21.1 Merging IT at CusCo CusCo has been providing insurances to businesses for more than 20 years. They have been around for a long time and they really know their customers. This deep understanding of customers and ability to offer the right products have resulted in increasing revenues over the past 10 years. However, with the emergence of new digital companies, they are finding it harder to attract more customers. Seeing a potential for growth, they wish to get more digital clients. Tom, CEO of CusCo has invited his friend, Oliver a business analyst, to sit down with the management team and discuss the issue. Below you will find a summary of the meeting. Lisa, head of sales says: We know our regular customers. When we get a lead, we know exactly what to offer and have a very high lead to quote ratio. However, when discussing with digital firms, we simply dont have the same ratio. Traditional businesses and digital firms have basically the same needs but its the process of getting leads to signed clients that is different. We have our own IT system for our regular clients and we bought out one of our competitors to gain more digital expertise. They have their own IT system that is more digital, and we cannot afford to have parallel systems. We need to find a way where we have one common IT structure that serves all our customers. Tom added the following: Yes, we feel that by merging the two worlds a more efficient operation will improve our profitability and quality of service. Mary, process owner, continues: In essence, our process for regular clients begins with us seeking out potential customers. We visit them and book a time. In our preparation, we look at all the available information we have about them, look at what kind of business they have, compare them to other clients that are of similar size, owner structure, markets, profitability and so on. Well prepared, we conduct a first meeting. At this meeting, we discuss how we can improve their businesses. Then we wait for the client to think about our offer. Either they get back to us or we contact them to discuss the offer. If they are interested, which is often the case, we usually negotiate and finally prepare a contract, and have it signed. We also give the customer a specially made gift of medium value to create a sense of a promising relationship. Digital is quite different. The work with getting leads is all about online marketing, SEO, getting earned media by writing blog posts, guest blogging, creating white papers, attending conferences, networking and so on. Compared with our regular customers, its quite impersonal. We then wait for enquires to materialize. This is done by the marketing team. Then, the marketing team forwards good leads to the sales team. Usually one out of 10 requests is serious enough to pursue. Unfortunately, we dont always know which ones to pursue so we spend more time than we want on inquiries that just do not lead to anything, sometimes not even a response. It is a waste to prepare offers that just disappear. However, one in 20 responds to our standard offer. Our offers are standard, so they dont really hit the target. It is more a volume business rather than quality. We send the offer as a pdf and also online (link to a webpage). Once the client receives the offer, usually valid for a month, we wait for their response. They can either, print and sign the documents, or they can sign the document digitally via the web form. Then we prepare and enter the contract in our internal system and send the invoice. However, it is not until we get payment for the premium, that we see them as clients. Unfortunately, some payments stop after a few months and in such cases, we have to chase them. On a case by case method, we decide either to pursue the matter or just cancel the insurance and send notification. Kevin, IT manager, remarked the following: Our sales force that targets regular clients use simple paper and Power Point. We have one system where all the contracts are stored, and they use this system (CNTR) to find comparable clients for their preparation. Once the contract is signed, it is stored in this system and the details about what kind of insurance, payment schedule, bank accounts and so on are entered in our system called OPER. We get bank statements (we use several banks) daily. Operations check these against a report that OPER created (report stating what payments are to be received) and someone checks those payments and changes the status to ok. Both CNTR and OPER operate only in our domestic market. The digital IT structure is different. It is basically all online. They have an online system called INSU that generates, stores and updates insurance contracts. Once a lead comes in, the basic data about the potential client such as name, location, business, size etc. are entered into INSU (once the sales triggers it) and a contract is generated and sent automatically to the potential client. If the client accepts the contract, it is then exported (manually) and entered into a system called AUIN. This system is the same as OPER built in-house with web interfaces. Robert, one of the senior business support staff, explains a bit more about the current state. Our operation is quite stable and efficient for the regular clients. It has many manual routines but as the cases are few, it is manageable. The quality is very high, and we seldom get any errors or any consequences of wrong data. However, we are at our capacity. We simply cannot handle more clients without increasing the staff. Our staff is very experienced, and most have been here for years and know the clients well. For the digital clients, the operation manages larger volumes. The number of cases per employee is 64 for digital as compared to 24 for regular. On the other hand, the error rate is about 8% for digital as compared to 0.5% for regulars. The staff is also less experienced as many are young graduates or students who view their job as temporary. On top of that, we see that the younger generation is more carefree. They have problems coming to work and when we call them, they say I am having a bad day. Our regular staff has a deep sense of responsibility and only stays home when they are really ill. Maria, working in IT, and Sven, working with business support, made the following comments: We have IT systems that are designed more to store things rather than manage or support a process. That makes the manual steps ever present which more or less limits expansion. This is somewhat true for both regular and digital. In the case of digital, I feel we have quite high expenses related to data error. We had a consultant sit down with us to map the processes of both regular and digital side, but he never finished the work. I will send you the material we have from that work. Alvin, head of marketing, remarked: I just want to say something here. I agree with the comment about systems being more storage oriented and that is quite problematic for me. For the regular clients, I can take static reports but not on what I really want. For the digital, I can take reports but not as deep as I want. I need to be able to do some data mining to understand which leads are better, how to approach certain clients, what different industries have in common and so on. I need to get better data for my metrics but now, I have no idea of what reality is, as I go on indications. Rudy, head of finance, agreed and said: True, I also want more data than I can get. However, I want to make it clear that we have good profitability but not that much to invest right now. We simply could not invest millions in a new IT project. We have just bought another company and we will need at least 6 months before we make any y investment which will be gradual rather than sudden. It would be best if we could start getting some money back from the investment as we progress, rather than at the end of the project in two years. Tom, chairman of the board, concluded the meeting by saying: Its quite obvious that we need to find a way forward. We want to attract and develop a regular client base in the Baltics and get significantly more digital clients in our domestic market. We can enhance one of our existing systems to incorporate the other one, create a new one from scratch, buy a new one or go with a SaaS solution. We need to reduce our operating costs. I am sure there are more benefits we could gain. How have the others solved this? We need to address this. Oliver, can you help us? Oliver, senior business analyst, responds: Sure, I think I can be of help. Let me give this matter some thought and present a plan. Exercise 1: Based on the information presented above, prepare a business analysis plan that outlines how you would conduct the analysis work. In this plan, include at least the following aspects: 1. Brief description of the background and the perceived problem. 2. The objective of the analysis work what is the analyst expected to deliver. 3. The preliminary business need(s). 4. Scope of the change initiative you are to investigate. 5. Main activities you see needed to be performed and main deliverables. 6. Aspects that affect the complexity of the analysis work. Exercise 2: In the introduction of the case, stakeholders have been introduced. For this exercise, please answer the following: Identify the stakeholders. Analyze the stakeholders (attitudes, power/influence versus impact). Outline a preliminary stakeholder communication plan. As mentioned before, a consultant had done some work. The results of the consultant in regard to mapping the processes are as follows.