Income also made use of HP 3000
mainframes which were very unreliable due tofrequent breakdowns that resulted to
downtime, decreased productivity and wasted manpower hours. COBOL programs were also
used which also encountered technical failures. At the sametime, COBOL programs were
very slow in developing new products for the company resulting tolost sale opportunities.
3) Describe the Information systems and IT infrastructure at Income after migrating to the fully
digitalsystem.
According to James Kang, CIO of Income, the Java based eBao LifeSystem from
eBaoTechnology is very customer-centric. It provided seamless integration with imaging and
bar codetechnology. It also contains a product definition module that supports new products,
newchannels and changes in business process. Data migration of Incomes individual and
groupbusinesses was successfully implemented and customized. The new system was
operational onhigh-quality platform with multiple servers and communication lines. The new
system alsorevamped business continuity and the companys disaster recovery plan. A real-
time hot back-updisaster 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
withthe use of two or more servers connected by two or more communication lines. Income
alsoreduced and eventually eliminated the use of paper. Under the new system, all documents
werescanned and stored on trusted storage devices secured, reliable digital vaults that
enabledstrict compliance with stringent statutory requirements. Staff members also enjoyed
faster accessto information. With the use of the straight through processing workflow
capabilities of the newsystem, Income saved as much as 50 percent on time and costs in
processing policies. Time indesigning 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 berepeated?
In the insurance industry, information systems are very important in ensuring product and
servicescompetitiveness. Customer queries should be addressed accurately and promptly.
Productsshould be constantly improved and new designs should always be made available.
With the newinformation system, Income is now equipped to face the challenges of the
industry. To ensure thesuccess of the new system, proper implementation and control should
be done. Continuoustraining should be given to the staff to ensure proper use of the system
and to maximize thepotential 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 withthe changes in the demand of the industry and the market.