Ntuc Case

Case Overview:

NTUC income (Income) is one of Singapore’s largest insurers. This case was about the modernization of NTUC Income between 2002 and 2003. In those few years, Income had carried out two strategies about upgrade of its IT technology.

At first, Income upgraded the HP 3000 mainframe. Although this system can input the papers into the data base, there still had a lot of problems.

After Income change the Java based eBao LifeSystem, it resolved a lot of problems. We analyze the Modernization of NTUC Income and what have really happened in the case.

Organizational Context:

NTUC Income is an insurance company offering life, health, general insurance and investment-linked products to policy holders, especially Singapore citizens.

Income’s structure used was the normal hierarchy structure before upgrading their technology.

•   Customers filled in forms and submit documents.
•   Agents submitted the forms at branches.
•   Couriers sent the forms to the Office Services department Office Services department log and sort the documents, and sent them to departments for underwriting.
•   Proposals were randomly allocated to underwrite staff.
•   Accepted proposals were sent for printing at the Computer Services department and then redistributed.

The processes were very tedious and paper-based. Therefore, Income upgraded their technology.

•   In 2002, Income upgraded the HP 3000 mainframe that hosted the core insurance applications, the accounting and management information systems.
•   In June 2003, Income switched to the Java based eBao LifeSystem, which is comprised three subsystems – Policy Administration, Sales Management and Supplementary Resources, from eBao Technology.

Focal Systems and Main Problems:

A few years before 2002:

Overview

• NTUC Income did not have a good information technology.
• Business process was carried out totally by the employees.
• For example, the forms and documents were transported by an agent and then the couriers to the Office Services department but not the Internet.
• The input of documents was also manual.

Causal factor:

•   Almost every business process was carried out manually.

Problems:

•   This causal factor wastes much time that increased the cost of Income. For a      profit-making organization time is money. More employees were involved in the business process also increased the cost of Income.

In 2002:

Overview

•  There were investments to upgrade the HP 3000 mainframe regularly.
•  However, the system frequently broke down.
•  Then either data reconciliation or backup was chosen.
•  The restoration of the HP 3000 backup system only worked up to the previous day’s backup data.
•  The daily backup process needed to be done or otherwise the affected day’s data would be lost.
•  The COBOL programs developed in the early 1980s also broke several times that would cause temporary interruptions of the systems.
•  Transaction process was tedious and the transmission of the information was not in real-time.
•  The connection between the HP 3000 and the advisors or agents for telecommunication was really bad.

Causal factor:

• Frequent breakdown of the system led to several days to recover the system and information.
• Poor hardware devices.

Problem:

• The cost coming from one breakdown of the system was very large.
• Bad telecommunication was a problem too.

In June 2003: