1 China Life AE and Best Practice Ver2.0-en

1、China LifeIT Strategy ProjectThe Adaptive Enterprise&IT Best Practices10 & 11 January 2004China Life, BeijingAgendaWelcome and Introduction of participantsEnterprise ArchitectureThe Adaptive Enterprise & IT Best PracticesApplicationInfrastructureDataDay 1 (morning only)Day 2LunchIT StrategyGovernanc

2、eBreakout discussionBreakout discussionRecap and ConclusionsFeedback from discussion workgroupsIntroduction to workshopDay 2 previewQ&AAgendaThe Adaptive EnterpriseInsurance Industry IT Best PracticesChina Life TodayConclusionAgendaThe Adaptive EnterpriseInsurance Industry IT Best PracticesChina Lif

3、e TodayConclusionPracticing what we preach HPs own adaptive enterpriseThe biggest tech merger in history HP & CompaqThe size of the IT taskThe desired result: 1,200 networked sites215,000 desktops49,000 network devices7,000+ applications900+ web servers and infrastructure21,671 servers228,000 mailbo

4、xes26 million emails a week30 million B2B messages monthlyCustomers and partners interact with HP as one company Products and solutions go-to-market through integrated, global supply chainsHP workforce operates as a single companyIT cost and complexity are reducedBusiness performance improves Improv

5、e agility:Enable business to respond to changing markets and competitive pressuresEnable business and IT to synchronizeUse ability to change as a competitive advantageManage costs:Reduce cost of changeLower operations and acquisition costsBalance fixed vs. variable costsMitigate risk:Ensure security

6、 and continuity of business operationsRisk of not innovatingImpact of technology implementation on people and processIncrease quality:Improve customer satisfactionLink and extend value chain Improve service levels across the value chainBusiness agility: the new dimension Traditional management has f

7、ocused on cost and quality. Leaders of tomorrow are actively managing risk and treat agility as a critical success factorAdaptive Enterprise reference architectureBusinessStrategyOrchestration of the flow of goods, information, and value across a value chain to accomplish the objectives of the busin

8、essBusinessProcesses and InformationOperational Reference models and business rules and policies, key performance indicators, and flow of logical informationApplicationsApplication is one of the key enablers of the Core & main supporting Business Processes., and provides business informationDataAcce

9、ss to information is a key factor in reducing the time needed to respond to changes in industry, customer, and internal situations or requirements.InfrastructuresThe information technology infrastructure should be reliable, available, cost effective, and use shared (virtualized) resources.Governance

10、Manage & Control , Connect distributed business processes and IT services with resourcesIntegrate & OrchestrateBusiness StrategyDemandInfrastructureVirtualized ResourcesResourcesVirtualizationSourcingSharingPoolingClientsImaging/PrintingServersStorageInfrastructure ServicesWeb/GridservicesDocument/I

11、maging servicesNetworkSoftwareEnviron-mentSupplyBusiness ProcessesInformationApplication ServicesInfo Policies/StdsProcess ModelsProductBusiness DocsBus Intel RptsMobility/NetworkservicesDatabaseservicesRegistryservicesTrust & SecurityservicesCollaborationservicesITBusinessSupportMgt Integration Cha

12、nnelITOperationsSupportManage & controllifecyclePolicy-basedControlIntegrate & OrchestrateOperational Reference ModelsBusiness Rules and PoliciesKPIBusiness Process DesignData ServiceIT is a business accelerator that drives business valueAchieved $3 billion in cost savings in 9 monthsDelivered $1.3

13、billion in supply chain integration savings in first nine months, $1 billion more next yeare-business operations on a path to triple transaction volume by 2004Reduced build-to-order PC manufacturing costs by 26% Rolled out worlds largest, most complex PeopleSoft 8.0 e-HR installationReduced financia

14、l transaction processing costs by almost $20 million annuallyReduced and simplified applications portfolio from 7,000 to 5,000Reduced overall IT costs by 24%Business and technology innovation2Architect and integrate4Extendand link3Manageand control1 Measure and assessHow did we do it? A disciplined

15、approachAn integrated plan of record with rigorous program managementApplied design principles across the entire IT environment Deployed adaptive network architecture to enable day one communication with suppliers, employees and customersImplemented Utility Data Center in Palo Alto, BristolImplement

16、ed KeyChain to enable suppliers to deal with real-time shifts in pricing, production and capacityOutsourced IT environment to HP ServicesScaling e-business operationsAgendaThe Adaptive EnterpriseInsurance Industry IT Best PracticesChina Life TodayConclusionGlobal market pressures in the insurance in

17、dustryCustomers expectationsFlight to QualityCustomized Complex ProductsPrice SensitiveOne Stop ShoppingFinancial accountability and governanceNew International Financial Reporting (accounting) Standards for insurersSarbanes Oxley financial accountabilityRisk management and governance requirementsDi

18、stribution sophisticationProfessional agentsBancassuranceChannel integrationGlobalizationFinancial Services Industry convergenceFree Trade / New entrantsNew marketsGlobal OutsourcingMergers / Acquisitions / Alliances / Joint VenturesVolatile financial marketsNew investment classes Negative spreadsAs

19、set Liability managementFund manager accountabilityInsurance industryGlobal forces are changing the nature of the insurance industry, with uncertainty and change becoming the normFinancial Services AutomationComparative AssessmentSecurities - 30 + years70s - Began automationDeveloped industry data a

20、nd transaction standardsMid 90s - seamless integration and web-enabled transactionsIncreased:Market Growth ProfitsCustomer Base Product innovation Decreased:Operational Costs Distribution CostsProcessing T30 - T1New Business Models with:Partnerships OutsourcingExtensive online sales, service and dis

21、tribution Banking - 20+ years80s - Began automationDeveloped industry data and transaction standardsMid 90s - seamless integration and web-enabled transactionsIncreased:Growth ProfitsCustomer Base Product InnovationDecreased:Operational CostsDistribution CostsNew Business Models with:Partnerships Ou

22、tsourcingExtensive online sales, service and distribution20+ years to get to this pointInsurance - Not yet There?90s - Systems integration and sales force automationLack of industry data or transaction standardsLack of seamless integration and web-enabled transactionsFlat or Decreased:Growth Custome

23、r baseProfits Product InnovationCross-sellingBusiness Models lack:PartnershipsOutsourcingNew methods of sales, service and distributionLimited Timeframe to Compete!Insurance companies lag behind other financial institutions in adopting technology to provide competitive advantageNew service requireme

24、ntsNew serviceCross- channelcustomer serviceBusiness opportunity Improved customer retention Lower servicing costs Improved cross-selling Chokepoints Inwardly facing legacy systems Isolated CRM appsExpense andbudgeting advice Lock in younger consumerswith value-added advice Transactional systems not

25、integratedLife insurancesales fulfillment 1 week to issue policy -instead of 4 weeks Insurers rekey customer andhealth dataAutomatedclaims settlement Improved customer retention Lower risk of customer suits Drive down high costs ofrepair, litigation, and medical Adjusters rely paper files No audit t

26、rail for evaluatingrepair shopsBundled loan,DDA, savings, andinvestmentproducts Increased customerconvenience More difficult to compareand switch Separate product systemsthat do not interoperateSource: ForresterNew service requirements will strain existing infrastructuresPoints of PainLegacy systems

27、 costs & Inflexibility Speed to market Customer Service Distribution Support Administrative Costs wrap the legacies and provide a platform for migration & conversionimplement & re-engineer with automated business processesCreate componentised product engine to enable rapid product developmentDeploy

28、common customer engagement processes across diverse systemsUse a integration hub or bus to support for multiple distribution channels Key current issuesSolution trendsEstablished insurers are just beginning to address their legacy issues“IT priorities in insurance seem concentrated on improving poli

29、cy administration and claims processing“About 50 percent of insurance companies plan to increase spending on core processing in 2003Financial Services Providers Shift IT Spending PrioritiesGartner Dataquest Susan CournoyerSeptember 03“Reengineering of the core insurance environment is essential to o

30、perational efficiency, thus creating the platform for many other technology initiatives to occur.US Insurance Technology Opportunities DMTC0924 Datamonitor (Published 06/2003)Core insurance systemsCore insurance administrative systems still remain a top priorityGartner anticipates that technology ad

31、option in the insurance industry will accelerate as global economic conditions improve. Investments will centre on supporting business process management and core practices, such as claims and underwriting.Insurance Technology Trends and Best Practices Gartner Research Note30 September 2003Sales and

32、 agency managementTrainingRecruitmentRemunerationProspectingSellingAgency managementPolicy ServicingRecruitment websiteTrack status of applicantsKeep records*Provide drill down MIS* Calculate commissions and other remunerationRecordsComputer Based TrainingOnline libraryProspecting activityLeads mana

33、gementContact managementRecord sales activitiesSales illustrationsNeeds analysisNotify agent of policy anniversaryNotify agent of any customer activitiesFulfillmentCapture applicationTrack applicationTrack paymentsIT increases effectiveness and control of the sales processBusiness IntelligenceAnalyt

34、ical data is providing critical business intelligence for decision support purposesOLTPPrimary Data StoresCoreSFAOperational Data StoreData WarehouseEAIMetadata ManagementBalanced ScorecardKPIs and Financial AnalyticsDigital DashboardCRM AnalyticsEnterprise Risk ManagementData MartData MartOLAP appl

35、icationsBusiness IntelligenceContact centresCustomer service and Channel integrationWebsiteCustomersDistributorsBranchPhone/FaxInternetPDACore systemsIT is needed to co-ordinate and integrate different channels and mediaStandardisation XMLXML is becoming the defacto standard for interconnectivitySou

36、rce: GartnerFew Insurers Have Completed an XML Implementation.but there is a positive Perception of Industry Adoption for XML Standards. And most Feel Adoption Will Occur Within Three YearsShared Services and OutsourcingHSBC (UK and HK) will be outsourcing its operations to ChinaThere is a growing t

37、rend for companies to outsource or insource their operations to achieve cost reductionsUK Prudential will be relocating much of its back office operations to IndiaA reasonable Third party administration market already exists in the USA catering for small and medium size playersPan European insurers

38、adopting shared services approach, by centralising across many countriesNorth America SummaryCategory of expenditureInsurers are spending money on customisation services to provide differentiation and outside supply to drive costs down.Hardware and software have become commoditisedAgendaThe Adaptive

39、 EnterpriseInsurance Industry IT Best PracticesChina Life TodayConclusionChina Life - Overall current StatusBusiness contextRapidly growing market size Increased sophistication in certain parts of marketIncreased central control versus provincial controlIncreasing supervision activities The variatio

40、n of products has threatened the profit levelChina Life has made significant progress in automating much of its basic transactional processes. However the rapidly changing business environment is putting pressure on IT resourcesKey achievements to date (IT)National hardware network fully installedAu

41、tomation of most core insurance transactional processesSome branches has realized the call centre system and imaging system.Work in progressSome provinces are already physically centrallized CBPS8.0 three-tiered architecture, which oriented towards personal insurance, thus laying foundation for cent

42、ralization and new architecture. Call centre is being popularised Imaging implemented in a number of provinces E-business service is being developedChina Lifes EA Current IssuesBusiness StrategyApplications & DataInfrastructureBusiness ProcessesManage & controlDemandInformationThe management and dec

43、ision process can not conduct well due to lack of informationProcess breaks (e.g. Policy management and Finance)No effective process automation no workflowBPR in progressNo application arch definedApplication can only satisfy the current Biz operation needsLack of support in some area i.e. DSS, prod

44、uct develop, health insurance, re-insuranceInterface between applications not defined very well.Based on individual life application to develop other applicationsEach application has its own data modelsData not consistent between applications, also data can not shared by applicationsData management

45、at city level, not centralizedNo data standard definedData quality is poorLack of data for management and decision support No BCPNo complete security arch and policies definedMost management activities are manualServer and storages are only physically centralized at province levelPhase 1 of this pro

46、ject identified various issues in China Lifes current EA modelLow efficiency of procurement process,IT investment is lowNo IT service model defined, IT service passively respond to Biz requirementIT organization at different levels and 2 report linesIT cost is not charged to businessSupplyThe Busine

47、ss drivers clearly demands process agility and our assessment revealed that currently IT is not able to enable agility for these processesThe assessment showed that the critical processes are all in critical zone, meaning that their capability to respond to business change events is poorSales suppor

48、t and new product applications agility is pretty low Overall IT support also scored pretty low in fulfilling Agility demandsThe Commission process agility is supported by a configurable application now, but this should also need more agile to meet the future business changes. Agility assessmentIn a

49、dynamic business environment, Sales, Product Development etc. will demand more Agility, the role of IT, hence, will need to ensure that these processes get IT support not only to ensure process efficiency but also provide a flexible / adaptive application & InfrastructureAgendaThe Adaptive EnterpriseInsurance Industry IT Best PracticesCh