Business Process Reengineering

PGP II (2010-12)

CIGNA Property and Casualty Reengineering (A)

Group 3
Chandra Mohan | Gurpreet Singh Bhalla | Kapil Dhaka | Shashikant Kewale | Vishal Nema

Overview- Cigna P&C

A division with employee strength of 6500 and revenues of $4 billion Principal factors in P&C products were Pricing, quality of underwriting, policyholder services, operating efficiencies, and product differentiation and availability Underwriting- Process of classifying, rating, and transferring solicited risk prior to issuing a policy Combined ratio = Loss ratio + Expense ratio IT was used since 1960 and a budget of $85 m was allocated to IT in 1993-94

Gerry Isom's Vision

Vision: To be one of the top-performing specialist property and casualty companies in the industry
Focus was to be placed on profitability instead of revenues Expand performance evaluation from strictly financial measures to include marketing, HR, underwriting, claims and producer relations Introduce significant structural changes in order to identify the problems and focus on the solution

Reengineering Initiative
Transformation and Reengineering initiatives were carried out in as follows
Significant structural change- divided P&C into 3 new divisions and further into 18 business units Formed a new executive team- Presidents Executive Counsil In discussion with Valerio, head of Transformation, came up with reengineering plan
Renaissance was to contribute by its IT approach and its Balanced Scorecard methodology Gemini was to do a thorough analysis and help in implementing Business Process Redesign

Reengineering approach - Uniqueness & Innovation

Mapping and Analysis of As-Is Process
In depth interviews of more than 100 employees Disconnects and processes to be re-engineered identified

Formation of cross sectional teams of best performers to design and implement the processes Incremental adaptation and sharing of knowledge from different businesses minimizing cost and risk Emphasis on what the company wants to be and not on the technical feasability of the processes Transforming the company's IT way of thinking through in sourcing Dissemination of unstructured information through Knowledge Management System

Role of Client-Server architecture

Different kind of knowledge workers required specific support by IT, for which client/server approach was the best choice Client/ server architecture permitted data to be managed as a common source and to be accessed by a variety of application according to their particular requirement Shared data resource could be tailored to the information needs of individual workers by customizing their applications This system provided three types of resources to support a workers decision making:
a) b) c) Information necessary to drive solutions Communication infrastructure to make information accessible Application to transform information into worker knowledge

Dealing with Legacy Systems

CIGNA P&C was intense user of IT and most of the IT budget was allocated to legacy systems Renaissance strategy in reengineering was to take workers beyond mere access to traditional structured information found in mainframes
Learning and Knowledge core processes building needed to be integrated in each of redesigned process

Legacy systems were assessed and integrated in design on the basis of effectiveness and support to client desktops Desktop interface was designed specifically to match cognitive model of decision making process P&C's objective was to new use of networks focused on people and on enhancing communication

Dealing with Legacy Systems

Impact on Legacy Systems
Did not eliminate all legacy systems Elimination paced by incremental substitution of new substitute systems Analyzed to adapt relevant appllications to new requirements Library of reusable software components was created to reduce code duplication Refrained from excessive investment Upgrade was preferred to replacement IS team opted to use a set of common components when creating various desktops Core features of desktop retained although configuration changed

Importance of Balanced Scorecard in the Architecture Design

Importance of Balanced Scorecard to Tier-1
Sets measures for achieving individual targets Provides continuous feedback, thus identifying key concern areas and their resolution mechanisms

Importance of Balanced Scorecard to Tier-2

Links the effectiveness of individual performances to organizational progress Helped in conceptualizing various cause-and-effect relationships in business processes Helped the knowledge workers to identify areas where competencies need to be upgraded

Once integrated into the system, it provided companys current standing as compared to the management vision

Thank you!