All in the Approach

Traditionally, organizations have looked for ways to offset the large expense that claim department personnel represent. Part of this may entail having individuals churn out more work with less effort as well as "automating" support staff out of the picture. Companies provide claim assessors with software tools that enable them to sit and receive a constant flow of work on-screen. These employees deliver human value as they enter data from paper images, make rapid decisions based on what they view, generate documents and correspondence related to these decisions, and eventually pass cases on to the next step in the production line. The legacy "green screen" systems that are often central to assessors' work typically constrain their thought processes to fit the structure of the system, rather than following best practices to process claims.

Built on the heritage of imaging and work flow is a class of software that provides business process management (BPM). It takes the concept of delivering documents to end users for completion and changes it so the process focuses on the business objectives of the work to be done — accurately assessing a claim. BPM does not treat delivery of documents as the end game. Rather, this approach is centered on defining processes that implement business policies. Thus, the tools provided treat these processes as important organizational assets. A BPM suite is a collection of these tools from a single vendor.

BPM suites offer the tools necessary for business analysts to model improvements to business operations, IT needs to implement those improvements, and dashboards managers want for controlling the performance of their businesses. Much like imaging and workflow, end-users are presented applications that are tailored to the work they must process, with additional process details hidden behind the scenes. Given all of these tools, companies typically want to deploy BPM suites alongside inflexible policy administration and core systems to fill the gaps in operational best practices. Despite providing the tools required to squeeze every last drop of efficiency out of well-defined processes, BPM suites continue to leave the most difficult and highest risk activities unassisted.

Managing Information Complexity

Claims can vary in complexity, from simple property losses to large catastrophic claims. This complexity rarely comes from the process of assessing a claim, and companies are starting to recognize that the information they handle represents a greater complexity.

For any claim, the amount and variety of information that has to be collected, organized, evaluated, and generated by an individual assessor or a team is staggering. Successfully managing ad-hoc tasks, such as requesting and receiving new information, recording interactions with customers, and ensuring all assessment tasks are completed, becomes more difficult for more lengthy claims. A single claim assessor must perform mental back-flips to organize this, and teams working together on complex claims must juggle many interrelated interactions.

To assist with this, specialized claim management solutions provide user interfaces tailored to the information and the tasks that must be processed in a claim case, providing basic workflow capabilities that enable work delivery and approvals to be enforced. Often based on the best practices a software vendor has learned over time, the solution can be rapidly deployed in a claim department that fits the mold.

When an organization wants to model its own individual best practices or wants the flexibility to react to changing business requirements, case management applications are often adopted. They have many case-handling, task, and process management capabilities that can be highly tailored to specific business requirements. As such, case management solutions are typically employed by organizations that are willing to take longer to deploy an application that is specific to them, and is integrated seamlessly into their business practices as well as IT infrastructure.

The features of this class of software aim to provide a central view of the customer and the claim; enforce the capture and review of mandatory documents; organize information from any source within business templates; allow users control over their workspaces, based on experience; and record ad-hoc interactions between users and clients, consultants, field experts, and so on. It also can assist a user or a team in organizing interrelated tasks and ad-hoc activities and provide human-centric business process management to track work.

Case management solutions balance enforcement of business processes and tasks, with free-form activities and document-handling, to enable users to manage claim complexity. Departments deploying these solutions have found that claim assessors are able to process claims faster and more accurately, and to identify opportunities to manage settlements to a lower total cost.

Human-centric solutions such as case management and business process management require an investment in terms of time and effort to derive the most benefit. So how can organizations lacking the appetite for this investment make the improvements that are expected of them?

Managing Services

Outsourcing the technology and processes associated with the claim department has been growing in profile over the last couple of years. There are benefits associated with outsourcing that help maintain its appeal. Despite the feeling of loss of control, farming out work enables companies to reduce the expense of claim administration; spread the cost of new technology and process improvement over time; remove the need for complex technology decisions and management; and incorporate new best practices into poorly performing operations.

Perhaps the most important point is this: Many claim departments operate reasonably effectively, but not fabulously. They may be subject to the human response, "We've always done it this way." Outsourcing components of claim procedures is one way to inject proven best practices into the operations without the cost and time associated with complex business reengineering exercises. Thus, a successful outsourcer has to employ best practices and highly refined technologies to deliver higher quality at a lower cost.

Although outsourcing may seem to provide an opportunity to avoid major technology investments, it is far better supported with specific software. Business process management is typically coupled with service oriented architecture (SOA) technology. Together, they assist in tracking work that crosses organizational boundaries, in managing the sharing of information between the organizations, and also in managing the way the claim department interacts technically with the outsourcer. Without technology binding the organizations together, operations can become clumsy and error-prone. For this reason, some outsourcers provide direct access to their internal software systems as part of the service.

It is important to keep in mind that outsourcing represents possibly the biggest organizational change possible. That said, most companies start small, focusing on a component of the technology or of the operation(s) causing them pain.

Phil Ayres is director of product management at Global 360, Inc., a firm that provides business process management (BPM) solutions. He may be reached at phil.ayres@global360.com.