From the ground up: three insurers share the importance of project management and the critical steps they took to complete their technology-driven projects successfully.
Project management is the process of defining and achieving goals while optimizing the use of resources, such as people, time and money, during the course of a project. While the steps in the process often differ among projects, the insurers shared a few common endeavors along the way.
In the Beginning
Identifying a need is usually a first step in the creation of a project.
For Jackson National Life Insurance Co., the need to create greater efficiency for its representatives went hand-in-hand with its efforts to create a more paperless environment. Several years ago, the company reduced its use of paper by developing an electronic business submission system designed to improve efficiency and keep representatives in compliance with various regulations. But the process didn't stop there, said Robert Dearman, assistant vice president, broker/dealer systems. He and his team realized that creating an electronic signature tool would also help drive greater efficiency and create a smoother transaction process.
Improved efficiency was also the impetus behind Royal & SunAlliance's development of a technology platform for its broker channel. Prior to the platform, brokers initiated policy transactions, recorded details and sent the transactions to the company for staff to key into the policy management system. But the company realized it would be more efficient if brokers could process transactions directly, driving increased customer service and greater efficiencies in the intermediated distribution system. Technology also was needed to help brokers compete with the evolution of direct writers, said Shawn DeSantis, vice president of personal insurance. Those needs led to a five-year $10 million development of the company's Web-Business Transactional Tool.
Identifying a need, however, doesn't always happen immediately. For Guaranty Income Life, the need for a system to track death benefits claims wasn't new, but didn't become evident until not having such a system in place began impacting the company's bottom line. The company's marketing, actuarial and accounting departments heavily relied on claims data to generate reports. "But they were constantly at odds because they believed they were using different numbers," said Marion Robinson, vice president of information systems. "Rather than using different numbers, they were using different aspects of the data, which was not readily apparent" In addition, she said manual input of claims raised a red flag to potential errors. The answer? The company decided to create a centralized system in which the departments could pull historical death claims data and trends as well as analyses by actuaries, accountants and management to measure the future value of each block. The goal was to increase both accuracy and integrity.
Other Steps Along the Way
Time is critical. For Guaranty Income Life, establishing and adhering to a clear-cut deadline was essential to the company's success in developing its claims tracking system. Robinson established a six-month deadline for the project's development and set her sights on meeting the 2005 E-Fusion Award entry deadline. "It's important to set a definite deadline that can't be altered without a lot of heartache or explanation," she said.
Getting everyone involved in the project on board is also essential. For Robinson and her team that meant getting companywide buy-in--everyone from senior management to front-line workers. "They needed to be convinced from their own perspective of the usefulness of how the project will benefit them. That support is important because IT can't do it alone." It's important, she said, that someone in the company be identified as the project owner. "IT doesn't own the project but instead is responsible for creating it for them, and the owner needs to be ultimately responsible for the outcome." She said sometimes establishing ownership is met with resistance.
Information gathering is another key step in project management. Guaranty Income Life undertook what Robinson calls the discovery process. "It's critical because years of manual processing was stored in senior processors' brains and not well documented. We had to discover enough about the entire process ourselves to automate it." For instance, she said, the senior project developer had to have complete understanding of the claims processing.
All About the People
"The No. 1 priority is making sure you have the right people on the project," said Jackson National's Dearman. "Everyone with a stake in the project must be actively engaged and empowered to make decisions, along with having the time and commitment to be engaged at a detailed level"
End-users are also important to the process, and their feedback is a vital ingredient in project management's success. Over three years, Royal & Sun Alliance's WebBusiness team solicited feedback via focus groups, surveys and personal conversations with brokers about enhancement priorities and training needs. "Delivering user-driven enhancements produced strong, positive reactions from brokers who were used to having solutions thrown at them and getting no subsequent enhancements, improvements or support," said Keith Martin, leader of personal insurance for the company's WebBusiness team.
Ready, Set, Execute
Dell President and Chief Executive Officer Kevin Rollins once said: "The weakness in the company is if we fail to execute" Insurers agree, saying smooth execution is a critical component of successful project management.
Execution of Jackson National's eSignature tool was broken into several iterations. "Every month, on average, we gave quality assurance and business owners a subset of overall functionality, and we had them start testing it. We had four different iterations, each encompassing about 25% of the overall functionality, and by the end of the last iteration, we had the final product," said Dearman. Each week during construction, the company revisited its original high-level estimate to see if it was on track and within budget. The company finished 20% below its original high-level estimate, a result of constant end-user communication, he said.
Training is an important precursor to successful execution. Royal & SunAlliance's brokers received two days of training on its WebBusiness Transactional Tool. The company also offers online learning tools and a contact center staffed with dedicated experts knowledgeable in both underwriting and the use of the transactional tool to answer questions and walk users through the process.
For Guaranty Income Life, the final phase prior to execution of its claims tracking system involved final clean up and migration of data. The new process combines several systems, including a legacy administration system and DOS-based reports. "There were years of data, and we had to come up with comparison utilities to assist the claims department in cleaning up the old data that may have been input incorrectly," said Robinson.
Once project management is complete, the payoffs begin to get noticed.
Royal & SunAlliance's WebBusiness has met the need for creating greater efficiency for the company's brokers. More than 630 brokers across the country now use WebBusiness, and those brokers represent more than 95% of the company's existing policies. More than 85% of policy transactions that are Web processable now are done via the system.
For Guaranty Income Life, one of the payoffs of its new claims tracking system is reduced time in processing claims. With its old claims system, processing a typical life policy claim used to take an average of two hours. Now, the job can be completed in less than 40 minutes. In addition, turnaround times for claims have significantly improved with a one-to-three-week faster turnaround for the entire claims process. Time is money, and Robinson estimates a savings of more than $100,000 a year in charges from auditors and actuaries who use the data gleaned from the claims tracking reports.
More than 2,000 of Jackson National's reps are already finding value in its eSignature tool. "Retail vendors paved the way for us, and the legislation around e-signatures is becoming clearer. UETA [Uniform Electronic Transaction Act] and ESIGN [Electronic Signatures in Global and National Commerce Act] are cornerstones of how the solution works. Our solution is capable of measuring speed, cadence, slant and pressure with a great deal of sensitivity," Dearman said. The end results are reaping big rewards. "We are realizing and exceeding productivity gains we hoped to achieve" he said.
Guaranty Income Life Insurance Co.
A.M. Best Company # 06504
Distribution: Independent agents, national marketing organizations
Jackson National Life Insurance Co.
A.M. Best Company # 06596
Distribution: Independent agents, brokers, banks Royal & SunAlliance
A.M. Best Company # 85662
For ratings and other financial strength information about these companies, visit www.ambest.com.
* Project management is usually a sequential process, often including such steps as initiation, planning, execution, monitoring and completion.
* Allocating time and resources, getting management buy-in and creating a team of the right people are keys to successful project management.
* Between 85% and 90% of projects fail to deliver on time, on budget and to the quality of performance expected, according to research by HCi.
How It's Done: Steps to Project Management
Guaranty Income Life Insurance Co.
Project: Claim Tracking System
Project management steps:
1. Identified need.
2. Prioritized project and set target completion date.
3. Obtained management and user buy-in.
4. Gathered information.
5. Created and finalized system design through many stages, such as design and coding, testing by Information Services and end users, feed back and code changes.
6. Performed final clean up and migration of data from old system.
7. Monitored system during two weeks of parallel processing.
8. Made necessary final adjustments according to user input.
9. Retired old system.
Jackson National Life Insurance Co.
Project management steps:
1. Devised technology road map/identified need.
2. Obtained management and end-user buy-in.
3. Solicited end-user feedback; engaged key stakeholders with end users.
4. Conducted estimations and technical design.
5. Revised prototypes per representatives' feedback.
6. Trained representatives on eSignature tool.
7. Rolled out several iterations of the tool.
Royal & SunAlliance
Project: WebBusiness Transactional Tool
Project management steps:
1. Established vision and identified need.
2. Solicited feedback from brokers.
3. Designed tool.
4. Got business, IT and end users on the same page.
5. Conducted training for brokers, along with offering online training tools and contact center.
6. Final roll out.
7. Ongoing improvements and fine-tuning based on continuous user feedback.
Sometimes project management hits a few bumps in the road. Research by HCi found that 85% to 90% of projects fail to deliver on time, on budget and to the quality of performance expected. In addition, information technology projects may face some tougher challenges. According to a review of studies by IT Cortex--a network of freelance consultants--IT projects are more likely to fail than succeed and the larger the project, the more likely it is to fail.
There are some steps companies should take to avoid failure in developing a project. In an article posted on gantthead.com, an online community for IT project managers, author Frank Winters listed the top 10 reasons projects fail. They include inadequately trained and/or inexperienced project managers; failure to set and manage expectations; poor leadership at any and all levels; failure to adequately identify, document and track requirements; poor plans and planning processes; poor effort estimation; cultural and ethical misalignment; misalignment between the project team and the business or other organizations it serves; inadequate or misused methods; and inadequate communication, including progress tracking and reporting.
Keeping the lines of communication open is critical to successful project management. "We are not dependent on fancy project management tools, but rather we use a lot of communication and targeting to get the job done," said Marion Robinson, vice president of information systems for Guaranty Income Life Insurance Co. "We set goals and do whatever it takes to meet those goals. And if we identify a problem, we gather together as a team to determine a solution."
During Guaranty Life's recent project to establish a claim tracking system, Robinson and her team constantly communicated with all departments within the company. "If there was any unexpected delay, we would often catch that early because of the communication openness. Communication, communication, communication--that's how all my successes have begun," she said.
Having a central element is also key. For Guaranty income Life, that element was data. "Our project would have been a complete failure no matter how well the software worked or how easy it was for users if we hadn't made sure management got the data they needed" said Robinson.
For Royal & SunAlliance, it was important in the project management stage that the company didn't attempt in the first delivery to have the final solution, said Shawn DeSantis, vice president of personal insurance. "We maintained focus on the long-term vision, initially delivering a solution that over time we could enhance and fine tune. That allowed us to have an iterative approach that built on real user feedback and experience."