Company
Background
The Van Ameyde
Group
specializes in
international
claims and
risk
management for
major
international
insurance
companies,
captives and
brokers,
government
agencies, and
corporate and
industrial
clients
including the
energy sector,
the shipping
industry,
ports and
terminals.
Business
Scenario
Van Ameyde
represents
clients
throughout
Europe,
providing
back-office
services,
financial
management of
claim
portfolios
including
recovery, and
handling the
entire claims
process.
Today, Van
Ameyde
operates
directly in 16
European
countries and
manages the
claims
handling
processes for
approximately
350 insurance
companies.
Process
Optimization:
In 2008 Van
Ameyde
recognized the
need to
optimize their
claims
handling
process in
order to grow
the business.
The objective
was to obtain
full control
over all
claims
resolution
processes in
order to
provide
customers with
the best
service and
transparency
levels in the
market.
New Claims
Processing
System: To
accomplish
their goal the
business
embarked on a
new claims
handling
system called
ECHO -
European
Claims
Handling
Optimization.
ECHO Key
Objectives
Business
Agility: The
business, lead
by the CEO,
specified the
project was to
leverage a
business
process focus
for the
delivery of
the ECHO
application
supported by a
service
oriented
architecture,
in order to
enable
continuous
modification
and alignment
with the
business,
allowing for
future changes
to be easily
implemented
supporting the
company's
planned
growth.
Cost
Reduction:
Optimize IT
costs by
building a
unified
web-based
business
application to
replace 10
different
independent
systems that
were being
used by each
company's
branch to
handle claims.
Information
Access: Make
information
available to
all employees
across Europe
and to create
a virtual
European
claims
organization.
Flexibility:
Provide
employees with
standard
business
processes and
the
flexibility to
support local
legal,
language and
fiscal
requirements;
as well as
client
specific
processes.
Speed:
Reduce the
time-to-market
for
establishing
new clients to
days.
ROI
Optimization
and Growth:
Upon go live
the business
saw immediate
business
optimization
results in the
company's
claims
processing
business.
Additionally,
as a
differentiator,
the ECHO
system quickly
became a
powerful sales
and market
expansion
tool.
The
business
impact was
immediately
evident with a
30% reduction
in the time
required to
resolve a
claim. In
addition, due
to the new
system's
well-defined
processes, the
company has streamlined
its ability to
open new
branches to
less than one
week, a three
to four-fold
improvement
over the old
system.
Flexibility:
ECHO allows
for the
offering of
customized
claims
processing for
new customers-
something that
was not
possible with
the old
system.
The ECHO
system
supports 16
different
countries and
their unique
claims
handling
requirements,
all delivered
from one core
system. The
application is
delivered in
12 different
languages and
six
currencies.
The ECHO
system
provides the
critical
flexibility
needed to keep
up with
company growth
and regulatory
change in
operating
countries.
Time-to-Market:
With ECHO in
place, Van Ameyde works
on six-week
release cycles
(every two
sprints) and
is able to
deliver a new
complex
requirement in
20 days or
less.
ROI Based
Prioritization:
Every new
major feature
request (i.e.
those that are
estimated at
over 16 hours
or that spawn
different
systems,) is
put through a
cost/profit
analysis,
where the
amount of time
that the new
feature will
save in the
overall claims
handling
process
(whether by
automating or
reengineering
a process or
feature) is
estimated.
This estimate
is matched to
the number of
running
processes and
the time it
currently
takes to do
that
operation.
This technique
is highly
accurate since
the profit
analysis and
change
simulation is
based on real,
running
processes.
Project
Capsule
Timeline:
The
European
Claims
Handling
Optimization
(ECHO) project
was initiated
and funded by
the Van Ameyde
business. The
original
project was
launched in
2006 with the
first
production
system
delivered in
2008. The
first
implementation
was a 'big
bang' due to
the complex
integration
requirements
with SAP and
other core
applications.
Size: The
application
has over 5000
function
points with
approximately
430 web pages,
over 900
database
tables and 18
core business
processes
comprising
over 760
different
business
activities and
more than 540
business
rules.
The
application
utilizes over
120 different
SAP interfaces
plus numerous
web services
from other
supporting
applications.
A recent count
showed over
835,000
running
process
instances with
more than
6,550,000
activities in
flight.
The
application
was developed
by a team of
nine
individuals on
the IT side
(including
management)
and 15 from
the business,
representing
both the core
team and
international
business reps
from major VA
companies.
Organization:
The team was
comprised of
two groups,
the delivery
team and the
business
owners. The
interaction
between the
delivery team
and business
owners was
managed by a
key IT role
called the
Engagement
Manager (EM),
who is
responsible
for working
with the
business to
gather
requirements
and set
priorities.
The EM also
works directly
with the
delivery team
that was
responsible
for feature
estimates,
architectural
decisions and
production of
the working
system.
Steering:
As part of the BPM effort the
team is
focused on
continuous
process
improvement.
Two committees
assist with
setting
priorities.
One is
comprised of
key users and
business
managers. The
other, led by
the Van Ameyde
CEO, is
comprised of
individual
country
managers.
Business
Analysis: The
initial
analysis of
the project
included three
external SMEs
in European
claims
handling.
These experts
helped drive
the initial
process
discovery that
now supports
the core of
the system.
One of these
experts is
still on the
project but a
knowledge
transfer
process allows
new members to
rotate into
the project
easily.
Software
Factory: To
support the
overall
development
process the
delivery team
is organized
in a Software
Factory model
to assure the
correct
management of
the SOA
infrastructure
and the
delivery of
needed
functionality
for core
components,
reusable
services and
local
features.
Tiered
Support: A
local team
provides first
and second
line support
for running
process
instances and
redirects
pending issues
to a remote
production
support team.
Methodology
The team
employed Agile
methods and
model-driven
development to
deliver and
maintain the
ECHO
application.
Working in
three-week
sprints they
managed to
overcome the
challenge of
not being able
to fully
define all
requirements
upfront. The
team delivers
new
functionality
into the
production
environment
every two
sprints.
The initial
delivery in
2008 was
accomplished
using separate
BPM and
application
development
tools. While
this proved to
be effective
the business
and delivery
teams suffered
from
constantly
having to keep
the two
different
models in
sync, which
led to Van
Ameyde
requesting an
integrated
business
process and
application
development
capability in
the
development
environment.
Now, both
business
processes and
application
elements are
defined using
the same
development
platform.
In
addition, Van
Ameyde
leverages a
BAM module to
monitor
process
activity and
identify areas
for
improvement.
As a result,
the business
process and
application
development
life-cycles
are fully
aligned and
evolve at the
same speed.
Lessons
-
It is very
important for
the process
definition,
design and
change to have
the same
life-cycle as
the supporting
application.
-
An Agile
approach to
defining and
delivering the
process,
coupled with
supporting
application
and underlying
services
proved very
effective. Van Ameyde's
success
depended on
having a
development
platform that
supported a
high degree of
change with
minimal risk.
-
Need to
design the
process in a
very iterative
'agile'
manner. Often
referred to
this as
"design
by doing"
vs.
"doing by
design."
This was
paramount as
the team was
continually
refactoring
core processes
and supporting
services to
meet the
changing
business
needs.
-
Underestimated
the actual
performance
needs of the
system in
terms of
number of
claims to be
processed,
which caused
some
refactoring of
the underlying
data model,
services and
core
components.
The claim
numbers were
driven by an
unexpected
increase in
business. The
learning point
is that you
must recognize
that change
will happen
and be
prepared to
react quickly.
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