The Canadian Source Of Employee Pension Fund Investment And Benefits Plan Management

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Giving Paperwork And Pensions A New Start

By: Scott Hughes

The problem of paper plagues organizations of all sizes. There are environmental, aesthetic, space management, and cost issues. Scott Hughes, of Metastorm, tells how the 1199 National Benefit and Pension Fund resolved the paper issue.

When the words ‘paperwork’ and ‘pensions’ are side by side, a dusty image of desks with forms piled miles high comes to mind. When those same papers are a record of your pension, or your queries about benefits, the import of the few ounces of paper weighs heavy on your mind, and the desk.

What can be done to ensure the words ‘pension’ and ‘paperwork’ evoke an image of a fast-moving production line with actions being taken at intervals along the way to the customer or beneficiary? That’s the challenge faced by many in the ‘pension business’: how to speed up the process, without missing any of the details.

The 1199 National Benefit and Pension Fund (NBPF) was confronted with this issue. Processing more than 5,000 applications a month, the self-administered, selfinsured non-profit provides comprehensive benefits to active and retired members of 1199 collective bargaining units, along with their spouses and children. Its members include:

At NBPF, each member’s folder generally had 20 records, translating into roughly three million paper documents under management. And each document is an interlocking component that builds on the individualized benefits program for each NBPF member.

The rapidly growing number of participants, combined with mergers between NBPF and other unions, created tremendous pressures on the member services department. It was expected to incorporate and manage information on all new participants, often with different benefit levels, and to do this with little or no operational staff increases.

As a result, the large volume of paper folders continued to grow, leading to new applications and member correspondence being lost or misfiled at an alarming rate. The time needed to process routine member inquiries was increasing, and management had little or no data with which to track the flow of work or staff productivity.

The problem of paper plagues organizations of all sizes. Putting aside the environmental, aesthetic, and space management issues, the real problem with paper is cost. This cost is realized both in terms of the actual cost of purchasing and storing paper as well as the negative impact paper has on employee productivity.

Document management solutions have spent the past two decades addressing this problem, but with mixed success. Research from Gartner, Inc., states that the document management and integration market has been unchanged at $5 billion worldwide for the past 20 years. In that same amount of time, the amount of paper being produced by businesses around the world has exploded. A study by Alvin Toffler states 1.3 trillion paper documents are generated each year in the U.S.

Why have offices not gone paperless when they have deployed a Document Management System? Well, to be paperless, everybody in the organization has to have access to the system and few organizations have been able to justify the cost of deploying a document management solution wall-to-wall.

The other main reason document management solutions have not had more widespread success or restrained the paper explosion is that they address only part of the problem. Document management solutions are a static repository for previously paper records. But it is no longer enough to strive simply for the ‘paperless’ office. Whatever kind of document, once the records are digitized, the need often arises to do something with the record – add information, edit information, send it to someone else. At that point, the document management system has reached the limit of its effectiveness.

The Process Problem

Paper documents are created and distributed as part of a process or activity. To squeeze the most productivity out of employees, organizations need to look beyond the paper that is generated and into the processes that create those documents. Finding ways to streamline how they work with their documents is what will reduce the reliance on paper.

Where to begin? Too few established processes and the organization risks falling into chaos and confusion. Too many processes and an organization risks hampering productivity by requiring an extensive amount of administration for every minor task.

Start with basic processes – a leave request, submitting expense reports, or managing incoming invoices. Employees become more productive when they can minimize the time devoted to those processes and focus on the core tasks for which they were hired. Reducing the need to search for paper records or to print out forms is only the first step. Providing an integrated process management system is where the benefits really begin.

Document management is now evolving to a point where product offerings must address the necessity to put process ahead of applications. They need to structure the info they are storing, distribute it accordingly, and provide access to it securely – all process-based functions. That second phase, integrating documents with people and processes, takes us into the arena of Business Process Management (BPM).

BPM increasingly has been cited by industry analysts as a technology that organizations need to deploy in the enterprise because of how it enhances revenue generation efforts, meets customer service needs, and lowers operational costs. A2003 report by Aberdeen Group estimated the market for BPM software at $2.5 billion, coupled with a 29 per cent compound annual growth rate.

BPM is becoming popular in the marketplace because it solves problems. It combines the workflow component with application development and integration, and, most importantly, the people that manage the associated processes – exactly the reason that NBPF used BPM to automate its admin- and paper-intensive processes.

Making It Work

In determining which technology to use, you need to consider the expertise of your in-house IT staff as well as your organization’s additional workflow needs, if any. Third-party development tools work well if you have additional workflow requirements, as well as the staff to develop those applications. If you don’t have additional workflow needs, or have a limited budget or IT staff, then you should probably look at writing an application using another development tool such as Active Server Pages (ASP). Though you could consider developing workflow using your firm’s eMail system, in actuality it would not be much more efficient than a manual process because it does not allow for the validation and automatic completion of information, elimination of re-keying, or verification of when a document was actually reviewed.

Your IT department will most likely want to seek outside expertise in developing a system to manage membership applications, from either consultants or vendors who have developed similar systems for other clients. When working with a third party, be sure to understand what you’re buying. Are you only licensing the development tool from them, or will they actually write the application for you? What does the price include? Are there hidden costs associated?

Before you can map it electronically, you must first document your organization’s application process on paper. Bring to the table representatives from the different departments that can benefit from capturing information during communication with members. The core members of this team should include representatives from your IT, accounting, customer service, benefits, and records departments. Don’t get discouraged when attempting to diagram your workflow. Most firms that undergo this exercise quickly realize that they have no official process, that it’s extremely labor intensive, or that their process is broken.

Develop The Forms And Workflow

After you’ve mapped and reviewed your existing process, identify the changes that you’d like to see. In designing your forms, evaluate your existing forms and eliminate outdated or unnecessary questions. Add new questions to capture member information needed by various departments (for example, mailing list information for the customer service department). Determine which questions will be mandatory, if any. Identify in which cases the response to a question will trigger further form modification or additional workflow such as routing to a department head for approval. For questions that include a drop-down menu with required table entries, decide the source of those tables.

Once your forms and workflow have been developed and approved, select a finite-testing group to evaluate the system before it goes organization-wide. Be sure to build time into your project plan to account for any changes or corrections that must be made based on test feedback. Before going live, make sure you’ve developed a roll-out schedule and an aggressive training plan.

Administration involves keeping track of the tens of thousands of documents that NBPF members submit in order to process their pension benefits. BPM technology has built NBPF a solution that now allows hundreds of users to process applications, estimates, recalculation, and reconciliation online. With immediate access to all forms and information, BPM users can add notes, sort, search, and store files electronically, thus saving storage costs and office space – not to mention just a bit more room on the desks.


Scott Hughes is vice-president of Americas Operations at Metastorm, a business process management vendor.

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