capgemini consulting claims ops model alignment program 3 13 2015

Transform to the power of digital

Aligning the Claims Operating Model with Enterprise Strategy

Discussion Guide

March 2015

The information contained in this document is proprietary. Copyright © 2015 Capgemini. All rights reserved

Contents

Insurance Business Challenges

Enterprise Strategy and the Claims Operating Model

Aligning the Claims Operating Model

Calibrating Alignment Strategy – Claims Diagnostic Review

Representative Profiles


Five Key Insurance Enterprise Strategy Trends in 2014-2015

New claims systems are a top business and technology priority

Significant linkage between customer retention and customer satisfaction with the claims process

The claims process is the most involved and emotionally charged interaction between insurers and customers

Use the data generated in a claims process to improve customer satisfaction and profitability (claims analytics)

Insurers‘ ongoing efforts to improve their ability to accurately price risk inherent in the policies they issue

Need to accurately assess data and manage underwriting in a fast, cost-effective manner

Pressure on insurers to exercise more underwriting discipline

Improve insight into customer data managementand analytics

Development of a multichannel integrated platform to support cross-channel interaction

Need for investment in business process monitoring (BPM) solutions for customer-facing channels

Shifting the business model to support electronic channels, content, andtransactions

Expanding CRM to align processes, products, channels, and brand to match customer preferences

Build the Customer-Centric Insurance organisation

Market differentiation to find new sources of revenue

Use of new tools for product development and delivery, e.g., mobile devices, telematics, product configurators

Better alignment of products with market needs, reduce the time- and cost-to-market

Source: Capgemini Competitive Intelligence Center, Gartner, Deloitte

1 2 3 4 5Improving

Underwriting Discipline

Claims Transformation

Closer Customer Experience

Digitization and Automation

Product Innovation and Mobile Solutions


Establishing and maintaining alignment between the Claims Operating Model and Enterprise Strategy supports Business Goals and drives Enterprise Value

EnterpriseStrategy

RISK MANAGEMENTCUSTOMER ACQUISITION

CUSTOMER RETENTIONOPERATING PROFITABILITY

Claim costs (loss payments + loss adjustment expenses) account for 70% to 75% of the combined ratio.

Claims management is a major factor in operating performance and results.

Claims services are a major customer satisfaction criteria: the customer experience represents the “moment of truth.”

Effectiveness and efficiency of claims services are key differentiators.

New customer acquisition costs are seven times the cost of customer retention.

Optimized claims costs enable competitive rates and improved experience-based premiums.

Accurate claims data supports risk segmentation and tight underwriting rules.

Claims service and ease of doing business support customer acceptance and channel partners.

Reserve integrity (case reserves, IBNR) has direct impact on insurer ability to face its future obligations.

Partnering on loss control and predictive modeling

Risk-sharing via cost-effective reinsurance strategies

Historical loss data is translated into actionable business intelligence.

Claims Operating Model


Based on our experience, an effective Claims Operating Model encompasses the following components

Lays out the strategic imperatives: values, vision, mission, and goals.

The intelligent combination of management processes and internal controls

Defines the fundamental requirements for effective leadership, organization and how actively the corporate organization will monitor and manage the Claims Organization

An effective Claims Operating Model is designed (and continuously refined) to balance and enhance aspects of effectiveness, efficiency, and Customer Experience achieved through the Process, People, and Technology capabilities of the Claims organization.

Definition Rationale/Implications

Includes the Claims Value Chain, including external suppliers

Defines the workflows linking individual claim activities

Describes the high-level organizational structure, knowledge, and expertise needed to process claims

Identifies roles based on claims organization needs, not on organizational structure

Defines the interfaces for cooperation among organizational functional areas

Defines organizational and management structures

Provides technology to support functionality used by the department, including automation and other enablers

Identifies the format, maintenance, and dissemination of data and information

The process model component will allow the Claims Organization to understand the efficiency and effectiveness of existing processes while defining gaps.

This component helps define at a high level the future skills and level of knowledge integration.

Helps management understand the level of change needed to drive sustainable performance relative to skills, behaviors, and metrics alignment

Effective development of management processes will define the business operational parameters and measurement framework

Technology enablement will identify the technological roadmap and tools to support the flow of information and activities across the Claims organization.

Management Processes

Process Model(s)

TechnologyEnablement

People: Skills & Competencies

Governance


Aligning the Claims Operating Model with Enterprise Strategy helps drive operational excellence

What are the current and future needs of the business units (and insurance products) serviced by the Claims Operation?

Who are our clients (internal and external) and what are their needs and requirements?

What are the implications for our operation, e.g., flexibility, responsiveness, quality, cost?

What are the potential competitive advantages and differentiators?

What other considerations will impact the Claims Operating Strategy, e.g., cultural, political, regulatory, competitor offerings, org structure, existing skill sets?

What are the gaps between current and required capabilities and processes and what are the initiatives required to fill those gaps?

What capabilities and processes can be achieved through third-party vendors?

What is the initiative roadmap that drives change at a pace the Claims organization can handle?

How do we measure success, i.e., metrics?

1

2

3

4

5

6

To align the Claims Operating Model with the Enterprise Strategy, a number of questions must be answered:

6

Industry Trends

CompetitiveLandscape

CorporateObjectives

Org. Alignment

Customer Requirements

Partner Capabilities

PhysicalInfra-structure

Current Capabilities

Customer Needs

Governance

TechnologyProcess

External Constraints

Industry Trends

CompetitiveLandscape

Internal Challenges

CorporateGoals

Org. Alignment

Claims Operating Model Framework

Operating Requirements

Customer Requirements

Vendor Capabilities

Operating Capabilities

Service-levelObjectives

Service Requirements

PhysicalInfra-structure

Current Capabilities

People/Management

ProcessesOperating Model supported by Change Management

We have developed a strategy- and operations-driven program to guide you through the process of aligning the Claims Operating Model with the Enterprise Strategy

Copyright © 2011 Capgemini Consulting. All rights reserved.

7

Claims Diagnostic Review Future Initiatives Future Initiatives

Develop a Target Claims Operating

STRATEGY and model

Review current state capabilities

Compare to business needs and requirements and leading practices

Identify gaps and opportunities

Define target Claims Operating Model

Identify improvement initiatives

Help you DESIGN customized improvements

Design governance, process, organization, technology improvement initiatives

Identify the technology enablers

Evaluate and select third-party vendor partners

Outline a path to IMPLEMENT the improvement initiatives

Build and test enabling technology

Train and implement technology and process changes

Enable you to SUSTAIN the changes and improvements

Manage ongoing requirements

Integrate changes and upgrades

ONGOINGPHASE IIIPHASE IIPHASE I

Claim Diagnostic Review Future initiatives Future Initiatives

Organization Change Management (OCM)



Strategy calibration through the Claims Diagnostic Review (CDR) is the first part of the program and is designed to clarify business strategy and develop and define the Target Claims Operating Model

Key

Ob

ject

ive

sA

ctiv

itie

s

8

Implement

Implement initiatives

Build and test enabling technology to align business and technical capabilities

Develop plan to sustain changes

Define training and manage impact to Claims Operation

Deploy future state capabilities

Build future state technology solution(s)

Roll out vendor initiatives

Prepare and approve the training strategy and training deployment plan

Execute training and change management plans to support delivery

12 - 36 Months

Sustain

Manage future requirements and advances

Manage organization and people so that gains can be maintained

Resolve post-implementation issues

Confirm operational effectiveness of implementation

Manage performance improvement and future requirements

Implement governance model to maintain capability

Ongoing

Phase I (CDR): Strategy

Understand stakeholders, including internal and external customers, and business needs and requirements

Define business operating environment and strategy

Define and assess capabilities needed to enable the strategy

Develop prioritized initiatives supported by a high-level financial impact analysis

Prioritize initiatives for Design Phase

Develop use cases and criteria for technology and vendor selection

Identify potential technology solutions and vendors

Identify and assess stakeholders, business issues and strategy, and current Claims Operating Model

Perform gap analysis

Define Target Claims Operating Model

Develop improvement initiatives

Develop vendor market research and technology use cases

Define roadmap to Design and Implement

4-6 Weeks

Design

Review and decide on governance, process, organization, and technology initiatives

Decide on technology and third-party vendors

Design organization & process alignment, capability development, culture development, and change sustainability plan, i.e., change plan and change agent network

Prepare initiatives for Implementation

Define new processes, organization, and management structures, capabilities, and roles

Conduct RFP or other equivalent process for technology and vendor selection; finalize selection

Design change management plan, program and processes

2 Months


Approach: Strategy phase (Claims Diagnostic Review)

9

Identify and interview key stakeholders

Identify key industry trends and leading practices that may impact business requirements

Identify customer and business requirements

Catalog current capabilities and ongoing initiatives

Identify future capability needs

Identify stakeholders for change management activities

Del

iver

able

sA

ctiv

itie

s

Project Kick-Off

Assess External Landscape,

Opportunities, and Value Propositions

1

Assess Existing Operations

2 Identify Capability Gaps

3

Define Initiatives

4

Develop Roadmap and Use Case for Technology

5

Stakeholder Interview Observations

Industry Trend and Practices Snapshot

Business Value Propositions

Claim Sample Review Findings

Operational Capabilities Catalog

Assess current capabilities and initiatives versus requirements to realize business value propositions

Identify gaps between current and future capabilities

Define nature, size and impact of gaps

Capability Gap Analysis

Define effort required to develop capabilities

Identify dependencies between planned initiatives and existing efforts

Prioritize initiatives based on achievability, organizational readiness, and financial impact

Assess organization change readiness and identify change agents

Capability Initiative Catalog

Develop roadmap of prioritized initiatives that focuses on realizing value

Identify technology and vendor options

Initiative roadmap

Vendor research

Use cases for technology comparisons/testing

Organization Change Management (OCM)


Our approach uses tools and accelerators that can facilitate the rapid development of the Strategy Phase (CDR) deliverables

10

Interview Templates

Operational Capability Framework

Capability Gap Assessment Approach

InitiativePrioritization

Initiative Roadmap

Sample Project Tools and Accelerators

22

DRAFT

Prioritising the e-Business Initiatives

Initiative

1. e-Buying (incl. leveraged catalogues)

2. Buy-Side Auctions

3. Collaborative Purchasing

4. Supplier CPFR

5. Supplier Inventory Management

6. Collaborative Product Development &

Introduction

7. E-Settlement (Buy-Side)

8. Content Management

9. Knowledge Management

10. HR Self-Service

11. E-Recruitment

12. eLearning

13. Statutory Compliance: Government

Returns

14. Logistics & Transportation Collaboration

15. Item Catalogue

16. Retail Exchange Participation

17. Private Exchange Participation

18. Customer Portal (eCRM)

19. Web-Enabled Call Centre & Email

Response Systems

20. Field Sales

21. E-Settlement (Sell-Side Customer)

22. Retailer Auctions

23. Sell Side Auctions

24. Promotions Management

25. Customer CPFR

26. Consumer Insight: Collaboration With

External Parties

27. Direct to Consumer Propositions (own /

participation in external props)

28. Investment in Buying Consortia

29. Investment in Retail Exchange

e-Business Initiatives and Prioritisation Scores:

Business Value Ease of Implementation

11 19

16.5 30

16.5 30

10 18

6 21

7 17

5 19

13.5 19

15.5 8

9 17

7 23

8 20

4 30

11 23

15 16

13 17

11 17

15.5 15

11 16

8 17

5 19

7 26

6.5 22

16 19

13 16

13 14

7 14

5 25

9 17

Ease of Implementation

Bus

ines

s V

alue

&

Str

ateg

ic Im

pera

tive

Question/

Redesign

Accelerate/

Invest

Tactical/

DiscretionaryKill

High

High

Low

Low

5 17.5 30

2

10

18

1

23

19

4

5

6

721

8

9

1029

11

12

13

14

15

17

18

20

2223

24

2526 16

27

28

Illustrative Framework

Prioritizing Supply Chain Initiatives

Supply Chain Initiatives and Scores

Detailed Approach to Value Proposition Development

Step

1Step

2

Step

3

Step

4

Step

5

• Production Schedule

• Inventory on hand

• Warehousing

• Logistics

• Customer Service

• Order Management

• Demand Management

Process Implications

Major Major

MilestonesMilestones

• 4Q04 – Online Channel Development

InputsInputs

• Product

Specifications

• Quantity

• Date Needed

• Ship To

Address

• Billing Address

• Customers• Inventory On-

hand• Production

Schedule• Accounts

Receivable• Shipping

Department

OutputsOutputs

Online retail channel

management

Management of online order from requisition to delivery to

the end consumer

Supply Chain Mgmt.Process AreaProcess Area

CapabilityCapability


DescriptionDescription

Capability ElementsCapability Elements

1. Ability to provide two way communications for online customer needs between end customer and Microsoft

• Receipt

• Bill of Laden

• Inventory

Update

• Delivery Date

• Production

Schedule

• Customers

• Email

communications

• Inventory on

hand



• Warehousing

• Logistics






• Warehousing

• Logistics





Major Major



InputsInputs

• Product

Specifications

• Quantity

• Date Needed

• Ship To

Address

• Billing Address

• Product

Specifications

• Quantity

• Date Needed

• Ship To

Address

• Billing Address


hand• Production



Department


hand• Production



Department

OutputsOutputs


management


the end consumer


the end consumer







• Receipt

• Bill of Laden

• Inventory

Update

• Delivery Date

• Production

Schedule

• Receipt

• Bill of Laden

• Inventory

Update

• Delivery Date

• Production

Schedule

• Customers

• Email

communications

• Inventory on

hand

• Customers

• Email

communications

• Inventory on

hand

Copyright © 2011 Capgemini Consulting. All rights reserved.

Roadmap

FY10 FY11 FY12 FY13

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

A2: DP Stat. Forecasting (SKY) Visibility

B1: Trading Partner Seg. & Strategy Consistency

C3: Mfg. Standards Methodology Consistency

C1: Manufacturing Process Decomposition

Consistency

C4: Mfg. & Qual. Actuals Integration Visibility

C2: Quality Process Decomposition Consistency

A1: Planning Effectiveness Consistency

D3: Lot Disposition Data & Controls Consistency

A7: Network Inventory Optimization Visibility

D1: Product Market Compliance Responsiveness

E3: Product Identification & Improvements

Consistency

A3: DP System Replacement Visibility

E1: Advanced Int./Ext. Visibility (no SNC)

Visibility

A6: Network Planning Enablement Visibility

A9: Value-Driven S&OP Flexibility

A11: Replenishment Model (STAR) Consistency

A17: Material Deployment Planning Responsiveness

B2: Trading Partner Relationship Mgt. Consistency

A13: TPM Replenishment (assumes SNC)

Visibility

Enables E2: Mkt. Suitability

Enables D5: QA/QC Scheduling and C6: PO Visibility & Mgt.

Enables A8: Net.

Planning Org.

Realign

Enables B3: Trading Ptnr. Order Mgt. & Com. and

B4: Order Efficiency & Indirect Materials VMI

Enables C6: PO Visibility & Mgt. and C7: Shop Floor Schedule Visibility

Enables C7: Shop Floor Schedule Visibility

LEGEND: Scope, Plan and Design ImplementationIn Progress

Capgemini ASE Environment


Approach: Strategy phaseStep 1 - Assess external landscape, stakeholders, opportunities, and value propositions

11

Purpose

Activities

Provides understanding of industry current state

Identifies business requirements and customer opportunities

Establishes business Value Propositions as basis to align Claims Operating Model with Enterprise Strategy

Assess External Landscape, Stakeholders, Opportunities, and Value Propositions

Provide external view of the industry, prioritize stakeholders, including internal and external customers, and identify value propositions that align with the defined corporate strategy. These define the aspirational capability requirements, which will be assessed against current capabilities to identify and prioritize gaps to be addressed through future processes and initiatives.

Identify and interview key stakeholders to gain understanding and buy-in

Identify key industry trends and leading practices that may impact business requirements

Interview/conduct focus groups with stakeholders

Identify business and customer requirements

Potential Benefits

Key Deliverables

Industry Trends and Leading

Practices Snapshot

Overview of relevant industry-specific trends and leading claim practices

Business Value Propositions (10-15)

Prioritized list of business requirements and customer opportunities

Value Propositions aligned with Enterprise Strategy, including solution definition and opportunities

© Copyright 2004 Archstone Consulting LLC

Confidential9

Requirement: Enhanced understanding and use of cost-to-serve leads to improved cost and margins

11 Client Case StudyClient Case Study22 Archstone Consulting 2003 Consumer Healthcare Supply Chain SurvArchstone Consulting 2003 Consumer Healthcare Supply Chain Surveyey

More than 50% of customers typically don’t contribute to profits

Costs for supply chain activities associated with different customers can vary by a factor of two

Assessment of “who are the best customers” and what it costs to serve them often changes dramaticallyas understanding of cost to serve improves

FACT: Although manufacturers view cost to serve as a critical foundational capability, few have integrated it into their

business decisions.

Poorly integrated into business decisions

Rarely used as a multi-departmental metric

Lack of agreement on cost-to-serve components undermines strategic customer understanding and profitability

Cost to Serve Capability is Needed to Effectively Tailor

Supply Chain Services for Profitable Growth

Customers

Cu

mu

lati

ve

Pro

fit

-100%+ profit200%+ profit 0% profit

-Marketing Expense

-Sales Expense

-Order Processing & Admin

-Credit Check

-Price Confirmation

-Deduction

-Returns / Unsaleables

-Order Resolution

-Replenishment

-Distribution

-Special Packing

-Invoice & Collection

-Transportation

A Robust Cost to Serve Approach Can

Improve Supply Chain Performance2

Robustness of Cost to Serve Approach

SC

Pe

rfo

rman

ce

© Copyright 2004 Archstone Consulting LLC

Confidential10

Requirement: Metric and organizational alignment between retailers and manufacturers will improve focus

FACT: CPG companies and retailers do not measure a common set of metrics1

11 Archstone Consulting 2004 Retail / Manufacturer Collaboration SArchstone Consulting 2004 Retail / Manufacturer Collaboration Surveyurvey

Category Development New Products Promotion Effectiveness Cost ManagementAssortment

Unique to

Manufacturer

Shared with

Retailer

Unique to

Retailer

• Sales Volume ($)• Velocity (Rate Of Shelf Movement)

• Incremental Profit To Total

Category

• Sales Growth ($)• Market Share

• Trial And Repeat Rates

• Order Fulfillment (E.g. On Time, Complete)

• Category Profitability

• Out of Stocks• Incremental Sales To Total

Category

• Sales Volume (Units)• Slotting Fee Potential

• Sales Growth (Units)

• Sales Volume ($)• Category Profitability

• Market Share

• Incremental Sales To Total

Category

• Sales Growth ($)

• Total Profit Dollars

• Customer Count

• Out Of Stocks• Incremental Profit To Total

Category

• Same Store Sales Trend

• Incremental Lift• Profit Dollars Per Linear Shelf Ft.

• Sales Per Linear Shelf Ft

• Sales Volume (Units)

• Velocity (Rate of Shelf Movement.)

• Retailer Profit Margin)

• Promotion Dollars Earned• Lift (Incremental Promotion

Volume)

• Incremental Profit To Total

Category

• Incremental Sales To Total

Category

• Out Of Stocks• Lift For Other Products Or

Categories (Cross Promotions,

Link To Loyalty Programs)


• Velocity (Rate of Shelf Movement)

• Same Store Sales Trend• Cost Per Incremental Case

• Order Fulfillment (E.g. On Time, Complete)

• Incremental Consumption (Vs.

Retailer Forward Buy)

• Sales Growth (Units)• Total Profit Dollars

• Sales Volume ($)


• Retailer Penny Profit Per Unit

• Velocity (Rate Of Shelf Movement)• Total Profit Dollars

• Category Profitability


• Sales Per Linear Shelf Foot• Profit Dollars Per Linear Shelf

Foot

• Out of Stocks

• Per Unit• Retailer Profit Margin

• Manufacturer Gross Profit

Margin

• Trial And Repeat Rates

• Same Store Sales Trend

• Average Cash Register Ring

• Sales Growth ($)• Incremental Profit To Total

Category

• Inventory Turns


• Total Profit Dollars• Return On Capital


• Retailer Dead Net Product Cost

• Category Profitability• Promotion Dollars Earned

• Lift (Incremental Promotion

Volume)

• Order Fulfillment (E.G. On Time, Complete)


• Inventory Turns

• Store Operating Expense

• Profit Per Employee

• Cost Per Incremental Case• Incremental Profit To Total

Category



… even in cases where common metrics exist, manufacturers and retailers define them differently



Approach: Strategy phaseStep 2 - Assess existing operations

12

Purpose

Activities

Identifies current capabilities and ongoing initiatives and maps them to business requirements

Aligns current capabilities and ongoing initiatives with required capabilities

Assess Existing Operations

Assess existing capabilities and initiatives and identify future state capabilities required to support Enterprise Strategy

Conduct key personnel interviews

Review process documentation and perform process walkthroughs

Catalog ongoing and planned Claims initiatives

Review selected claim sample

Identify future capabilities (governance, process, organization & technology)

Potential Benefits

Key Deliverables

Interview Observations

Key observations collected during interviews with implications for operating strategy

Identify quick-hit initiatives based on high value/low effort opportunities defined during initial assessment

Operational Capabilities Definition

• Detailed description of each capability, including:

• Required governance, process, organizational, and technology elements

• Major milestones

• List of key stakeholders



• Warehousing

• Logistics





Major Major



InputsInputs

• Product

Specifications

• Quantity

• Date Needed

• Ship To

Address

• Billing Address


hand• Production



Department

OutputsOutputs


management


the end consumer







• Receipt

• Bill of Laden

• Inventory

Update

• Delivery Date

• Production

Schedule

• Customers

• Email

communications

• Inventory on

hand



• Warehousing

• Logistics






• Warehousing

• Logistics





Major Major



InputsInputs

• Product

Specifications

• Quantity

• Date Needed

• Ship To

Address

• Billing Address

• Product

Specifications

• Quantity

• Date Needed

• Ship To

Address

• Billing Address


hand• Production



Department


hand• Production



Department

OutputsOutputs


management


the end consumer


the end consumer







• Receipt

• Bill of Laden

• Inventory

Update

• Delivery Date

• Production

Schedule

• Receipt

• Bill of Laden

• Inventory

Update

• Delivery Date

• Production

Schedule

• Customers

• Email

communications

• Inventory on

hand

• Customers

• Email

communications

• Inventory on

hand



Approach: Strategy phaseStep 3 - Identify capability gaps

13

Purpose

Activities

Identifies areas of focus required to develop future capabilities

Begins to define initiatives that can leverage current capabilities

Provides assessment of potential impact of change on Claims Operation

Identify Capability Gaps

Compare current capabilities and initiatives to requirements and future capability needs to identify gaps to be addressed by future initiatives

Identify gaps between current and future capabilities

Provide details surrounding nature, size, and impact of gaps

Potential Benefits

Key Deliverables

Capability Gap Analysis

Assessment of current capabilities

Considers initiatives either planned or in process during the gap assessment

Define a business process to incorporate ad hoc material requirements and automatically communicate and alert suppliers

40Y-NP

(1b) Ability to automatically identify and rapidly communicate material requirement changes internally and to partners and suppliers

Provide data visibility and network integration to automatically monitor partner and supplier inventory levels and build schedules and evaluate ability to support final assembly schedule

40Y-NN

(2) Ability to monitor and automatically communicate mismatches between partner assembly completion dates and final assembly need dates in single common view

Develop data model and standard business processes to automatically communicate material requirements and alert net changes across critical component suppliers

50Y-NP

(1a) Ability to automatically update and communicate a rolling forecast of system materials requirements across all partners and suppliers

Define a business process to incorporate ad hoc material requirements and automatically communicate and alert suppliers

40Y-NP

(1b) Ability to automatically identify and rapidly communicate material requirement changes internally and to partners and suppliers

Provide data visibility and network integration to automatically monitor partner and supplier inventory levels and build schedules and evaluate ability to support final assembly schedule

40Y-NN

(2) Ability to monitor and automatically communicate mismatches between partner assembly completion dates and final assembly need dates in single common view

Develop data model and standard business processes to automatically communicate material requirements and alert net changes across critical component suppliers

50Y-NP

(1a) Ability to automatically update and communicate a rolling forecast of system materials requirements across all partners and suppliers

Integrated Build Schedule Visibility (1 of 2)

Timely communication of production schedule and corresponding material requirements across partners and suppliers and monitoring of progress to plan





Capability ElementsCapability ElementsInitiativeInitiativeMeets Meets Reqs.Reqs.

Initiative Initiative Meets Meets Timing Timing NeedsNeeds

Capability Capability CurrentlyCurrently GapGap Gap DescriptionGap DescriptionCapability Capability

ScoreScoreInitiative Initiative Planned Planned

N = No Y = Yes P = PartialN = No Y = Yes P = Partial



Approach: Strategy phaseStep 4 - Define initiatives

14

Purpose

Activities

Identifies level of effort/cost required to move from existing operating model to target model

Prioritizes efforts to focus on areas where change can have greatest impact

Define InitiativesDefine and prioritize the effort/investment required to develop future capabilities

Define the effort required to develop future capabilities given current capabilities and existing efforts

Identify dependencies between planned initiatives and current initiatives

Prioritize initiatives based on achievability, organizational readiness, and financial impact

Potential Benefits

Key Deliverables

Capability Initiatives

• Include relevant milestones/deadlines, complexity definition, implications, and dependencies

• Assess cost, complexity, benefits, risk, time, change impact

BOM Creation and Management

Process AreaProcess Area


Product Development

Initiative IDInitiative ID # XXX

• Ability to define and maintain product

data attributes, manage their

associations with BOMs, and generate

Build to Package datasets as required

(1)


Initiative DescriptionInitiative Description

Existing Initiatives• AF-1: Initial ability to construct and manage the

BOM 04Q1• SE-3: 5700/SW logical PDM data model structure

403Q1• AF-4: BTP workflows 03Q1• AF-2: Ability to complete construction and mgmt of

a BOM 03Q1

Milestones• (1) XXXYYY – Q203

Decision/Implications•Assessment of plans is required as risk exists

in meeting need date and ensuring adoption

and use of PDM by all partners and suppliers

as significant resistance exists throughout the

program. (1)

Financial Impact Assessment•Benefit Group Product Dvlp Collaboration

•XXX Impact $159M - $477M

•YYY Impact $219k - $656k

• Initiative Impact High

•Cost $2.0M

Initiative Dependencies•BD1, BD3

• IT1, IT4

Complexity/Effort Assessment•Process 5 - Intl. Design

•Technology 2 - COTS Config.

• Integration 5 - Intl. External

•Duration 4-6 months

Gap: Timing

• Gap exists as current initiative plans deliver

capability past timing need. Current

program plans have been defined to

accommodate delivery of this capability by

MM/DD/YY. For improved BOM mgmt,

integration is required between PDM and

manufacturing, support, and key partner

and supplier systems. Associations of BTP

datasets with BOMs and WBS are

required. (1)

• Although this is a capability that is primarily

enabled in the PDM system, data model of

all required program business objects is

required, and interfaces between the

systems that contain the relevant data

must be developed.(1)

Gap DescriptionGap Description

Focus: TechnologyFocus: Technology

1=low - 5=high

Description – The gap for this capability element is a timing gap as current initiative plans deliver the capability past the timing need date (at MM/DD/YY); for improved BOM management, integration is required between PDM and manufacturing, support, and key partner and supplier systems; associations of datasets with BOMsand WBS are required

Process – Assess process scope, implementation timing and resources

Technology – Assess technology scope, implementation timing and resources

Organization and Training – Assess organizational scope and impact

Initiative Prioritization

• Prioritize initiatives to guide resource allocation and timing

• Perform readiness assessment to determine the achievability of the initiatives

22

DRAFT

Prioritising the e-Business Initiatives

Initiative

1. e-Buying (incl. leveraged catalogues)

2. Buy-Side Auctions

3. Collaborative Purchasing

4. Supplier CPFR

5. Supplier Inventory Management

6. Collaborative Product Development &

Introduction

7. E-Settlement (Buy-Side)

8. Content Management

9. Knowledge Management

10. HR Self-Service

11. E-Recruitment

12. eLearning

13. Statutory Compliance: Government

Returns

14. Logistics & Transportation Collaboration

15. Item Catalogue

16. Retail Exchange Participation

17. Private Exchange Participation

18. Customer Portal (eCRM)

19. Web-Enabled Call Centre & Email

Response Systems

20. Field Sales

21. E-Settlement (Sell-Side Customer)

22. Retailer Auctions

23. Sell Side Auctions

24. Promotions Management

25. Customer CPFR

26. Consumer Insight: Collaboration With

External Parties

27. Direct to Consumer Propositions (own /

participation in external props)

28. Investment in Buying Consortia

29. Investment in Retail Exchange

e-Business Initiatives and Prioritisation Scores:

Business Value Ease of Implementation

11 19

16.5 30

16.5 30

10 18

6 21

7 17

5 19

13.5 19

15.5 8

9 17

7 23

8 20

4 30

11 23

15 16

13 17

11 17

15.5 15

11 16

8 17

5 19

7 26

6.5 22

16 19

13 16

13 14

7 14

5 25

9 17

Ease of Implementation

Bu

sin

ess

Val

ue

&

Str

ateg

ic Im

per

ativ

e

Question/

Redesign

Accelerate/

Invest

Tactical/

DiscretionaryKill

High

High

Low

Low

5 17.5 30

2

10

18

1

23

19

4

5

6

721

8

9

1029

11

12

13

14

15

17

18

20

2223

24

2526 16

27

28

Illustrative Framework

Prioritizing Supply Chain Initiatives

Supply Chain Initiatives and Scores



Approach: Strategy phase Step 5 – Develop roadmap and use case for technology

15

Purpose

Activities

Develops means to prioritize key investments and initiatives going forward

Creates a plan that allows company to complete initiatives at a comfortable pace for the organization

Develops alignment across the organization to enhance change acceptance

Develop Roadmap and Use Case for Technology

Develop prioritized and sequenced roadmap of initiatives to guide design and implementation activities; create financial and strategic business case which shows alignment of Enterprise Strategy and Claims Operating Model along with financial impact/benefits

Develop roadmap of the prioritized initiatives that focuses on realizing value

Develop use cases for potential technology solutions

Identify vendor options

Potential Benefits

Key Deliverables

Roadmap

• Includes current projects and future initiatives, allowing management of resources, costs and priorities through implementation

• Identifies quick hit opportunities

• Highlights potential “breakthrough” opportunities

FY12 FY13 FY14 FY15

Value Cost Q3/Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Comments

Initiatives*

Automation of Payments (TradeCard) C $ 500K Automate payments between Coach and SPs

JDA Manugistics Upgrade S $ 400K JDA technical upgrade

Inventory Visibility S $ 1.9M Provide visibility to inventory ownership

Visual Merchandising Planning Implementation S $ 1.5M Improve flow of VM through multiple DCs

Supply Chain Analytics (BI) S $ 3.0M Build reporting environment for Supply Chain

Supply Chain Collaboration – Finished Goods G $ 10M BOM / Costing, PO tracking, samples, QA collaboration

Warehouse Management Program – HW/SW Upgrade S $ 2.6M WM hardware and application upgrade

29. Contact Center Integration and Management S $ 200K Process and staffing model to manage call routing & events

28. Integrated Strategic Trade Management C $ 3.3M Systematic management of trade information & updates

6. Total Cost of Ownership Model Development and Analysis C $ 200K Definition and data to calculate costs for decision support

19. Electronic invoice and shipment notification enhancement S $ 800K Expand EDI to support all international invoicing

7. Purchase Order Assessment G $ 900K Document PO types and requirements, identify options

1. Forecasting Assessment G $ 500KSupply Chain requirements and options to increase demand plan details

27. Logistics Strategic Sourcing C $ 100K Tools and process to periodically resource global logistics services

Global Inventory Deployment (DRP)12. Global Inventory Deployment

13. Enable Global Inventory DeploymentG $ 500K

$ 5.3MProcess to balance variables to get product to right locationTech. to execute right place, right quantity, first time process

2. Develop Preferential Sourcing Process and Integration C $ 200K Product placement decision making process, integrating FTA and TCO

16. Network Wide Visibility S $ 1.8M Manage movements between Coach and all external partners

8. Enhance MRP C $ 2.4M Extend MRP to account for demand volume changes/enhance

Regional Inventory Deployment (DOM)14. Regional Inventory Deployment

15. Enable Regional Inventory DeploymentG $ 800K

$ 7.5MManage inventory consumption across orders from all channelsSystematically evaluate next best order for inventory consumption

Transportation24. Transportation Management Process Development

25. Enable Transportation Management ProcessG $ 500K

$ 3.95MProcess & org. to define/optimize shipments & transit timeRules led system to support shipment process

Warehouse Operations20. Global Warehouse Operations

21. Warehouse Process Improvement22. Value Added Services Improvement

S$ 900K$ 500K$ 100K

Enterprise WM with slotting, etc.Efficiency through processes improvements & org. changesProcess to continuously evaluate value add services across network

3. Rough-cut Supply Capacity Planning and Optimization C $ 2.4M Criteria & process to technically enable supply plan/options

4. S&OP Process Development C $ 200K Escalation process & structure for supply/demand conflicts

Totals $ 33.1M $ 10.7M $ 16.4M $ 3.6M

Malaysia live, Korea live, Korea ICH

Move ADCWC DC live

EDC live

LEGEND: Both, Technology & ProcessProcess Technology

Financial Quarter

GLS Roadmap: Wave I

*Italicized initiatives are current or planned; costs not included in totalsValue Key: C – Cost, G – Growth, S - Scalability

Use Cases Key processes used to comparatively evaluate the fit of potential technology solutions



Sample Strategy Phase (Claims Diagnostic Review) team structure

Please note: Capgemini staffing is subject to availability of consultants at project start and is considered in close coordination with the client

Key

Insurer Client

Capgemini

Professional profiles of key Capgemini resources are included on subsequent pages

Insurer Client

Project

Workstreams

Engagement

Oversight

Insurer Stakeholders

Consumer & Commercial

Claims and Operations

Business & IT

team members

Insurer Engagement Owner

TBD

Insurer Project Manager

TBD

CDR Project Lead

Engagement Executive

Mark Nobilio

Claire Louis

Identify Opportunities &

Initiatives/Create Roadmap

Assess Current

Operating Model

Gap Analysis & Target

Operating Model

Organizational Change Management Specialist, BTI Analyst, Business Analyst


Key assumptions for Strategy Phase: Claims Diagnostic Review (CDR)

Key Assumptions

Typical timeframe for execution of the Strategy Phase (Claims Diagnostic Review) is 4-6 weeks, however, engagement duration will vary based on mutually agreed scope and data analysis required.

The project work usually takes place at the client site four (4) days a week.

While the project work will generally take place at the client site, certain project activities such as documentation and analysis of collected information and project artifact and deliverable creation may be performed from a Capgemini Consulting office.

From a project logistics standpoint, Capgemini Consulting assumes that the client is committed to the following responsibilities:

The client will provide rooms with appropriate infrastructure and communication facilities (project office).

The client will furnish a dedicated project team.

The client will select the participants for the focus interviews and be responsible for timely arrangement of appointments with people to be interviewed, providing their contact details (name, e-mail, phone number)

The client will arrange for meeting rooms, invite participants to meetings, define the contacts in the client organization, and run the global data collection process.

Further, the client will be responsible for validating and aligning the project results throughout the course of the project.

In the event that the client desires to leverage the Capgemini Accelerated Solution Environment (ASE), for visioning, there is an additional daily charge for fees and expenses. If requested, Capgemini will provide fee estimate with and without optional ASE costs based on expected number of participants and ASE days.

A mutually agreed Statement of Work (SOW) will be signed prior to commencement of the engagement including all relevant Terms &Conditions.

This is not a complete list of Assumptions.


Representative Profile: Mark Nobilio

Practice

Office

Role

Name

Consulting Competencies

Digital Transformation Business Transformation Insurance Business Operations Underwriting Effectiveness Claims Technology & Process Innovation User Experience Design Policy Administration & Claims Re-architecture & Solutions Business Solution Delivery IT Strategy & Innovation

Industry and Project Experience (Selected)

Business Experience

Senior Insurance industry executive serving various clients in a broad range of services including business strategy, business operations, transformation, and technology innovation

Digital Transformation and Business Transformation services Extensive collaboration/partnering experience with large Insurance

clients to drive significant business transformation agendas to reduce cost, improve efficiency, enhance product portfolio, devise innovative business solutions, and provide seamless customer experience

Over 25 years top-tier professional services consulting with over 20 years of Insurance industry expertise partnering with Insurance companies to inject innovation and technology solutions to enhance business performance.

Developed a multi-year transformation roadmap for a specialty insurer for alternate customer transformation. Roadmap outlined a 4-5 year time horizon to transform from low-volume, high-premium to high-volume, lower premium. Implemented Automated Renewals based on Straight-Through Processing technology and later leveraged for New Business low-touch policy quoting/direct placement to improve operating costs and eliminate need for increased staff.

Led in the development of Claim Reengineering strategy for a large Insurance client including claims components, re-engineered features, claim workflow, advanced assignment, user experience design for claims handling, re-architecture of legacy system components, and addition of predictive analytics to drive efficiency and proactive claim management and improved outcomes.

Developed Next Generation Policy Administration re-architecture strategy and roadmap for a large personal lines carrier. Roadmap included development of new functions and features for policy servicing as well as roadmap costs for development and enhancement of the business transformation.

Facilitated Digital Transformation engagement for Customer Service Portal solution for a major personal lines insurance carrier. The new User Experience (UX) Design improved self-service capabilities and reduced operational costs.

Implemented Predictive Analytics Scoring Engine for a major P&C insurance carrier to support best practice U/W improving premium lift by 3% .

Developed an International Digital Strategy and Roadmap for a large international P&C insurance carrier to support a new B2C business model.

Developed 3-year Digital Roadmap for large International Life company.

Mark Nobilio

VP, Insurance Industry Leader

New York, NY

Strategy & Transformation

18

Representative Profile: Claire Louis

Practice

Office

Role

Name

Consulting Competencies

Insurance Business Operations Business Strategy and Transformation Claims Process Innovation Claims Re-architecture & Solutions Claims Cost-Containment, “leakage” Litigation management

Industry and Project Experience (Selected)

Business Experience

Senior insurance executive with extensive insurance claims experience in direct claims, reinsurance, corporate risk management, brokerage, third-party claims administrator, accountancy, and consultancy domains

Developed, implemented, and evaluated policies, procedures, processes, controls, and client services standards for ins. claim ops.

Designed and oversaw claim programs for large commercial accounts, including vendor selection, monitoring, and performance measurement

Insurance claim processes, internal controls, service standards

Collaborated with policyholders and insurers to develop and enhance claim programs, including claim administrator selection and oversight, claims handling best practices, performance metrics, and performance monitoring tools

Redesigned claim processes, policies, and procedures for large, self-administered municipality

Performed regulatory compliance readiness/alignment review for public entity and educational institution insurer

Claims cost-containment

Developed, helped implement, and managed the insurance claims programs of a multi-billion self-insured organization, resulting in reduced loss costs

For TPA of legacy Lloyd’s, AIG, and CNA long-tail claims, developed, oversaw, and managed policyholders’ national litigation programs

Performed claims leakage study for mutual insurer

High-severity commercial claims

As Head of Claims for a construction insurance brokerage, collaborated with clients to develop and enhance claim programs, including TPAselection and oversight, claims best practices, performance metrics, and performance scorecards

As Claims Manager for a multi-billion dollar global petrochemical manufacturer, developed a performance management and incentive program to help improve TPA claim outcomes for worker’s compensation and general liability claims through more focused litigation management and settlement efforts

Claire Louis

Managing Consultant

New York, NY

Strategy & Transformation

19The information contained in this document is proprietary. Copyright © 2015 Capgemini. All rights reserved

Contact:

Claire LouisManaging Consultant, Insurance NA

508-415-7628 mobile

[email protected]

623 5th Avenue, 33rd FloorNew York, NY 10022

Mark NobilioVice President, Insurance NA

908-229-9553 mobile

[email protected]

623 5th Avenue, 33rd FloorNew York, NY 10022

mailto:[email protected]

mailto:[email protected]

capgemini consulting claims ops model alignment program 3 13 2015

Documents

claims process

claims management

customer preferences

new claims systems

accurate claims data

optimized claims costs

customer data management

efficiency of claims