© 2008 CSC Computer Sciences Limited. All rights reserved. Workshop 2 Supply Chain Management Ensuring effective supply chain management to reduce market fragmentation Andy Jones Associate Partner 09 October 2008
© 2008 CSC Computer Sciences Limited. All rights reserved.
Workshop 2Supply Chain Management
Ensuring effective supply chain management to reduce market fragmentation
Andy Jones
Associate Partner
09 October 2008
© 2008 CSC Computer Sciences Limited. All rights reserved. 2
Workshop - Proposed Agenda
1.Introductions
2.Workshop objectives
3.Supply chain – how effective is it?• Interactive discussion around challenges and issues
4.Supply Chain – potential solutions• Interactive discussion around solutions
5.Greater collaboration – IT consumerisation and social networking software
6.Conclusions and Summary
© 2008 CSC Computer Sciences Limited. All rights reserved. 4
Andy Jones - Introduction
• Over 20 years experience working in general insurance and consulting firms within financial services markets
• Held senior management positions at Royal & SunAlliance, FirstAssist, youatwork Ltd and GHL Insurance Services (Zenith and Link Insurance)
• Operations, IT and Change Management positions
• Worked as a consultant at Impact Plus (now Hitachi Consulting) – independent consulting firm
• Key area of expertise is Operational Transformation – helping companies to ‘operationalise’ their business strategy through defining new operating models, implementing changes and realising benefits
• Joined CSC Financial Services EMEA Consulting Group in April 2008
© 2008 CSC Computer Sciences Limited. All rights reserved. 5
Claims Supply Chain
Questions
• Can a procurement centric focus on the claims supply chain lead to afragmented customer service?
• Will greater collaboration in the claims supply chain help to reduce claimscosts and improve customer service?
• Is the claims supply chain as effective as it could be?
© 2008 CSC Computer Sciences Limited. All rights reserved. 7
Objectives
• To explore the effectiveness of the supply chain
• Why is it not effective as it could be – what are the market drivers?
• Is it fragmented and if so what are the consequences?
• What are the key challenges that everyone is facing?
• What are the potential solutions we should be looking at to improve effectiveness and reduce fragmentation?
• How can we reduce overall claims costs
• How can we improve customer service?
© 2008 CSC Computer Sciences Limited. All rights reserved. 9
Supply Chain - end to end claim process is complex
Salvage Supplier
Vehiclerecovery
CallCentre
FNOL
Claimant
Verification
PolicyCover
Contents
ApprovedRepairer
ApprovedRepairer
Repairer
Assignment
Inspection
Estimate
Reserve
Image
ExpertEstimating
System
Fulfillment
Investigation
ThirdParty
MedicalReport
BodilyInjury
Liability
Negligence
Invoices
Payee
LegalManagement
Witness
Co-insurance
PaymentMechanism
Accounting
Re-insurance
Recovery
Recoveree
GeneralLedger
Reports
ClaimsFinalisation
MIS
PropertyDamage
Driver
Workflow
LossAdjuster
Procurement
Fraud
Materials
Litigation
Statement
DocumentManagement
PrivateMotor
ApprovedSupplier
Negotiation
Catastrophe
Payment
Renewal
CaseManagement
Settlement
Approved Supplier
Approved Supplier
FNOLFNOL
WitnessWitness
AssignmentAssignment
DriverDriver
SupplierSupplier
InspectionInspection
SalvageSalvage
Third Parties
Third Parties
ThirdParty
ThirdParty
SolicitorSolicitor
Medical Report
Medical Report
RecoveryRecovery
ApprovedRepairer
ApprovedRepairer
Claims processClaims processClaims processClaims processEvent Closure
FNOLClaimdetails
Statusenquiry
Offer
Coverageverification
Assessment Negotiation Settlement
Salvage &subrogation
Disputeresolution
Approved Repairer
Approved Repairer
LossAdjustor
LossAdjustor
InsuredInsured
© 2008 CSC Computer Sciences Limited. All rights reserved. 10
Supply Chain - Numerous Third Parties / Multiple Touch Points
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Creating the right balance – administration and indemnity costs
• Administration costs
– handling costs – management, negotiators, clerical
– audit, inspection and loss adjusting fees
Managing the supply chain effectively is essential to creating the right balance
• Indemnity costs
– settlement amounts
– subrogation, salvage and recoveries
Supply Chain Costs
© 2008 CSC Computer Sciences Limited. All rights reserved. 12
Supply Chain – Challenges and Issues
• Outsourcing (delegated authority, third party administrators, on-shore, offshore etc) leads to increased hand-offs and potentially reduces the customer experience
• Referral fees for credit hire, bodily injury claims, repair and replace networks
• Distributors (Brokers and Intermediaries) are often the first point of contact before hand-off to the Insurer
• Procurement centric models can reduce costs at points in the supply chain but is the value provided and customer service optimised?
• Third parties promoting making injury claims and potential litigation
© 2008 CSC Computer Sciences Limited. All rights reserved. 14
Supply Chain – Potential Solutions
• Greater collaboration between parties to change outcomes within the supply chain – reduce cycle times and costs, improve service
• On-line claims enquiry and tracking for the claimant
• Self service claims - on-line tools for the claimant to manage their claim
• On-line delivery of goods and services – using eBay, Amazon, PayPal, for example
• Automation of processes between suppliers to reduce hand-offs and opportunities for inconsistency and mistakes
Is there an opportunity to do what Apple did to the music industry – a game changing approach?
© 2008 CSC Computer Sciences Limited. All rights reserved.
Greater CollaborationIT Consumerisation and
Social Networking Software
© 2008 CSC Computer Sciences Limited. All rights reserved. 16
The origins of IT Consumerisation
Top-down Innovation
1964-2000Top-down Innovation
1964-2000
Bottom-up Innovation
1980-2010Bottom-up Innovation
1980-2010
• Military R&D
• Business Applications
• Consumers and Small Business Usage
Mainframes,Displays, Storage Networks, Software
• Military Applications
• Business Usage
• Consumer R&D
PCs, PDAs, Phones, CDs, Cameras, Video, Semiconductors, Broadband, Wireless, etc
© 2008 CSC Computer Sciences Limited. All rights reserved. 17
9,659,276 Users Online
Consumerisation today
Do your employees have better IT at home than at work?
© 2008 CSC Computer Sciences Limited. All rights reserved. 18
An emerging public infrastructure
Advertising
Used market
E-commerce
Accounting/payroll
Hosting/Software
Support
Collaboration
Voice & mobility
Email & IM – Gmail, Yahoo!
– Wi-Fi, Skype
– Webex, MSN, Google Mashup Editor
– Geek Squad, Best Buy
– Amazon, open source
– Intuit
– Salesforce.com, Employease
– Amazon, PayPal, credit cards
– eBay
– Google, Yahoo!, Microsoft
Public Infrastructure
CRM/HR
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Consumerisation as a bottom-up process
Consumers
Small business
Mid-size
Large
Time
Utility-StylePublic
Infrastructure
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The great transition, 2000-2020?
100%IT
Usage
2000 2020
Private Infrastructure –
One-to-One
PublicInfrastructure --One-to-Many ProprietarySocial Networking
Software
Open
IT Consumerisation has led to a growth in Social Networking Software that can support greater collaboration
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What is Social Networking Software?
Software that helps people find, and collaborate with other people.
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Build social networking software functionality into our business processes
How can we use Social Networking Software?
We want to enable people to find each other...
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....to collaborate with each other, all within the “flow” of their normal tasks.
Benefits – less friction and lower co-ordination costs
How can we use Social Networking Software?
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Example
Contacts an Expert to get guidance and
advice
Potential to reduce • cycle times• claims costs
Progress the claim to the next stage
Claims Negotiator suspects fraud, not sure how to
handle
Future Model?
Current ModelAsk supervisor or creates activity in internal workflow
system
Telephone call, letter or email
Receives advice and makes
decision
Telephone call, letter or email
Potential time delay
Potentially multiple contacts
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Informationand
InformationTechnology
BusinessProcesses
ManagementSystems
Jobs/Skills/Structure
Values andBeliefs
• Clear performance measures and monitoring
• Integrated employee reward and incentives
• Clear performance measures and monitoring
• Integrated employee reward and incentives
• A collaborative way of working
• Customer centric operating model
• A collaborative way of working
• Customer centric operating model
• Redefine processes to reduce cycle times
• Embed the use of social networking software into processes
• Redefine processes to reduce cycle times
• Embed the use of social networking software into processes
• Job role definitions that encourage more collaborative working
• Use of IT ‘social networking’ IT skills in the workplace
• Job role definitions that encourage more collaborative working
• Use of IT ‘social networking’ IT skills in the workplace
• Instant messaging
• Blogs
• Wikis
• Mash-ups etc
• Instant messaging
• Blogs
• Wikis
• Mash-ups etc
What does this mean for the way we currently work?
Need to transform current operating models
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Conclusions
• Collaboration
• Social network software
• Procurement centric models
• Customer service
• On-line claims enquiry and tracking
• Self servicing claims
• Cycle times
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Summary – Workshop objectives
• To explore the effectiveness of the supply chain
• Why is it not effective as it could be – what are the market drivers?
• Is it fragmented and if so what are the consequences?
• What are the key challenges that everyone is facing?
• What are the potential solutions we should be looking at to improve effectiveness and reduce fragmentation?
• How can we reduce overall claims costs
• How can we improve customer service?
Thank You