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.

Latest posts by Sanjay (see all)