Business Process Modelling
The following process model can present the insurance claim process effectively as it starts from the claim made by the customer while ends with the payment to customer or rejection:
Figure 1: Manual version
From the above process model, it can be determined that the insurance claim process is the process to assess a claim and make payment to the customer or reject it for the specific reason. In this the payment amount will be calculated in the final step and a follow-on process will be used to make payment to the customer. On the other hand, it is also possible to send the rejection letter when the calculated amount is zero. But it does not reflect when the amount of claim is high.
For handling high amount of claim, the below process model can be used:
Figure 2: Signavio version
In this process version, there are four easier tasks (along the top row) that are seprated from the two harder tasks (on the bottom row). This process model shows that top row path includes two specific gateways to check the decisions whether special process is needed. It can be helpful to determine the team effectiveness.
Most of the claims less than or equal to 10000 dollars are handled by the claim handler while remaining ones are handled by the senior claim handler (Signavio, 2018). At the same time, the claim handler also checks whether there is need of special processing by the senior claim handler. These roles are defined in this process model as they are not organisational roles.
The below four areas need to be improved in the existing insurance claim process of the company:
Mobility: In order to improve the existing insurance claim process, there is need to incorporate mobility by using mobile devices and applications. The use of mobile devices and apps can be significant for the customers to push information and service capabilities faster.
The improvement in this area may be helpful to improve customer experience and supportive for personnel involved in the insurance claim process to work faster and more efficiently (Raghupathi & Raghupathi, 2014). The claim officer can use mobiles and apps to inform the customer about the claim acceptance or rejection.
Collaboration: There is need of expertise in high performance claims processing. For this, it is necessary to get the right information to the right people on a timely basis. It requires for integrating claims adjuster calendars with the claim officers to ensure the immediate access to all information required to service the claim (La Rosa et al., 2013).
Analytics: The use of effective analytics can be significant for performing high-speed sorting operations. It can be used to make rapid payment to the customers while sending more problematic and complex claims to further investigators.
The use of analytics can be useful to identify potential fraud by investigating the large data including claim data and fraudsters, customer call centres and social media networks (Srinivasan & Arunasalam, 2013).
Automation: It can be effective to introduce automation in the existing insurance system. It is because the firm uses manual recoding for each rejection and acceptance of claim after assessment of claim.
The focus on automation can be helpful for the firm to make the insurance claim faster and efficient. In addition, it will also be useful to timely address the claim operations. It can be significant to help the firm to automate the functions and handle multiple clients timely (Suriadi et al., 2013).
In the existing system, there is no tracking system to determine the progress regarding claim assessment. But the focus on automation area can be helpful to track the progress between intermediaries and better manage the claim process.
An organization can use business process re-engineering as a management strategy that allows for improving business processes and the workflow designs. A reengineering process can be helpful for the organization to achieve customer satisfaction with the quality output processed with the cost effectiveness.
It also involves the assessment and redesigning of the business processes and workflows in the organization. It allows the organizations to rethink and redesign the existing processes and methods and adopt new technologies to get competitive advantage.
A business can decide the implementation of a reengineering process due to its components including rethinking, radical redesigning, improving dramatically and measuring performances (Feldmann, 2013).
All these components are required to analyse and implement required changes. It is important for the firm to implement a reengineering process to bring clarity and refinement in the desired goals and objectives from mission statement to customer satisfaction.
It is helpful to examine the action performed till date and compare with what can be done and what should have done. Through reengineering process, it can be possible for a firm to re-familiarize the goal statement and perform in appropriate direction to achieve the goal (Elzinga et al., 2012).
Apart from this, an organization can use the reengineering process to streamline operations and make the work flow simpler. It can help the firm to redesign the business processes in simpler and shorter tasks. It can be easy for the employees to adopt sorter ways to perform the tasks and achieve the work efficiency.
The timely and efficiently accomplishment of the tasks can be effective to increase the employee satisfaction as well (Rao et al., 2012). Even, it also adds value through implementation of new technologies to adopt cost effectiveness in operations.
Moreover, the reengineering process is helpful to increase efficiency as employees are able to complete the required tasks in more time available that will lead to efficiency. Additionally, the firm can adopt reengineering process to make better products and services for the customers.
Focused goals and efficient work though this process enables the firm to develop better place to work and get better results in terms of advanced and quality products and services.
Effective communication and production allows the firm to improve the quality of the products and services. The use of reengineering process is also significant to enhance customer satisfaction and increase revenues and profits of the firm through better offerings and reduction in operational costs.
Better service and products are also effective to develop strong brand position in the market and persuade the buying behaviour of the customers positively (Altinkemer et al., 2011). In addition, the consideration of reengineering process can be significant for the organization to maintain competitive advantage by making the product development and increasing customer satisfaction.
Following methods can be used to implement a reengineering process:
Hammer/Champy method: According to this method, the business process reengineering is helpful in improving jobs and structures, business processes, values and beliefs and management and measurement systems. This method focuses on IT to implement business process reengineering as there is need to develop a powerful solution and then seek the problem that can be solved.
Reengineering process can be implemented with focus on innovation rather than automation by recognizing the new capabilities of technologies (Mohapatra, 2012). This method considers poor management and unclear objectives as key restrictions in the implementation of reengineering process. According to this method, following steps can be used to execute the reengineering process:
- Introduction into Business Reengineering
- Identification of Business Processes
- Selection of Business Processes
- Understanding of Selected Business Processes
- Redesign of the Selected Business Processes
- Implementation of Redesigned Business Processes
This method focuses on the fundamental rethinking and radical designing of business processes for improving in the performance measures including speed, quality, service and cost.
In addition, this method is effective to reduce the possibility of errors in business process (Yu, 2011). But at the same time, it does not focus on the problem initially that may cause wastage of resources and may cause delay in execution.
Davenport’s and Short’s method: This method also focuses on IT role in execution of reengineering process like Hammer/Champy method. It should be considered while implementing this process. But at the same time, it considers the organisation and human resource as the change agent in the implementation of the reengineering process.
However, it also focuses on the use of traditional management approaches like planning, directing decision making and communicating as continuous process improvement (Weerakkody et al., 2011). It includes following steps in implementing the reengineering process:
- Develop Business Vision and Process Objectives
- Identify Processes to Be Redesigned
- Understand and Measure Existing Processes
- Identify IT levers
- Design and Build a Prototype of the Process
But, this method can be time consuming due to consideration of continuous improvement process and make delay in the implementation of reengineering process.
Process Analysis and Design Method (PADM): This method focuses on continuous process improvement by considering the joint design of the technical subsystem and the social subsystem as both supports to each other. It brings the optimization in efficiency and job satisfaction and motivation (Goksoy et al., 2012).
There is need to develop link between the support technology and the organization to implement the reengineering process. It includes four steps for the execution of reengineering process:
- Process Definition
- Baseline Process Capture and Representation
- Process Evaluation
- Target Process Design
This method provides flexibility and adaptability to make changes and can be used for wide range of projects. But it does not include the creation of vision or learning to perform other organizations’ similar processes. In addition, this method does not include a process selection activity (Van Der Aalst et al., 2016).
Object-oriented Method/ Jacobson’s method: This method is used for the development of software systems. It is better way to recognize the object orientation to execute the reengineering process successfully. It includes reverse engineering and forward engineering for the implementation of the process.
In reverse engineering, the existing organization is taken as case to identify the abstract model of the business and process while in forward engineering; the new process is designed in new company (Jeston & Nelis, 2014). It includes following steps to implement the reengineering process:
- Reversing the existing business
- Engineering the new business
- Installing the new business
It is significant in identifying future scenarios to predict the effect of changes and listing risks critical success factors. It may help to reduce the cost and chance of failure. It does not based on strategic formulation so a vision cannot be framed without knowing strategy and the existing business cannot be understood. But it may be complex and difficult to adopt the same practices for an organization to another (Wang et al., 2010).
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