In 2002, despite periodic investments to upgrade the HP 3000 mainframe that hosted the core insurance applications as well as the accounting and management information* systems, it still frequently broke down. According to James Kang, CIO at Income, "The system breakdowns were a real nightmare. Work would stop and the staff had to choose either data reconciliation, or backup. However, the HP 3000 backup system allowed restoration only up to the previous day's backup data. If the daily backup was not completed at the end of the day, the affected day's data would be lost, and costly and tedious reconciliation would be needed to bring the data up-to-date." In one of the hardware crashes, reconciliation took several months to restore the data loss. In all, the HP 3000 system experienced a total of three major hardware failures, resulting in a total of six days of complete downtime.
That was not enough. The COBOL programs that were developed in the early 1980s and maintained by Income's in-house IT team also broke multiple times, halted the systems, and caused temporary interruptions. In addition, the IT team found developing new products in COBOL to be quite cumbersome and the time taken to launch new products ranged from a few weeks to months.
At the same time, transaction processing for policy underwriting was still a batch process and information was not available to agents and advisors in real-time. As a result, when staff processed a new customer application for motor insurance, they did not know if the applicant was an existing customer of Income, which led to the loss of opportunities for cross-product sales. Commenting on the problems faced by the agents, Kang said, "When the agents tried to submit the documents using notebooks, they ran into a lot of problems. HP 3000 was a terrible machine to connect to such devices. And with more of the advisors telecommuting, availability became an issue too." In addition, various departments did not have up-to-date information and had to pass physical documents among each other.
All this changed in June 2003, when Income switched to the Java based eBao LifeSystem from eBao Technology. The software comprised three subsystems - Policy Administration, Sales Management and Supplementary Resources. Commenting on its features, Kang said, "It has everything we are looking for - a customer-centric design, seamless integration with imaging and barcode technology, a product definition module that supports new products, new channels, and changes in business processes."
Implementation work started in September 2002 and the project was completed in nine months. By May 2003, all the customization, data migration of Income's individual and group life insurance businesses and training were completed.
The new system was immediately operational on a high-availability platform. All applications resided on two or more servers, each connected by two or more communication lines, all of which were "load balanced." This robust architecture minimized downtime occurrence due to hardware or operating system failures.
As part of eBao implementation, Income decided to replace its entire IT infrastructure with a more robust, scalable architecture. For example, all servicing branches were equipped with scanners; monitors were changed to 20 inches; PC RAM size was upgraded to 128 MB; and new hardware and software for application servers, database servers, web servers, and disk storage systems were installed. Furthermore, the LAN cables were replaced with faster cables, a fiber-optic backbone, and wireless capability.
In addition, Income also revamped its business continuity and disaster-recovery plans. A real-time hot backup disaster-recovery center was implemented, where the machines were always running and fully operational. Data was transmitted immediately on the fly from the primary datacenter to the backup machines' data storage. In the event of the datacenter site becoming unavailable, the operations could be switched quickly to the disasterrecovery site without the need to rely on restoration of previous day data.
Moving to a paperless environment, however, was not easy. Income had to throw away all paper records, including legal paper documents. Under the new system, all documents were scanned and stored on "trusted" storage devices - secured, reliable digital vaults that enabled strict compliance with stringent statutory requirements. Income had to train employees who had been accustomed to working with paper to use the eBao system and change the way they worked.
As a result of adopting eBao Life System, about 500 office staff and 3,400 insurance advisors could access the system anytime, anywhere. Staff members who would telecommute enjoyed faster access to information, almost as fast as those who accessed the information in the office.
According to Kang, "We got a singular view of every customer - across products and channels and even better life and general insurance business lines. That allowed us opportunities to cross-sell and improve customer service. In addition, because of the straight through processing workflow capabilities, we had 50 percent savings on both the time and cost needed to process policies. We had also cut the time needed to design and launch new products which was reduced from weeks to just days using the table-driven rule-based product-definition module."
Commenting on the benefits of eBao system, the former CEO Tan Kin Lian remarked, "eBaoTech LifeSystem has the best straight through processing workflow and it is very flexible. It cuts our new product launch time from months to days. It also allows us to support agents, brokers, and customers to do online services easily. I got a fantastic deal: the best system with much lower cost and much shorter implementation time. I have to say that this is a revolution!"
Sources: Melanie Liew, Computerworld, July 2004; "NTUC Income of Singapore Successfully Implemented eBaolech Lifesystem," ebaotech.com, accessed November 2008; Neerja Sethi & D G Allampallai, 'NTUC Income of Singapore (A): Re-architecting Legacy Systems," asiacase.com, October 2005