Case 2.1 : Modernization of NTUC Income

1. Modernization of NTUC Income CASE 2.1
1 MBA_Batch2_UMK_Kch/M7/GST5803/Information System and E-Commerce/P14D397P
CASE STUDY 2.1
MODERNIZATION OF NTUC INCOME
INTRODUCTION
NTUC Income Insurance Co-operative
Limited was established in 1970 by the
National Trade Union Congress to
provide insurance coverage for the low
and middle income groups. The company
had a large proportion of Singapore‟s
insurance market due its close
relationship with the large labour
movement, but was losing market share
due to heavy competition from foreign
insurance companies. In 2007, Tan Suee
Chieh, the CEO of NTUC Income,
restructured the company to strengthen
management, operations and staff engagement. In 2012, the company was awarded the
Singapore‟s Best Car Insurer by the AsiaOne People‟s Choice Award, and was recognised as
the best in health and medical insurance, life insurance and motor insurance in the Customer
Satisfaction Index of Singapore.
In October 2011, with a new, externally focused „Orange Revolution‟ campaign. It aimed to
position NTUC Income as an insurer committed to being simple, honest and different whilst
simultaneously redefining how the insurance market operates in Singapore. A series of
initiatives were established : Orange Force to put an army of NTUC Income advisers on the
streets; Orange Speak to establish the use of transparent and plain English in all dealings; and
Orange First to reward staff and financial advisors for their transparent and plain speaking.
The impact of the Orange Revolution has been significant for the business. A modest shift in
financial performance has been accompanied by national awards and accolades for
transparency and customer service.

2. Modernization of NTUC Income CASE 2.1
2 MBA_Batch2_UMK_Kch/M7/GST5803/Information System and E-Commerce/P14D397P
The Orange Revolution is a 1,500-day campaign, and therefore not all elements of the
campaign were implemented immediately, but delivered over the four years. To date, three
core elements of the Orange Revolution campaign have been put in place.
Orange Force : NTUC Income established a fleet of 30 trained motorcyclists in orange
outfits who could ride in twenty minutes to traffic accidents and problems to help with first
aid, help fill out insurance forms, offer advice on the scene and reduce the incidence of fraud.
An important part of Orange Force is that the assistants did not just help NTUC Income
policyholders, but also assisted non-policyholders. In fact, by end of 2012 over half of those
assisted were non-policyholders.
Orange Speak : Alongside Orange Force, the campaign also shifted the way it dealt with its
customers by ensuring that all dealings, and contracts, were written in clear and easy to
understand terminology. This is a key element in realising NTUC Income‟s aim of being
simple, honest and different. Specifically, as part of this element of the campaign, NTUC
Income undertook the Crystal Mark initiative, a globally recognised standard for plain
English which guarantees that a document offers simple, clear and concise information. It has
now achieved more Crystal Marks than any other business in Asia: NTUC Income has over
50 Crystal Marks and over 95% of NTUC Income‟s customers now have their contracts
issued with Crystal Marks.
Orange First : This campaign focused on the staff, partners and financial advisers working
on behalf of NTUC Income. It rewards the sales force – through awards and other initiatives
– for dealing with customers in a trustworthy and transparent way. This element of the
campaign reflects the fact that an externally facing campaign requires internal buy-in from
across the customer-facing workforce if it is to be delivered successfully and consistently. In
line with the rest of Orange Revolution, though, whilst Orange First is internally focused, it
also has a promotional side. A multi-media advertising campaign reinforces the NTUC
Income‟s commitment to Orange First amongst its staff, showing in turn NTUC Income‟s
role in making insurance simple, honest and different.

3. Modernization of NTUC Income CASE 2.1
3 MBA_Batch2_UMK_Kch/M7/GST5803/Information System and E-Commerce/P14D397P
QUESTION 1
What were the problems faced by Income in this case? How were the problems solved
by the new digital system?
Incomes insurance processes were very tedious and paper-based. This resulted to humongous
Income also experienced frequent breakdown of the HP 3000 mainframe which hosted the
core insurance applications and the accounting and management information systems. In
addition to this, HP 3000 back-up system only allowed restoration to the previous day‟s back-
up data. Hardware failures caused six days of complete downtime. COBOL programs also
encountered frequent breakdowns that halted the systems and caused temporary interruptions.
At the same time, development of new products using the COBOL is quite cumbersome and
took weeks, even months, to accomplish. They also lost opportunities to cross-sell because
transaction processing for policy underwriting was still a batch process and information is not
available to agents and advisors in real-time. Through the new digital systems, these
problems were addressed. The paper-based insurance processes were replaced by a paperless
platform. Under the new system, all documents are scanned and stored on ´trustedµ storage
devices. Frequent breakdowns were addressed by the high-availability platform. Multiple
servers are hosted and connected to more communication lines that are ´load balancedµ. The
new system also addressed downtimes due to breakdowns by its hot back-up disaster-
recovery centers. The new digital system also addressed the slow development of new
products by COBOL through the straight through processing workflow capabilities of the
new system.

4. Modernization of NTUC Income CASE 2.1
4 MBA_Batch2_UMK_Kch/M7/GST5803/Information System and E-Commerce/P14D397P
QUESTION 2
What types of information systems and business processes were used by Income before
migrating to the fully digital system?
The insurance process of Income was very manual and paper intensive. Filled up application
forms of clients were sent by agents through courier. Their collection schedule causes delays
of two to three days. The Official Services log, sort and send documents to underwriting.
Proposals were allocated to staff randomly. There was no system for proper assignment tasks
per staff. Voluminous document are manually sorted and stored and store by a number of
staff at their warehouse. Since there was no clear document management systems, retrieval of
documents take days to accomplish. Income also made use of HP 3000 mainframes which
were very unreliable due to frequent breakdowns that resulted to downtime, decreased
productivity and wasted manpower hours. COBOL programs were also used which also
encountered technical failures. At the same time COBOL programs were very slow in
developing new products for company resulting to lost sale opportunities.

5. Modernization of NTUC Income CASE 2.1
5 MBA_Batch2_UMK_Kch/M7/GST5803/Information System and E-Commerce/P14D397P
QUESTION 3
Describe the Information Systems and IT infrastructure at income after migrating to
the fully digital system?
The new information system comprised 3 sub-system which are Policy Administration, Sales
Management and Supplementary Resources that fulfilled that company requirement. This
system contain :
1. Customer Centric Design
2. Seamless integration with Imaging
3. Barcode Technology
The software runs on multiple high-availability servers which connected to multiple
communication lines for load balancing to minimized down-time. Entire IT infrastructures
were replaced with robust, scalable architecture for example faster LAN cables with a fiber-
optic backbone and wireless capability. A real-time hot backup disaster-recovery center
implemented. All paper records were digitalize by scanning and storing into a reliable storage
devices.

6. Modernization of NTUC Income CASE 2.1
6 MBA_Batch2_UMK_Kch/M7/GST5803/Information System and E-Commerce/P14D397P
QUESTION 4
What benefits did Income reap from the new system?
The robust architecture of the servers minimized downtime occurrence. This is made possible
with the use of two or more servers connected by two or more communication lines. Income
also reduced and eventually eliminated the use of paper. Under the new system, all
documents we rescanned and stored on ´trustedµ storage devices ² secured, reliable digital
vaults that enabled strict compliance with stringent statutory requirements. Staff members
also enjoyed faster access to information. With the use of the straight through processing
workflow capabilities of the new system, Income saved as much as 50 percent on time and
costs in processing policies. Time in designing and launching new products were also
reduced from weeks to days using the table-driven-rule-based product-definition module.

7. Modernization of NTUC Income CASE 2.1
7 MBA_Batch2_UMK_Kch/M7/GST5803/Information System and E-Commerce/P14D397P
QUESTION 3
How well is Income prepared for the future? Are the problems described in the case
likely to be repeated?
NTUC Income has created a new dimension of system since they overcome they problem and
weakness through the execution of eBao technology and they are prepare enough for their
future.
Before switched and implement to the java based eBao life system, NTUC income faced lots
of difficulty in term of insurance application, accounting and management information
system. But after implemented eBao Life System to eBay technology income has restore its
IT infrastructure by upgrading their system through increasing PC RAM size, installing
scanner and etc. which help them store more data.
They also implement hot back up disaster recovery center so that all the data cannot be lost
easily and remain storage and they do not need to depend on restoration of previous day data.
Under the new system all document stored as well on “trusted” storage device.
For IT infrastructure NTUC Income need to replaced or upgrade from time to time due to
technology change are faster from day to day. If they didn‟t prepare for the future, it possible
that the same problem will occurs.