Loading ...This will be my last post for a while as I am off on an internet free vacation till Sep 25. Apologies for a rather long post. One of my pet themes is reducing friction in processes and a large part of PayPal’s success was because we were able to design very low friction processes. Similar to CMM Level 5 etc. maybe academics should think of an HIP ( How Insane is your process) scale where level 5 means it is very bad and level 1 means it is very good. A lot of processes in India are HIP-5 and I want to illustrate one HIP -5 process. My contention is that if processes in India moved down the HIP scale it would help “Make India”.
To be classified as HIP - 5 a process must place an unnecessary burden on the customer, achieve very little real results for the provider and be very poorly executed.
I receive a small annuity payment from LIC ( Life Insurance Corporation) , India every month based on a superannuation plan that Citibank India set up with LIC. In August the credit was not there. On checking with LIC they said that needed to verify that I was alive so they had stopped payments till I furnished them an “existence certificate”. It then took them 20 days to send me by courier two letters. The first a form letter which said that on 1st April 2006 it had been decided to ask for “existence certificates” every three years and if that was not provided payments would stop. Prior to August I had no communication from them. This form letter also had words truncated ( quality was poor). A separate letter contained the format of the existence certificate which fortunately I could fax back. However, just my signature would not do. I needed to get this certified by one of an LIC Class 1 officer, gazetted officer, registered medical practitioner with registration number or a bank manager with bank seal. So I will get this done and payments will restart
An interesting side note is that on my policy the amount payable on death is about 10 years of monthly payments so the potential that survivors of the policy holder would commit fraud by continuing to receive monthly payments instead of claiming the lumpsum after death is zero and if they do that it would benefit LIC.
There may be other policies where lumpsum payments are not there so fraud is a real problem. Now let us assume that someone is committing fraud. Is this process going to stop them. Sending a certified fax is easy and LIC will have great difficulty verifying whether the certification is genuine. Thus this will create a burden for honest guys and for LIC ( cost of managing process) and stop very little fraud if at all.
Do you agree that this a HIP-5 process ? How would you develop a HIP -1 process to address this problem for LIC ? I will give you my HIP-1 solution if its not already there in comments in late September.
I would probably go with a voice identification system so that anyone who has access to a phone can call up a toll free number, enter a unique policy number and identify himself or herself by speaking a few sentences as directed by the system. Although I have no idea about the state-of-the-art, I would venture to say that such a system should have no problems with supporting even Indian languages.
Advantages:
+ The system should be able to identify a large number of genuine policy holders like Sanjay. Thus, the burden on genuine customers is considerably reduced.
+ The system would cover a lot of policy holders as the person just needs to be located near the vicinity of a phone.
+ The insurance company needs to purchase just one centralized voice recognition system (as opposed to installing, say, some sort of a fingerprint machine in every town in the country).
Disadvantages:
- Survivors may still be able to cheat the process by mimicking the original policy-holder
- This process would unfortunately have false negatives. Such genuine customers not identified by the system would perhaps have to resort to the original process of identification (i.e. certification from the bank/medical/gazetted officers).
There may be more disadvantages. But I believe that I could think of something to iron iron out the wrinkles by adding more fail-safes, if I really spent some time thinking about the problem. To summarize, the big-picture is that I would go with voice-identification (if such technologies exist :). If it doesn’t exist, let’s just go and invent it.
I am not sure I want to go hitech, but in case you are employed, all I would ask for is your latest salary slip or in case you have specified that the money be directly paid to a bank account, an account statement showing the bank account to be in use. Or maybe LIC can linkup to CIBIL and use the credit card usage, to check if the person is alive and kicking. There are lots of trails we leave these days, its just picking up something which is easier to match ones records with. Maybe a onetime exercise needs to be conducted, to get these base numbers ( credit card, bank account etc) then, you dont need to harass the customer every three years.
I would not call this an off-incident as this has been a part of our lives for years now.
But yes, things are shaping up in a lot of areas.
Infact, SAP/Oracle have been working on streamlining processes around us. These days, they are busy fishing vendors who shall handle maintenance, once they are gone.
Though there is a ray of hope, I would still go with Sanjay. Things need to change.
HIP 1 can surely happen, a tool that I can think of is LEAN. It talks about minimizing waste (in the form of effort, time and resources). There are more available, however, this could be something we could start with and improve on.
LEAN is for Industries. How would you apply it on IT or any related service?
You are right Mary.
LEAN was initially started for Production based industries. Around 2003, while I was working with one of the leading companies around, they came up with an idea of implementing LEAN at their BPO.
Initially, we also thought about industries and expected God to be with them. However, the results were stunning. e.g. Booking an office cab for pickup or drop always required a minimum12 hour notice. Soon the booking time became 6 hours then it became 1 hour, and now it must have further improved!
I agree with what Sanjay has said. It was just a thought, that LEAN could possibly be a tool for HIP 1.
Here are my two cents. The first step would be for LIC to see where they need proof of existence and where they do not. In my kind of annuity they clearly do not.
I am assuming that where fraud is possible commiting fraud is a crime. Thus they should set up a process which used statistical sampling techniques to select policies for scrutiny.
Once a policy is selected for scrutiny send a letter to ask the policy holder to visit a designated officer to complete an existence verification process which is simple and clear. Give the customer a set of pens and an LIC diary with promotional material on LIC to build brand and to compensate the honest customer somewhat for the hassle.
If the person does not show up stop payments but more importantly see if fraud has been committed and if it has get the fraudsters penalized.
Publicise the whole process so that the propensity to commit fraud reduces.
This process will not eliminate fraud but it will significantly reduce it which should be the objective. The cost of fraud prevention should not be more than the cost of fraud.
By the way my pension has restarted. Whew !!!