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The Boat Insurance Case Study




Business Process Change;The Boat Insurance Case Study;Business Process Change, 3rd Ed. Case Study;This case study contains 6 reading sections and 9 questions. Please read each;reading section and post your answers to the questions under the file exchange;section of your individual boards.;1;Business Process Change;The Boat Insurance Case Study;The Boat Insurance Case Study;Reading 1. BPT Insurance;BPT Insurance has been in business for a number of years. The company has, in the past;sold life, home and auto insurance. Their clients are middle class professionals in the;state of Ohio. The company recently decided to add a new line insurance for motor and;sail boats.;Assume that the insurance company headquarters is in Cleveland, Ohio. They define the;product, market the insurance, have underwriters to approve policies, and use IT;applications to manage monthly billings and other financial tasks. The company has an;investment department that invests the income from policies to earn income that is then;used to pay for damage or replacements when necessary. The company depends on local;independent agents to actually sell the insurance, and they subsequently meet with;customers and document any claims that are made. The agents operate out of their homes;and link to the company headquarters via a company website. The agents all report to a;sales and support manager who is located in Cleveland.;Figure 1 provides a high-level organization diagram of BPT Insurance of Ohio. In;essence Boat Insurance Policy Planning functions as new product development.;Underwriting is a core operational activity, but is kept separate as a control on the overenthusiastic acceptance of new policies.;Figure 1. BPT Insurance of Ohio: Organization Chart;2;Business Process Change;The Boat Insurance Case Study;Question 1 (One Point);Since the process is new, a team was assembled to assure that the new process was;designed in an efficient and effective manner. Their first job was to define the process;they were going to focus on. They began with a single process box to name the highlevel process and to define the key inputs and outputs of the process. Sketch a basic;process diagram for this new process.;3;Business Process Change;The Boat Insurance Case Study;Reading 2. Understanding the Project - 1;The second thing the process design team focused on was the development of a;stakeholder diagram that would define the major stakeholders in the Provide & Sell Boat;Insurance process. Imagine a series of interviews with managers and perspective;customers. At some point, the process design team would branch out and consider the;interests of employees and field agents and groups like the Investment Department and IT;support, and the Government Agencies that regulate Insurance in Ohio. In each case, the;team would make notes on how the various stakeholders will likely interact with the new;insurance process.;Question 2-A (Two Points);Prepare a Stakeholder Diagram for Provide and Sell Boat Insurance.;Question 2-B. Understanding the Project 2 (Two Points);Now that the process team has a good idea of who cares about the Provide and Sell Boat;Insurance, they are in a position to work up a tentative list of the measures that the;process redesign team (and management) can use to determine if the process is working;well or not. In the real world, you would get this information from interviews with the;various stakeholders. In this case, we will just ask you to imagine yourself in each of the;stakeholder roles, and then to write down what you would be concerned about.;Prepare a table with the following information;The Stakeholder;4;What the Stakeholder;Cares About;How the Team Could;Measure Success;Business Process Change;The Boat Insurance Case Study;Reading 3;As a result of interviews with various stakeholders, the process redesign team discovered;that there were a number of problems. For example, although most policy holders;(customers) were happy with their agents, policies, and the way claims were handled, a;few thought claims payment was unnecessarily long. The management team explained;that, as the company relied on field sales agents to review and approve claims, and then;had an in-house adjustor review the photos and paperwork the agent send in, that it was;often a lengthy process. Some argued that the company should separate the agents, who;sold the policies, from the claims adjustors who checked on claims, but others argued that;they would cost too much, requiring a staff of field adjustors. Field Agents felt strongly;that they should maintain the interface to the customer. Others argued that it could be;simplified if they simply let clients send in digital photos, and only asked agents to check;when there was significant doubt.;Some agents complained about the computer interface they used to interface with the;sales manager and to input information about new policies and asked that it be improved.;Similarly, some clerks complained that it was often difficult to get information on older;policies from the database and asked that their computer-database interface be improved.;Senior management has complained that the managers of the Provide & Sell Boat;Insurance line do not submit their plans and budgets on time and have asked the local;manager to submit earlier. Similarly, government insurance regulators have complained;that the local management team sometimes submits financial data late and on the wrong;forms.;Question 3 (Two Points);Using this information, and other information you have about stakeholders, develop a;Scope Diagram that shows the Provide & Sell Boat Insurance process and highlights the;products or activities that might be improved.;Highlight events or artifacts that seem to be problematic. Draw a bold line to indicate the;final scope of the project.;5;Business Process Change;The Boat Insurance Case Study;Reading 4. Phase 2, Analyze the Business Process;There are several problems facing the process team that wants to improve the Provide;Sell Boat Insurance process. Lets start and see if we can figure out how the sales;process actually works. Here are the notes the process analysts made as they talked to;both the sales manager and several field sales agents in a group session.;The key thing to understand, according to the sales manager, is that sales agents are;independent salespeople. They have a license or contract with BPT Insurance to sell Boat;Insurance. They take a course put on by BPT Insurance on the features of the BPT Boat;Insurance policies, and on how to submit policy information and claims. The course is;built around the BPT Boat Insurance Application that is available online. The application;runs on a server at the BPT Insurance IT department and passes information back and;forth between the BPT Boat Insurance group, including the sales manager, and the field;sales agents. The application supports sales planning and reporting, policy entry, the;entry of changes, the filing of claims, and policy data access.;A field sales agent explained that the easiest way to understand the arrangement was;simply to follow a typical sale. The field agent has a target for each month. Fees and;bonuses are based on achieving targets and going over target. An agent meets with a;prospect and sells the policy. Most agents work with boat stores and marinas in their area;to get prospect leads. In some cases, boat store owners are, themselves, agents. Once a;prospect agrees to buy and writes an initial check, the agent goes online and submits all;the information, via their computer. The registration clerk at the Boat Insurance group at;BPT Insurance checks each policy submittal, requests any missing information, deposits;the check, and proceeds to set up a billing program for the customer. The company bills;either once a year or quarterly, as the policy holder prefers. If any customer information;changes, the customer can either write the information on the payment form, which is;processed at the insurance company, or notify the agent, who then submits a change;request via computer. If anything happens to a boat that is insured, the policy holder;notifies the agent, who comes out, verifies the damage, takes photos, and then sends a;report and scanned photos to BPT Insurance. A claims agent at the Boat Insurance group;reviews all claims and determines the payment due. If there are disagreements, they can;be adjudicated by the policy holder, the agent and the senior claims adjustor, according to;the rules established by the policy. Once a claim settlement is agreed upon, a check is cut;and mailed by the insurance company. Eventually, when the boat is sold, or the policy;holder decides to change the policy, the agent files a policy cancelation notice via;computer and the Boat Insurance group registration clerk sets the policy to inactive.;Try working up a rough draft of a BPMN diagram that describes the process flow from a;customer agreeing to buy Boat insurance to cancelation. To keep things consistent, lets;agree that there are two customers, the policy holder, and the insurance agent, and both;interface with the BPT Insurance Boat Insurance process. Treat the IT application as a;swimlane within the Boat Insurance process that lies between the agent and the company;employees.;6;Business Process Change;The Boat Insurance Case Study;Question 4 (Two Points);Prepare a first draft BPMN diagram that shows the Boat Sales Insurance Process. Be;clear about how the customer interacts with the Insurance Company.;7;Business Process Change;The Boat Insurance Case Study;Reading 5;In working up the BPMN flow diagram, you will notice that there are several occasions;where the Registration Clerk has to update policies. As this occurs often, its important to;get it right, so the BPM team decides to define this specific process in more detail. To do;this, they interview the supervisor of registration clerks and several actual clerks. They;also watch the registration clerks perform updates. Here are the notes they came up;with.;Customers often provide information about updates usually hand written on statements;that are returned with payments, but occasionally included in separate letters. Or the;customer talks with an agent who sends an email to the registration department. Each;request must be evaluated. In essence, most requests are routine a name has been;misspelled or the customer has moved from one address or another. On the other hand;some requests involve basic changes in the policy. If a customer sells a boat and buys;another, then one policy must be canceled and another initiated. Similarly, the insurance;is only valid for an Ohio residence, as it is always interpreted under Ohio law. A client;can use or even dock his or her boat anywhere, as long as his or her residence is in Ohio;but a client that moves from Ohio to Indiana will necessarily need to cancel his or her;existing policy and get new insurance in Indiana. If the registration agent determines that;a proposed change is a policy changing change, the agent refers the request to the;claims adjuster who notifies the agent that the policy has changed or must be rewritten or;canceled. Assuming the clerk determines that the change is legal and can be made, the;clerk accesses the Boat Insurance Application and calls up the customer record by;entering the customer account number. The clerk then moves to the appropriate computer;screen, finds the item to be changed and makes the change. When the clerk is satisfied;that the change is correct, he or she selects UPDATE and the change is made. The system;automatically documents when changes are made and who makes them, and saves old;data in case a change needs to be reversed. The clerk then files the request document that;generated the change and moves on to his or her next task.;Question 5 (Two Points);Prepare a BPMN diagram to document the Policy Information Updated process. Draft;business rules to document decisions that must be made. To do this, create a new;swimlane for the IT Dept/Boat Insurance Application.;Question 5-A (Two Points): The interaction between the clerk and the insurance;application clearly involves computer screens. Describe how a use case might be;developed to specify how the screens could be improved.;Question 5-B (Two Points): Assume that the clerks were not doing a good job entering;updates when they arrived. Describe how you might analyze the human performance;situation to identify problems the clerks might be having. Create a fishbone diagram to;illustrate the things you might consider.;8;Business Process Change;9;The Boat Insurance Case Study;Business Process Change;The Boat Insurance Case Study;Reading 6: Redesigning the Boat Insurance Process;Given what they had learned during the analysis phase, the process redesign team decided;to make some specific changes in the boat insurance process. They changed the date for;when government reports were prepared, to allow more time, and made it a managerial;responsibility to assure that reports were submitted on time. They did the same thing for;reports for senior management, and warned Boat Insurance managers that a portion of;their bonuses would depend on getting reports in on time. The company also decided to;make the use of field Agents optional in the claims process. A customer could use an;Agent, if they wanted, but they could also file a report directly, on line, by going to the;company website, selecting Boat Claim, filling in the information and attaching photos;taken by a digital camera. This information would be routed directly to a Claims;Adjustor who would prioritize the analysis of the claim and respond with a payment;proposal within 3 days. In exceptional cases, the Claims Adjustor would ask a field;Agent to check out the claim, but in most cases, they would propose a payment as soon as;they received the online documentation.;The team also recommended that the training for the Field Agents be modified and that;their incentive program be modified to assure that the agents paid more attention to sales;reports and dealing with claims when appropriate.;The team also considered launching a separate project to define the business rules;involved in analyzing change requests and to eventually incorporate those rules into the;Website so that customers would know immediately when they applied for changes that;would violate company policies.;10;Business Process Change;The Boat Insurance Case Study;Question 6. Implement the Redesigned Business Process (Two Points);Start with this process diagram that pictures the original process. Modify this diagram to;show how the process team decided to change the process to simplify claims.;11;View Full Attachment;Additional Requirements;Min Pages: 5;Level of Detail: Only answer needed


Paper#17158 | Written in 18-Jul-2015

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