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Pension transformation must be based on a solid foundation. Getting business basics right will be what separates the houses of brick from the houses of straw.
Many pension organizations are on the fast track to digital. But on the journey, have they lost sight of what’s fueling the engine of high performance?
Accenture research into operational performance among pension systems revealed that the similarities between lower performers are more marked than the similarities between higher performers.
What’s more, the inhibitors of high performance tend to be few and basic. For example, basic processes are draining resources and time, so it is important to know what not to do.
Furthermore, being aware of costs enables the creation of a business case for digitization and the ability to measure actual progress against that plan.
Transactional services present the biggest digital opportunity to save citizens’ time and governments’ money. For example, the average cost of a digital transaction can be 20 times lower than the cost of phone transaction, and 50 times lower than face-to-face interactions.1
In this short paper, we explore the many opportunities to get the business basics right before accelerating digital capabilities.
1. HM Government Cabinet Office; “Government Digital Strategy” December 2013, online at https://www.gov.uk/government/publications/government-digital-strategy/government-digital-strategy
Most pension systems have delved into digital with a simple Web presence, and added self-service features over time. Through it all, the underlying business has not changed—it just has a digital periphery.
As automation increases, however, citizen behaviors change and digital contact channels are becoming the norm. Pension organizations today must transform to deliver public service for the future, and be digital at their core—not just their edge.
For pension organizations, moving to digital means breaking down the internal and external barriers to communication and interaction with their customers. It means tearing down silos of product delivery to offer services tailored to the needs of the customer.
But it is as much about construction as it is about breaking down old ways. Fully adopting automation, customer-centric business processes and cross-channel service will form the digital core, and lay the foundation for future capabilities.
It’s important to lay the right bricks for a digital foundation. But how will pension systems know whether they have the right materials to support new digital activities?
Accenture is benchmarking the operational performance of pension agencies against their peers through the Accenture Pensions and Social Security Maturity Assessment.
Initial findings reveal that the similarities between lower performers are more marked than the similarities between higher performers. What’s more, the inhibitors of high performance tend to be few and basic.
To move up the maturity curve to high performance and set a sturdy foundation on which to build up digital capabilities, pension agencies must lay bricks of efficiency, legitimacy and a focus on outcomes.
And to deliver public service for the future in pensions, this construction must be founded on solid business principles. Pension organizations must know what they do, how much it costs and how well it meets the needs of citizens.
Pension transformation is possible if your organization focuses on getting these basics right:
Efficiency. Boost mission productivity by finding ways to eliminate the contact that you don’t need. In addition to avoiding contact, avoid paper if you don’t need it.
Paper cuts don’t have to hurt. For example, Norway is dramatically reducing paper use through its ALTINN system, which allows citizens and businesses to interact with government online.
Approximately 75 percent of forms that must be submitted to government agencies are submitted via ALTINN. A whopping 400,000 companies no longer use paper forms to submit declarations.1
Legitimacy. The public and citizens want to know your pension system is being run efficiently. However, according to an IDC survey, government was among the lowest-ranked industries for document process efficiency.
Only one in three government respondents to the survey placed greater importance on projects for improving document-driven processes than other IT projects—10 points lower than the commercial sector.2
Outcomes. You may believe that you're doing all of the right things to support your mission and your members. But the only true way to track your outcomes is to measure them.
Pension organizations often don’t measure the result of appeals and complaints. Forty percent of pension administrators surveyed record the number of appeals they are subject to. However, only 28 percent record the outcome of those appeals.3
2. IDC Report http://mds.ricoh.com/files/knowledge_center/IDC_Revenue_WP_Ricoh_FINAL.pdf
3. Accenture Pensions Benchmarking Survey
May 14, 2014
What Can Pension Systems Learn From the Three Little Pigs?—Infographic
Pension systems today must change to be digital at the core, not just the edge.
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