MBA-7099-UWIC-MBA-MT-19-35

Cardiff Metropolitan University

Cardiff School of Management

MBA

Increasing the Efficiency through Business Process Re-Engineering

in Motor Claim Department in the Ceylinco Insurance PLC

Submitted in March 2014

By

Don Aruna Lahiru Manchanayake

(Student ID – 20037989 - UWIC/MBA/MT/19/35)

This dissertation is submitted in partial fulfilment of the requirements for the degree of

Master of Business Administration (MBA)

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DECLARATION

This work is being submitted in partial fulfilment of the requirements for the degree of

Master of Business Administration (MBA) and has not previously been accepted in

substance for any degree and is not being concurrently submitted in candidature for any

degree.

Signed : ............................................................ (Candidate)

Date : ...................................

SUPERVISOR’S DECLARATION STATEMENT

Student Name : Don Aruna Lahiru Manchanayake

Supervisor’s Name : Professor. Sunanda Degamboda

I acknowledge that the above named student has regularly attended the meeting, and

actively engaged in the dissertation supervision process.

Signed : ……………………………………………. (Supervisor)

Date : ...................................

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ACKNOWLEDGEMENT

I would like to take this opportunity to express my thanks and appreciation to the

supervisor, Professor. Sunanda Degamboda for the continuous guidance given to me in

completing my research and he has been a tremendous mentor for me.

In particular my subject lectures, Dr. Lalith Seneweera and Mr. Sunesh Hettiarachchi,

who guided me through the research methodology module, deserve my special thanks.

Moreover, I would like to express my grateful thanks to all the lecturers and

administrative staffs at ICBT campus for the knowledge and assistance given me to carry

out my studies.

I wish to sincerely thank to all my colleagues at Ceylinco Insurance PLC for the

assistance and information given to me. Also I would like to thanks my friends at ICBT,

who helped me in numerous ways to fulfil this research.

Last but not least, I also take the opportunity to thank my parents, who gave me their

fullest support to make this successfully.

This task would not have been without your help and support.

Thank You.

Lahiru Manchanayake

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ABSTRACT

The research is concerning on current claim process practice in the Ceylinco Insurance

PLC (CIPLC) and to measure the possibilities to increase the efficiency of the claim

payment process by implementing the Business Process Reengineering (BPR). Moreover

this research will find out the relationship with that parameters and how strongly it will

affect the claim payment process.

This research conducts the study on claim department at CIPLC, to understand where

they need to improve its efficiency to achieve the competitive market advantage in motor

business. To understand where the company currently spotted, this research studied the

current process and in comparison with the industry standard benchmark. According to

the brainstorming session, the need to improve the efficiency of claim settlement process

to gain the advantage over the other players has been identified. To gain the efficiency,

company had identified the potential of BPR methodology which are suitable for the

current business environment.

Then in the literature review stage, the theories and case studies relating to the BPR to

identify the positive and negative factors have been discussed. After indentifying

literature, the conceptual framework had formulated to carry out further studies. Based

upon the latter, questionnaire has been drafted with 32 questions to validate the

conceptual framework. This has been distributed among 58 claim processing staffs to get

their individual opinion about the current understanding and further expectations. Then

those collected answers were analysed by using the SPSS software and presented in

4thchapter. In there we have rejected 4 Null Hypothesis (H10, H20, H30, and H50) and

failed to reject 4 Alternative Hypothesis (H1a, H2a, H3a, and H5a). Moreover, based on

the data gather from the questionnaire we have rejected an Alternative Hypothesis (H4a)

and failed to reject Null Hypothesis (H40).

While analysing the overall picture of the research, it is clear that company can increase

the efficiency by implementing the BPR in the claim department in CIPLC.

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Table of Contents DECLARATION ............................................................................................................. i

ACKNOWLEDGEMENT .............................................................................................. ii

ABSTRACT .................................................................................................................. iii

LIST OF TABLES ....................................................................................................... vii

LIST OF FIGURES ...................................................................................................... vii

Chapter One .................................................................................................................1

INTRODUCTION ...........................................................................................................1

1.1 Background of the Study ...................................................................................1

1.1.1 Business Process ...............................................................................................1

1.1.2 Claim Process ....................................................................................................2

1.2 Research Problem Identification ........................................................................4

1.2.1 Symptoms of the Problem..................................................................................4

1.2.2 Justification of the Problem ...............................................................................5

1.2.3 Defining Research Problem ...............................................................................6

1.3 Research Question .............................................................................................6

1.4 Objectives of the Study ......................................................................................6

1.5 Limitations of the Study ....................................................................................7

1.6 Chapter Outline .................................................................................................7

Chapter Two ................................................................................................................8

CRITICAL REVIEW OF LITERATURE ........................................................................8

2.1 Understanding Business Process Re-Engineering...............................................8

2.2 Understanding Process in Business Process Re-Engineering ............................ 12

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2.3 Understanding Leadership role in Business Process Re-Engineering ................ 15

2.4 Understanding Information Technology role in Business Process Re-

Engineering ............................................................................................................... 17

2.5 Success factor for Business Process Re-Engineering ........................................ 21

2.6 Integrating Business Process Re-Engineering into insurance industry .............. 23

Chapter Three ............................................................................................................ 25

RESEARCH METHODOLOGY ................................................................................... 25

3.1 Conceptual Framework of the Research ........................................................... 25

3.2 Development of Hypotheses ............................................................................ 26

3.3 Operationalization ........................................................................................... 27

3.4 Research Design .............................................................................................. 28

3.4.1 Sampling Design ............................................................................................. 28

3.4.1.1 Population ................................................................................................ 28

3.4.1.2 Sample Size / Sample Selection Procedure ............................................... 29

3.4.2 Data Collection Methods and Techniques used for Research Analysis ............. 30

Chapter Four .............................................................................................................. 31

DATA PRESENTATION AND ANALYSIS ................................................................ 31

4.1 Process ............................................................................................................ 31

4.2 Leadership ....................................................................................................... 35

4.3 Information Technology (IT) ........................................................................... 39

4.4 Process redesign towards Cost ......................................................................... 43

4.5 Quality and Quantity ....................................................................................... 45

4.6 Cost ................................................................................................................. 47

4.7 Overall Research Summery (BPR and Efficiency) ........................................... 48

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Chapter Five ............................................................................................................... 51

CONCLUSION AND RECOMMENDATION .............................................................. 51

5.1 Summary of the Study ..................................................................................... 51

5.1.1 Process redesign toward increase of quality and quantity ................................. 52

5.1.2 Leadership toward increase of quality and quantity .......................................... 52

5.1.3 IT enhancement toward increase of quality and quantity .................................. 53

5.1.4 Process redesign toward minimizing the unforeseen cost ................................. 54

5.1.5 BPR toward increasing the efficiency .............................................................. 54

5.2 Recommendations ........................................................................................... 55

5.3 Suggestion for Further Research ...................................................................... 56

LIST OF REFERENCES ............................................................................................... 58

APPENDIX 01 - Questionnaire ................................................................................... viii

APPENDIX 02 - Minutes of the Mandatory supervisor’s Meeting ................................ xii

APPENDIX 03 - Data Collection Summary ................................................................. xiii

APPENDIX 04 - Data Collection ..................................................................................xiv

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LIST OF TABLES

Table 1: Questionnaire development .............................................................................. 27

Table 2: Claim offices response on process improvement .............................................. 31

Table 3: Correlation of Process & Quality/Quantity ....................................................... 33

Table 4: Claim offices response on leadership ............................................................... 35

Table 5: Correlation of Leadership & Quality/Quantity.................................................. 37

Table 6: Claim offices response on IT ............................................................................ 39

Table 7: Correlation of IT & Quality/Quantity ............................................................... 41

Table 8: Correlation of Process & Cost .......................................................................... 43

Table 9: Claim offices response about increasing the quality and quantity ..................... 45

Table 10: Claim offices response about unforeseen cost ................................................. 47

Table 11: Claim offices overall response ....................................................................... 48

Table 12: Correlation of BPR & efficiency .................................................................... 49

LIST OF FIGURES

Figure 1: Claim Process in Ceylinco Insurance PLC ........................................................2

Figure 2: The Reengineering Concept ..............................................................................9

Figure 3: Conceptual framework .................................................................................... 25

Figure 4: CIPLC Organisational Structure ..................................................................... 28

Figure 5: Sample size .................................................................................................... 29

Figure 6: Correlation of Process & Quality/Quantity ...................................................... 34

Figure 7: Correlation of Leadership & Quality/ Quantity ............................................... 38

Figure 8: Correlation of IT & Quality/Quantity .............................................................. 42

Figure 9: Correlation of Process & Cost ......................................................................... 44

Figure 10: Correlations of BPR & Efficiency ................................................................. 49

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Chapter One

INTRODUCTION

This chapter summarizes the current claim process and business practice in Ceylinco

Insurance PLC. Moreover it illustrates the current practice versus the company

benchmarks. Throughout the study of business processes in Ceylinco Insurance PLC,

problems have been identified, which formulated the objectives to continue the research.

1.1 Background of the Study

Sri Lanka insurance industry consists of composite; life and general (non-life) insurance

companies. Composite insurance companies transact both life and general businesses. For

the moment 22 companies are registered for the insurance business in Sri Lanka under the

supervision of Insurance Board of Sri Lanka (IBSL).

Ceylinco Insurance PLC (CIPLC) is one of the oldest insurance companies in Sri Lanka.

It was established in 1987 but its history is going back to 1939. Ceylinco Insurance

registered as the first private sector insurance company. CIPLC involve into both General

and Life insurance business. The CIPLC is the largest private insurance company and

also the leading motor insurer in the country. The company accounted 6,619 million

premium incomes from VIP On The Spot (OTS) and which represents 60% of the total

general insurance premium income for the year 2012.

1.1.1 Business Process

Ceylinco Insurance PLC is categorised into life and non life business entities which

depends on the nature of the business which they involved in. Life insurance and other

investment related products are separately handled by Ceylinco Life division. While


Motor, Fire, Marine, Engineering and Miscellaneous products are handle by Ceylinco

Insurance General Division. Those two entities are doing their operation separately and at

the end of the year, it is incorporated into a single financial report. Here we are focusing

on the motor product in the CIPLC general division. Motor customers fall into two

categories namely individual customers and corporate customers. This allows the

company to give efficient service to the customer, based on their categories. Most of the

time customer insured with more than one vehicle are categorised as corporate customers.

General division of CIPLC comprise with 191 branch network and 106 service centres.

With the VIP concept CIPLC allow its assessor to pay the customer damages on the spot.

In certain cases, due to the non agreement of the claim amount or assessor can’t assess

the claim amount due to the accidental nature or if the accident is doubt full, assessor can

call the estimate from the customer. In either one of the above scenario, the claim will not

count as an OTS claim and the claim will be referred to the policy underwritten branch to

process it. The CIPLC has decentralised its claim operation, empowering branches to pay

the claim for their customers with the approval of technical staffs.

1.1.2 Claim Process

When it comes to the claim settlement there is a systematic way forward like the

underwriting. Automobile, Risk, Internal Audit, Reinsurance, Account and Claim

Departments are involving for the claim settlement process. Other than the OTS claim,

the usual acceptable claim settlement period for motor claim is within the four days once

the customer has submitted the relevant document with the estimation.

Claim process shows in the bellow diagram:

Figure 1: Claim Process in Ceylinco Insurance PLC


1.2 Research Problem Identification

1.2.1 Symptoms of the Problem

There are two processes the company has to deal with the customer. One when the time

customer visits the insurance company to insure his/her risk and the next is when the

customer meets an accident. To build a good relationship with the customer and to

continue further business with him, it is very important to give a quick service for the

claim. Quick claim settlements help the company to strongly deal with customers.

When analysing the CIPLC current procedure, company has promise to give, OTS cash

settlement for the claims which are under Rs. 25,000 while complying with all the

obligatory conditions. For the claim exceeding that amount assessor is giving the offer

and customer can reimburse it by visiting the nearest branch.

Issues are arising in other claim settling procedures. Once the customer got the offer he

need to visit the nearest branch then the claim technical officers are checking the

consistency of the accident and other mandatory requirement and then inform the

underwriting (UW) branch to generate the claim no for the payment. This is time

consuming if customer don’t have proper document with him. As well as the

intercommunication is delay between the UW branches and claim branch as priority is

given for the new policy holders. At times, when the customer is visiting the branch,

assessor may not be present in the branch as he may be visiting for OTS inspection. Due

to the issues arising on the customer side or any delay from the company side, only 15 –

20% claims are settled within 3hrs.

The assessor will not be able to give the offer due to the accident nature or issues with the

consistency like the customer not settle the premium, customer is not there or police

report is required due to the concern with the accident. Therefore customers need to visit

the branch with the accident vehicle or customer can call the assessor/ technical staffs to

visit the garage to continue with the claim process.


1.2.2 Justification of the Problem

CIPLC is operating its business in the competitive market where many companies are

trying to stabilize in the market. It is very difficult to survive as a leader in motor

insurance market. Quick claim settlement plays the key role in terms of increase in

customers’ attraction toward the company. CIPLC has to deal exceptionally well in the

market to give a challenge to competitors.

If the claim is delayed or the customer has to follow up the claim a little more than the

average time with the company, it gives an unpleasant feeling regarding the claim

process. Customers feel like it’s a time consuming process with the company and

sometime customer are being frustrated due to their busy schedules. Moreover,

involvement with the many processes sometime company can’t settle the claim within 4

days, which they promise to settle the claims.

This may lead to the customer dissatisfaction. Moreover, by delaying the claim settlement

period, the company is losing its core competency in the market while compared to other

companies. To address the issue the company plan to centralise its claim processing

operation while continuing with the de-centralise claim payment option. This is the

radical change in the claim departments.

Other than the customer’s perception toward the CIPLC, company will get many

financial benefits by implementing the BPR. As an example due to the restructure of the

processes company can cut down the contract staffs or reallocate them into the value

creation activities. By doing, CIPLC can save lot of financial resources.

CIPLC is going to deploy the BPR for the structural change in the company, in order to

give the immediate service to the customers. Through the BPR, claim department can

view the claimant in a new angle and can offer the quick and efficient service which they

are willing to give.


1.2.3 Defining Research Problem

Claim settlement is defined as the important function in the insurance process and which

help to build the bond between the company and customer. Usually average time taken to

settle the claim is around 20 to 30 days. This is the longer than expect period. Therefore

company is getting unpleasant comments from customers and that may be lead in loss of

CIPLC customers.

In the Sri Lankan context we have a matured market for the motor insurance and few

vehicles are registered with a motor registration department due to the high tax ratio.

Therefore all the general insurance companies are competing for the existing market

share. Therefore it is important to give the better service like claim settlement to retain

the existing customers.

1.3 Research Question

What would be the positive impact of increasing the efficiency through the Business

Process Re-Engineering in the motor claim department in the Ceylinco Insurance PLC?

1.4 Objectives of the Study

The main objective of this research is to identify how to carry on the Business Process

Reengineering in claim department and how it will help in claim department to increase

the efficiency.

Identify the present level of efficiency in the claim department.

Identify how to implement the BPR to increase the efficiency and measure the

performance.

Provide recommendation to increase the efficiency in claim department.


1.5 Limitations of the Study

Although the research has been carefully design sometime we have to face some

limitation. The main objective is to carry out the BPR on claim departments to see

whether the claim processing is increasing on those departments or customers may get

issues on payment due to the involvement of account department.

1.6 Chapter Outline

The following research is carried out in five separate chapters as given below:

Chapter One: Introduction

Chapter Two: Literature Review

Chapter Three: Conceptual Framework & Research methodology

Chapter Four: Data Presentation and Analysis

Chapter Five: Conclusion and Recommendations


Chapter Two

CRITICAL REVIEW OF LITERATURE

The literature of the research is discussed in this chapter and given as a summary of

information published in the area of BPR. Moreover findings, theoretical and

methodological contributions to BPR have been mentioned. The theoretical base of the

research is based upon literature review, which also determines the nature of the research.

There will be reviews on the guiding concept of BPR and efficiency.

2.1 Understanding Business Process Re-Engineering

Ever since the industrialization began, the companies have expanded on various

dimensions. There have been significant changes and improvements on the type of

services available, to the strategies that have been applied. Among the many great

strategies applied in the recent years, Business Reengineering Process (BPR) receives a

significant place of importance in bringing credits to the company’s ultimate goal. The

ultimate goal of any company is to maximize the profit margin (Kumar and Shim, 2007).

The world been in a platform that has undergone much technological advancement, while

increasing different needs and wants, companies adjust their capabilities to meet up with

such requirements to ensure the sustainability of the company (Hammer and Champy,

1993). Kumar and Shim (2007), mentions that to serve the customer satisfaction and to

meet up with the maximizing profits, the company has to make adjustments in enhancing

the productivity and the efficiency of the organization.

As one of the many available strategies that has been used to meet up with the above

mentioned targets the BPR, plays an important role. Hammer and Champy (1993) has

defined the concept called BPR as follows: “The fundamental rethinking and radical

redesign of the business process to achieve dramatic improvements in critical,

contemporary measures of performance, such as cost, quality, service and speed”.


According to the definition the concept is made clear as a strategy that is been applied for

every possible aspect of a company. With regard to fact of “dramatic improvements”

from the previous research, Gunasekaran and Kobu (2002), investigates to prove that the

efficiency of a company could be enhance by the application of this process.

Figure 2: The Reengineering Concept

In working on the implementation aspect of the BPR, Kumar and Shim (2007) further

note on the importance of knowing the overall function on the current process.

Davenport (1990) findings base the facts to the above statement, while defining the

business as a combination of business processes. He describes a business process as “a

set of logically related tasks performed to achieve a defined business outcome”.

Therefore it is made clear all the business processes, which is also the source of business

outcome is focused to maximize the profits, and support the needs and wants of the

customers. In addition, it mentions the group of interrelation of the processes. It begin

from initial emphasize on the business objectives, giving rise to different kinds of

business processes, then those drive towards the need for redesign of the processes,

depending on the different needs of the company, than to optimize each of the sub

processes. This redesign of the processes could be defined in terms of both BPR, and

Business Process Change (BPC). BPC is also an initiation for changes in the processes

but not an overall image of the organization as the BPR, but changes in the specific areas

with regard to the business processes. This to encompasses reduction in the costs, time,

while simultaneously enhancing the flexibility, quality of service, and the satisfaction

within a specified process, while making adjustments or the interrelated web based on the


connections that exist between the structural, human resource, technology, and the means

of management. The difference between the two is that it is only focused on an

improvement, while BPR is much more focused on the redesigning; and BPR is overall

system redesign, although BPC is for the improvement in a more specified, narrow

pathway (Motwani, and Mirch et al., 2002).

It is also found in one of the findings that once each if the business processes have been

identified it is easier to investigate the roots, where the main change needs to be done to

achieve the targeted area (Kumar and Shim, 2007).

While analyzing the BPR, Hammer (1990) has identified few basic principles of BPR.

Some of them are the fact that many jobs are united, the fact that the employees are been

given the opportunity to make decisions, group of the steps been arranged in the natural

working order, reduction in the checks, and the work is done from the process selected

from the multiple process that makes a better sense with regard to the rest of the others

(Covert, 1997).

With regard to the components that are embedded in BPR, Al-Mashari and Zairi (2000)

has identified three main aspects: 1. changes in people, 2. processes and 3. technology,

that needs special attention onto. In thinking in these three dimensions than a simple

thought of reengineering, it is been understood that there could arise many more

complications. It is also mentioned that such complications would lead to the drawbacks

in innovation and continuous improvements. In contrary, Francis and Alley (2007) as

cited by Kumar and Shim (2007), identifies three similar but more defined areas as

components of BPR: Human resource, IT solutions, and physical space.

On the other hand, Motwani and Mirch et al. (2002), investigates on base where the

above components rests. They are having an environment that accepts the change, and the

ability an organization to manage the changes that is expected to be brought.


BPR is been accepted as a satisfying system by 88% of the CIO’s (Motwani and Kumar

et al., 1998). There are many drawbacks of the system. However, the findings on

effectiveness have concluded that Ford Motor, MBL Insurance, and Wal-Mart have been

companies that have achieved success through implication of the system (Al-Mashari and

Zairi, 1999). 60% of the Fortune 500 companies has also adopted, or have plans of

adopting the system. It is also found that implementation of the process can bring an

enormous productivity in the companies. This is made possible due to the arrangements

made in reducing the costs, and improvements made on the quality of the services

provided. Additionally, to escalate the effectiveness the business is needed to check the

business process against the success and failures they face, to avoid complexity (Al-

Mashari and Zairi, 1999).

Though it has many positivity, and is also embraced by many famous companies there

are many drawbacks of the system. However, one of the main drawbacks is the process

not having a defined system to make changes. The strategy does not have a standardize

format which a company could relate to once the process is on implication level. Hence

there is a need for having guide leaders who has a better insight on the innovation and the

changes that could be brought (Motwani and Kumar et al., 1998). Moreover, Al-Mashari

and Irani et al. (2001) bring forward the role of awareness. It is mentioned that the US is

far more a head in been effective when implementing, due to the familiarity of the

process due to the frequent exposure of the system, as it has smooth way to be more

familiar with the tools and the techniques that is involved to BPR. Furthermore,

Sockalingam and Doswell (1996) as cited by Al-Mashari and Irani et al. (2001) identified

that US organizations do better than others in terms of levels of awareness. Another

drawback is the downsizing the staff. Thus it turns to be a difficult strategy to be applied

by the companies of small scale. The result of Hammer and Champy (1993) as cited by

Al-Mashari and Zairi (1999) claims that 70% of the companies that adopt the process are

a failure. Also, the great deal of costs the companies have to bare can be one of the top

factors that contribute as a drawback. Hammer (1990) mentions “an organization’s

commitment of millions of dollars for redesigning internal business processes”;

emphasizing the monetary sacrifices the companies sacrifice on implication of BPR.


Regardless the efficiency and the failures, the BPR system is recognized as a strategy that

drives the companies to on heights while paving it’s pathway on customer-oriented

environment to grow and maximize its profits (Motwani, and Kumar et al., 1998). Covert

(1997), on the other hand adds to that through BPR a company can be an effective in

winning the market in the global platform as an effective competitor. BPR bringing such

advantages can also push the organizations away from the risk of bankruptcy as it is more

directed towards the maximizing the profits. Covert (1997), mentions that the reason

behind the many failures of implementation could be for not been having a depth

understanding on the business processes. Furthermore, this is a situation that results when

the organizations have around the fact that there needs to be a change, without been

aware of the where the intended changes would most suit or how it could be made to

match with the business objective to maximize the profits, while reducing the non valuing

adding processes (Covert, 1997).

2.2 Understanding Process in Business Process Re-Engineering

Findings based on the above, the process plays a vital role in BPR initiation and

implementation phases and it’s a key dimension which is going to affect into the overall

success or the failure in the long run. According to the Davenport and Short (1990)

process comprises with many logical interrelated task to achieve the common business

objective. Four enabler like, management information, technology and people can be

identified by analyzing the technical and social factors in the process. Further his studies

relating to the processes he had divided into two namely operational and management

oriented processes. When planning to restructure or going to redesign the process; need to

consider those enabler and have to manage those factors to increase the efficiency.

Motwani and Mirch et al. (2002) says senior management involvement in the

organization is key to strategic initiative of the business process. First phase of

commencing the BPR is radical change in the process. Therefore, this is needed to initiate

from top to bottom. Hence it is important to analyze the whole business process and get


an idea about its operations and where it interconnects with different sections. Those

identified business processes need to reengineer to improve the cross-functional

performance rather than focusing on each and every department separately. Moreover

companies can remove the identified non value creating activities to smooth the business

process. Reengineering gives an individual the overall responsibility about the total

business process which includes sequence of activities focus on define business outcome

(Gunasekaran and Kobu, 2002).

According to the finding of Hammer and Champy (1993) to gain the significant

improvement from the way the companies currently operate, they need to follow the

common guideline for reengineering, which are firstly, focus on the process rather

company structure, secondly, ultimate objective for the expected performance, thirdly,

make the significant move from old tradition to new and fourthly, creatively adopt the IT

where necessary.

Hammer and Champy (1993) argues that, BPR have to develop around the business

process instead of function, tasks or the people. In addition, to identifying the outputs

which value to customers mostly and accordingly, need to design the input or the new

processes to generate the added value to them. According to Ashayeri and Keij et al.

(1998) business will get the definite competitive advantage if processes evolve around the

customer orientation and its need to formulate the link between the criteria which are

valued by the customers and the performance measure .Companies has to integrate both

internal and external capabilities when reengineering the processes (Gunasekaran and

Kobu, 2002).

Furthermore, business process is defined as a set of interrelated tasks which

simultaneously create the value for the end user. Common goal in the process includes:

firstly, customer satisfaction, secondly, market share/position, and thirdly, return on

investment (ROI). To achieve these goals it is compulsory to improve the

interdependency of the process though the integration of business processes

(Gunasekaran and Kobu, 2002).


Studies relating to the Gulden and Reck (1991) as cited by Michela and Carlotta et al.

(2012) observe that a designed process to be successful does not lie in the current

performance of a firm, instead its being aware of the necessity to rebuild projects for

future business.

After the identification of the set of processes involve in the business, BPR team has to

compare those internal process with the ideal process in the industry. This benchmarking

can help companies to implement the industry standard process while eliminating the non

value creating activities (Ashayeri and Keij et al., 1998; Gunasekaran and Kobu, 2002).

Whether the BPR is involve with radical reengineering of the processes, Campbell and

Kleiner (2001) argues that the peoples will react more positively if the process changes

incrementally. Moreover, it will help to reduce the stress as well as ensure the continuity

of the organizational performance. This is effective but difficult to plan and implement,

while managing the human resource affects in those changes.

According to Berman (1994) as cited by Ashayeri and Keij et al. (1998) most of the time

companies are starting the process reengineering to achieve the efficiency/ profit by

cutting down the cost, when they face disaster or downturns. But the danger of the

redesigning the process is sometime company may slash the processes which they need in

the future growth to gain the competitive advantages. He further said that high level

planning is important to deal with the risk incorporate in radical improvement in business

process. With the good planning and risk evaluation in BPR give the significant

contribution for the business success.

Hammer (1990) state that “At the heart of reengineering is the notion of discontinuous

thinking of recognizing and breaking away from the outdated rules and fundamental

assumptions that underlie operations. It’s better to change the rules or else, it will be like

rearranging the deck chairs on the Titanic. Cutting fat or automating existing processes

will not result breakthroughs in performance. Rather, we must challenge old assumptions

and shed the old rules that made the business underperform in the first place”. Moreover


he illustrated how the ford motor had dramatically improved their performance by

implementing the reengineering to achieve the efficiency. This helps ford to optimize and

eliminate some of its business processes links with purchasing to account and vendor to

account payable process. This resulted in the reduction of their staff from 500 to 125 in

vendor payment process which equals to 75% of staffs reduction (Hammer, 1990).

2.3 Understanding Leadership role in Business Process Re-Engineering

Leadership is one of the main components in the BPR. When a process redesigning is

done, the employees job roles, the expectations, and many other factors related to the job

role changes. Also employees may develop a sense of dissatisfaction towards the

company; been resistance and disapproving the new process. Many other factors that

also would increase the intensity of the pressure are the inadequacy of the resources

available, insufficient attention towards the difficulties in adopting, lack of specifications

on the job role. Regardless the system applied if it is not been appropriately planned out

then there is a great probability of it to be a failures. The fact of efficient planning is a

characteristic of a leader. When the individuals resist change, the need for the change has

to be emphasized; this could be only done through the righteous leadership, who could

balance out the favouration towards the change to those who hesitate.

Hence, Gunasekaran and Kobu (2002) identifies that human capital is a major aspect of

BPR, as it is a necessity of any new system the responsibility of sustaining the employees

within the company, been motivated to perform their duty with satisfaction while been

ready to adjust to change.

Further, Motwani and Mirch et al. (2002) mentions that there is a great need to have

strong leader to keep up the high performance through interpersonal cooperation.

Moreover, he has emphasized that having a well-supported leadership when introducing

BPR is a prerequisite when BPR is implemented. Similarly, Gunasekaran and Kobu

(2002) state the priorities to be given for the education, training of the employees. Also


that these needs to be very well managed in making sure that as much as the leaders the

team members are also on the direction of embracing the change.

Sutcliffe (1999) mentions that there is a great need for the self-motivation and highly

skilled individuals as is not a programme that has a predefined input and an output.

Therefore the need to have directive, and charismatic leaders who could motivate the rest

is very much essential during the stage of implication. This emphasize that having

appropriate leaders with a definite vision is extremely important during strategizing.

Some of the studies has explicit that IT champions are been identified as having great

charisma, than any many other leaders.

Among the many research that is been conducted to investigate the most effective

performance for a leader, it has brought negative results. This also proved to be that more

than a characteristic of an ideal leader it is more appropriate to define leadership in terms

of the situation. This is because there is no one style of leadership that would be effective

in all situations. One theory that defines leadership is transformational leadership. It is the

charismatic leadership that an individual would be able to stimulate the individuals to be

motivated to be involved with an intended job role. However, the studies on such

leadership in IT have not shown positive results; as this model does not drive to

investigate the facilitation of the improvements in the team spirit to work towards a

common goal, when the individuals’ work has been changed, as there has to be much

more supportive system.

On the other hand, Sutcliffe (1999) further quotes the findings by Flamholtz theory called

leadership effectiveness framework. This framework has identified six leadership styles

that have been effective on different situations. These six styles have been reclassified in

to three main categories: non-directive, interactive, and directive. Further to the

framework there is a background factor contributing to investigate whether the situation

is goal focused or individual focused. Directive style can be categorized on to two

categories as Autocratic, and benevolent. Autocratic is more fixed towards the providing

the duty only with no description; benevolent is about providing the duty with an


explanation as to why. In both the cases decision making is not allowed. Interactive on

the other hand is also divided in to two as consultative, and participative. Consultative is

when ideas of the team is taken into consideration before planning; whereas participative

is when a plan is discussed with the team. Finally non directive: consensus, and Laissez-

Faire; where consensus when everyone is given the equal opportunity to perform, and

Laissez-Faire, leaving the group to make decisions on what needs to be done. In

elaboration on the practical scenario, non-directive is identified to be applicable when the

duties are hard to be specified, and directive when the task is easy to define (Sutcliffe,

1999).

Campbell and Klenier (2001) has investigated and found that reason behind failure in

many of the BPR implication was the unrecognized human element. Furthermore if the

motivation, culture, and leadership are embodied into BPR implementation is can bring

better results. As it will fit well with the business transformation, as the business is run by

the individuals; regardless what the strategy is. While reassuring Edward and Mbohwa

(2013) concludes that lack of implementation of leadership together with BPR has led to

the failure of the implementation.

It is the leader who could ensure the smooth running of the processes, especially when a

new system is processed. Therefore it is crucial to identify the leaders when BPR is at the

implementation stage, for introducing and the maintenance of the system.

2.4 Understanding Information Technology role in Business Process Re-Engineering

In begin Information Technology (IT) play a role in scientific areas but later IT comes

long way to change the fundamentals in business environment and way they operate. IT

can be used as an enabler to change the business process. But when, IT is used to capture

the business process, then most of these projects results in failure (Motwani and Mirch et

al., 2002).


When implementing BPR projects organizations had to challenge many fundamental

issues. IT can be determined as a key component when an organization is planning BPR

(Kumar and Shim, 2007). Studies relating to the Chan (2000) as cited by Kumar and

Shim (2007) said that there has been a growing impact of IT on business process.

Gunasekaran and Kobu (2002) found that IT is the major enabler in BPR as 75% of

companies out of 535 are successful because of IT.

According to Al-Mashari and Irani et al., (2001) BPR projects can be finished faster if

BPR software tools are used. Moreover, the resulting process has a considerable

association with BPR software tools. Similarly Grover et al. (1995) as cited by Al-

Mashari and Irani et al. (2001) mentioned that BPR achievement is associated within the

stages by the use of supporting technologies. He further noted that the broadly

implemented technologies enabling BPR are document management, databases and

communication networks.

There are two perspectives for the role of IT in reengineering according to Gunasekaran

and Kobu (2002); which are firstly, the role of the IT function (e.g. Internet, E-

Commerce, Multimedia, EDI, CAD and CAM); and secondly, the role of the

technologies themselves (e.g. ATM, and fibre optics). IT has played an important part to

make the overall reengineering scheme successful.

According to Gunasekaran and Kobu (2002) BPR requires radical changes. By

restructuring the information system to support process reengineering, BPR can be

accomplished. The main purpose is to enhance the supply chain management,

productivity and quality by functional integration, while restructuring an information

system

Gunasekaran and Kobu (2002) stated that in business process there should be a way for

mapping, measuring, tracking and managing commitments. Moreover, using a map of

interconnected network loops, the commitments of an organization’s network can be

shown. This map can be used firstly as a guide to design work processes, secondly as a


support for information technologies in order to manage commitments for customer

satisfaction and to measure productivity

According to Olalla (2000), existing business functions were supported by IT in order, to

improve organization’s efficiency. But the IT role has changed with time as new

organization forms, and patterns of collaboration within and between organizations have

been enabled. Furthermore, the basic underlying idea of BPR is to create value added

output to a customer which is similarly aimed by the concept of business processes

interrelated activities.

Modern computers and other communication methodologies were invented and

introduces as most business processes were urbanized. To automate and/ or speedup

isolated components the new technology has been applied to processes.

First companies need to find out the capabilities offer by IT and then need to restructure

its business processes around those identified capabilities. In that way it can increase

effectiveness of implementation in BPR (Davenport and Short, 1990). According to

Davenport and Short (1990), some firms have an outcome of multiple objectives while

redesigning processes with IT. For example, American Express authorizer's assistant

expert system. The redesigning successfully resulted in a $7 million annual reduction in

costs from credit losses; the average time for each authorization has reduced to 25%, and

30% reduction in improper credit denials. HP also found that it could improve cost, time,

and quality simultaneously by applying IT to the redesigning of several key

manufacturing processes.

The cause for most of the failures in implementing IT in BPR is, processes designed

without considering the capabilities of the IT initially. At the beginning an organization

has to determine the IT usage and its effectiveness of the business requirements and then

develop the system. Therefore, in the early part of its design, the role of IT in the process

needs to be considered and organization should foresee the generic capabilities of IT

while they are determining the major IT capabilities in improving business processes. By


adopting IT in to the business process it improves the coordination and information

access across organizational units. Hence it enhances the management of task

interdependence (Davenport and Short, 1990).

Davenport and Short (1990) identified that the IT proficiency that can reshape processes.

Most of the time, companies are willing to implement their own capabilities and

technologies to the processes which they employ. Once the organization restructure key

processes it needs to setup a mechanism to oversee how future redesign take place and

according to the ongoing statistics organizational changes need to ensure information

systems support process flow.

According to Davenport and Short (1990) IT group can stay behind the scene and educate

and facilitate the senior management to make decision of process redesign based on IT.

Then IT group can prepare the process redesign expense and make demand for that. He

further said then the IT group can begin to incorporate the Industrial Engineering (IE)

oriented skills of process measurement, analysis, and redesign, perhaps merging with the

IE function if there is only one in the company.

IT professionals in an organization can develop their own software to support the

organization processes rather buying very expensive software packages. As a matter of

fact, they are aware how to design software more effectively to satisfy their own users.

Similarly IT professionals will need to build robust technology platforms on which

process specific applications can be quickly constructed. This implies a standardized

architecture with extensive communications capability between computing nodes, and the

development of shared databases (Davenport and Short, 1990).


2.5 Success factor for Business Process Re-Engineering

The main goal for any project or BRP project is to be successful. There are different

parameters involve in BPR project, those are namely processes, leadership and IT, and by

managing those parameters company can achieve the miracles BPR implementation.

Successful implementation of BPR can be measured using the decreasing of cost or the

cycle times involve in each process. This will create a significant improvement in product

quality or in the service level offering to the customer (Covert, 1997).

According to the studies of Hammer and Champy (1993) it defines that, the company

which are engaged into the BPR had claimed only 30% success rate but on the other hand

Al-Mashari and Irani et al. (2001) disapproved the above success rate and according to

their studies they had proven 55% success rate. This indicates a good sign for future BPR

projects.

Methodological tool used for the implementation of BPR plays a vital role. Those

associated tool and techniques should be simple to change the organizational culture and

trends. Moreover issues relating human resource and change management need to be

handling carefully. To gain the ultimate company objective through the BPR

implementation it is necessary to use the acceptable techniques for project planning,

project management, process capturing and process creation (Al-Mashari and Irani et al.,

2001).

Hammer and Champy (1993) pointed out five guidelines for the success of BPR projects.

The guidelines are described as follows; always start with the customer and work

backwards, move fast, tolerate risk, accept imperfections along the way, don’t stop too

soon.

Fundamental organizational restructure is required to implement complex business

process changes through BPR. In order to avoid the implementation of pitfalls successful

factors should be identified and implemented (Al-Mashari and Zairi, 1999).


Success Factors;

1. Employee’s commitment and leadership.

There are significant impacts on processes, technology, and culture and job roles when

applying major changes to the business processes. Changing those simultaneously will

make it harder (Covert, 1997). Implementation of BPR affects multiple departments

within the company therefore there’s the need to get the commitment from all the

employees who comes under those affected areas.

Campbell and Kleiner (2001) argued that, it is very important to get the management

commitment for the project with the strong leadership before the implementation of BPR.

Those management commitments include sponsorship, dedicated BPR team and budget

allocations. Al-Mashari and Zairi (1999) said, in order to provide a clear vision for the

future, leadership has to be effective, strong, visible, and creative in thinking and should

be understandable.

2. Effective BPR team

Due to the effect in many functional areas within the company it is important to have the

cross-functional BPR team. Team should comprise with effective leadership, experience,

skill, self-motivation and team players (Al-Mashari and Zairi, 1999). Covert (1997)

recommended to have a less than 10 players per BPR team in order to maximise the

effectiveness.

3. Business needs analysis.

BPR team need to discuss with the process owner and stakeholder to identify, assess the

current processes, and what business processes need to restructure, to achieve the desired

outcome through the reengineering. More importantly those newly create processes have

to inline with the business objectives and corporate strategies of the company. Success of


the alignment can be displayed in form of customer service, financial statistics and

growth of the business (Covert, 1997).

4. Adequate IT systems and infrastructure.

For the successful implementation of the BPR, IT systems and IT infrastructure plays a

vital role (Al-Mashari and Zairi, 1999). The involvement of IT is one of the major

dimensions for the success of reengineering projects. Studies relating to the Hammer

(1990) explain IT use to challenge the day to day operational processes at an organization

long before modern IT system and infrastructure comes to play.

5. Effective change management.

When implementing the BPR, it makes significant change in the culture, people and

processes they are currently aware with (Al-Mashari and Zairi, 1999). Therefore they are

going to react for it. So it is important to deploy the change management as a discipline to

manage employees according to the situations, by considering that they are people too

(Covert, 1997). Campbell and Kleiner (1997) suggested that success of the changes is

depending on how effectively management spread the new culture to the company.

2.6 Integrating Business Process Re-Engineering into insurance industry

Insurance is considered as a risk management principle. Anyone can take the insurance

product by paying a certain amount of money as premium. When he/she faces with an

uncertain loss, the insurance company will pay back for the damage or losses incurred by

the insured (IF4 Insurance claims handling process, 2011). In many parts of the world, it

is compulsory to take an insurance cover for motor vehicle before it’s on public road.

Insurance claim processing with BPR can make significant improvement in areas like

delay in claim processing, average time taken to process the claim, areas vulnerable to


frauds and miscalculation of the claim payment structures. If the company couldn’t

addresses the above mentioned issued through the BPR implementation, which may lead

to over staffing issue and increase of management overheads. So the deployment of

quality claims management processes are important for the insurance companies to

manage the claim cycle in efficient manner (Bonitasoft.com, 2014).

According to the studies of MBL Insurance, Davenport and Short (1990) and

recombo.com (2013) reflects that, they had many issues with new customer acquisition.

For the underwriting stage it’s involved 30 steps between 5 departments and totally 19

people by average involved in handling new customer application. It’s usually taken 5 to

25 days to process the new policy and underwrite it. But with the reengineering they can

improve the processing time and which help them to increase their productivity by 60%.

Above exam is based on the underwriting process for the insurance company, which can

be practiced to improve the efficiency in the claim settlement process in an insurance

company by removing the non value creation activities in its business process.


Chapter Three

RESEARCH METHODOLOGY

The tools and set of ideas are being elaborated in this chapter, which would guide the

research. The conceptual model from which the hypothesis is derived is shown in the

research framework. In addition, the population and the sample are selected to carry out

the research, with justification.

3.1 Conceptual Framework of the Research

Figure 3: Conceptual framework

(Independent Variables) (Dependent Variables)

The above mention conceptual framework is based on the literature found in the Business

Process Re-Engineering (BPR). The framework is prepared to show how the BPR will

affect to an increase in the efficiency. BPR is elaborated by the variable of process,

leadership, information technology and the efficiency, which is sub categorized into the

Quality/Quantity and Cost to measure the effect from the component of BPR. By

increasing or decreasing that independent variable in BPR, it will effect to the efficiency.

Business Process Re-Engineering Efficiency

Process

IT

Quality / Quantity (No of Claims)

Cost

Leadership


This is taken as dependent variable. Each element has taken in this conceptual framework

as a variable to establish the relationship between the BPR and efficiency. With the

positive relationship with above parameters, research can help to show the improvement

of efficiency in CIPLC.

3.2 Development of Hypotheses

Based upon the conceptual model, hypothesis are developed which necessitate its

validation, using advance statistical techniques such as SPSS.

H1a - Business process redesign through BPR will increase the quality/quantity of claim

settlement process in CIPLC.

H10 - Business process redesign through BPR will not increase the quality/quantity of

claim settlement process in CIPLC.

H2a - Leadership through the BPR will increase the quality/quantity of claim settlement

process in CIPLC.

H20 - Leadership through the BPR will not increase the quality/quantity of claim


H3a - IT system and infrastructure enhancement through the BPR will increase the

quality/quantity of claim settlement process in CIPLC.

H30 - IT system and infrastructure enhancement through the BPR will not increase the


H4a - Business process redesign through BPR will help to minimize the unforeseen cost

involve in claim settlement process in CIPLC.

H40 - Business process redesign through BPR will not help to minimize the unforeseen

cost involve in claim settlement process in CIPLC.


H5a - Business Process Reengineering will increase the efficiency in claim settlement

process in CIPLC.

H50 - Business Process Reengineering will not increase the efficiency in claim settlement

process in CIPLC.

3.3 Operationalization

Based on the conceptual framework it is compulsory to define the operational plan. To

validate the above developed hypothesis it is mandatory to define the set of questions

based upon combining dependent and independent variables. For that, the questionnaire

will be prepared with 32 questions.

Table 1: Questionnaire development Concept Variables Indicator Measures Question

Business

Process Re-

Engineering

Process

Redesigning of the

business processes

Likert Scale Q1, Q2, Q3,

Q4, Q6, Q7,

Q8

Leadership

Guide, Training and

Empowerment

Likert Scale Q12, Q13,

Q14, Q15,

Q16, Q17, Q18

IT

Offer new IT systems

and infrastructures

Likert Scale Q21, Q22,

Q23, Q24,

Q25, Q26

Efficiency

Quality/Quantity

(No of Claim)

Improve the quality and

quantity of the claim

process

Likert Scale P - Q5, Q9,

Q10, Q11,

L - Q19, Q20,

IT - Q27, Q28,

Q29

Cost

Reduce unforeseen cost Likert Scale P - Q30, Q31,

Q32

(Questionnaire is attached with the Appendix 01)


3.4 Research Design

3.4.1 Sampling Design

3.4.1.1 Population

CIPLC is the one of the largest insurance company in the market context. The company

involve with many classes of the insurance products which covers all the insurance need

in the market. Due to the complexity of the business nature, different department will

handle the different processes in the company.

Here shows the basic cross functional department structure to point out where the claim

department in the hierarchy.

Figure 4: CIPLC Organisational Structure

The company consists of 2360 permanent carder staffs. According to the company

hierarchy, technical department handle the tasks including underwriting, automobile and

claims. Claim department is divided into two separate sections by the nature of the

business they are operating. Generally one section handles the motor related claims

while the other is involved with non-motor claims.

CIPLC

Finance Technical

Underwritting

Claims

Automobile

Re-Insurance Information Technology

Sales and Marketing Operation

Branches

CSD


Claim Processing Staffs 68

Focusing on the research, only the claim processing staffs from the motor claim

department will be taken as the population.

3.4.1.2 Sample Size / Sample Selection Procedure

To conduct the research it is mandatory to identify the appropriate sample size, out of the

total population in the motor claim department. In that context, a proportionate sampling

technique is used. In order to simplify the task, online sample size calculator has been

used to calculate the sample.

Figure 5: Sample size

(Source: http://www.surveysystem.com/sscalc.htm)

With 95% confidence level, the research results are within +/- 5 confidence interval

which results in the sample size of 58. To be unbiased with the research result we have to

select the employees from the motor claim department by using the simple random

sampling techniques.

http://www.surveysystem.com/sscalc.htm


3.4.2 Data Collection Methods and Techniques used for Research Analysis

Face to face interviews are carried out to collect the users view and their intention and

opinion about the current system process and future expectations. Primary data collection

techniques like research questionnaire are used to collect the feedback from claim

processing staffs. The questionnaire is design as self completion with likert scale

questions. This is positively helpful to collect the data from the staffs, which are not

willing to spend more time with the question. The questionnaire consists of 32 questions

fewer than 4 categories which had been identified in the literature review. Sample of the

research questionnaire is attached in Appendix 01.

The questionnaire handed over to the claim department staffs by hand to take the special

attention from them and by doing so they feel like little more commitment to give their

feedbacks. In Addition, where necessary, apply a little pressure though the senior

departmental staff to get the things done.

It took 8 to 12 days to distribute the questionnaire among them and to collect backed the

filled questionnaire. When the staffs needed to clarify any confusion regarding the

questionnaire, explanation to them over the phone or by personally visiting them were

made possible.

Summary of the collected data was attached for the reference in Appendix 03 as data

collection summery.


Chapter Four

DATA PRESENTATION AND ANALYSIS

This chapter relates the analysis of the data gathered for the purpose of the subject

research. Questionnaires have been used to gather data on the basis of different

dimensions of BPR which are analyzed according to their relevance in the targeted

audience as such providing the results to determine the BPR relationship with efficiency.

Hereby analyzing and discussing the factors comprising of process, leadership and

information technology; which are going to influence on the efficiency composed of

quality/quantity and cost. Below mentioned all the data obtained from the questionnaire

which is analyzed using the SPSS.

4.1 Process

Table 2: Claim offices response on process improvement


In this subsection of the questionnaire (Table 4.1), was designed on the basis of the

relationship between the business process redesign is needed to increase the

quality/quantity of the claim payment. For the analysis, the participants have been offered

the answer sheet with the likert scale which varies from Strongly Agree, Agree, Neither

Agree/Disagree, Disagree and Strongly Disagree. This is measured the scores from 5 to 1.

In the analysis of the questionnaire, it was made clear that the question, an individual’s

awareness on their role fitting the overall business process can make a significant change

in the quality of the business process, was selected by 47% of the claim officers as agree

while 40% of then strongly agree. This adds up the mean value to be 4.26 and 0.69

standard deviation. Similarly 59% of the claim officers agree that they are satisfied with

the way the usual works processes are organized in CIPLC while 22% of them neither

agree/disagree, where the mean of 3.71 and the standard deviation is 0.77. Likewise 60%

of the claim officers agree that CIPLC needs to be improved or redesigned in its claim

settlement process while 21% of them neither agree/disagree, where the mean of 3.81 and

the standard deviation is 0.78. The clients are not happy with the time taken to process

the claim is scored by claim officers with 36% neither agree/disagree while 28% of them

scored agree and disagree. Therefore the mean value of this is 2.97 with the standard


deviation of 0.95. For the question, after the implementation of BPR, you will get the

necessary support from other departments, was selected by 45% of the of claim officers

as neither agree/disagree while 33% of them are agree, where the mean value of 3.45 and

the standard deviation is 0.88. Also 52% of the claim officers agree that internal

resources are adequate enough to redesign the processes, where the mean value of 3.40

and the standard deviation is 0.92. In the same way 47% of the claim officers agree that

by implementing BPR in Claim settlement, CIPLC can have a competitive advantage in

the market place while 31% of them are strongly agreeing, where the mean of 4.02 and

the standard deviation is 0.87.

In summing up the results of the data gathered from the overall research it is clear that

most of the participants have scored in favour of business process redesign is needed to

increase the quality/quantity of the claim payment. The significance of the choice could

be proven by the mean value of 3.67 and standard deviation 0.84 assign to it on the

analysis.

Table 3: Correlation of Process & Quality/Quantity

**. Correlation is significant at the 0.01 level (2-tailed).


Figure 6: Correlation of Process & Quality/Quantity

As shown in the above Table 4.2 and Figure 4.1, the relationship between business

process redesign and the quality/quantity can be constructed with the help of Pearson’s

correlation. In accordance with SPSS the Pearson’s correlation provides the data of two

variables and by drawing a line of best fit, the relationship is deduced as shown in Table

4.2 and Figure 4.1. In Addition Pearson correlation (r) at 0.425 assesses the relationship

between process and quality/quantity being weak positive with n=58 at a significance of

the correlation is 0.001. The variable of process should be an independent in this

evaluation for the variable of quality/quantity to be dependent. Therefore if

the increase/decrease of business processes in CIPLC, it will lead to increase/decrease

of claim processing quality/quantity. The above relationships show us that, above 0.5 is

taken as strong positive and the range 0.0 to 0.5 is taken as weak positive. This is because

the relationship is based on Pearson correlation.


The hypothesis is validated at significance 0.05.

H1a - Alternate Hypothesis:

Business process redesign through BPR will increase the quality/quantity the claim


H10 - Null Hypothesis:

Business process redesign through BPR will not increase the quality/quantity the claim


As per the SPSS, The acceptance of a hypothesis is determined in terms of the

significance of the real data (Sig 2-tailed), which is in this study 0.001. This make the

real data error is less than standard 0.05. This would direct the conclusion that, Null

Hypothesis is rejected and the Alternate Hypothesis is failed to be reject. A relationship

to be found as strong or not is determined by linking this data together with the

correlation and coefficient values. Since the correlation is 0.425 (r) and the coefficient of

the relationship is 0.181 (r²) the relationship could be concluded as partially positive.

4.2 Leadership

Table 4: Claim offices response on leadership



relationship between the leadership is needed to increase the quality/quantity of the claim

payment. For the analysis, the participants have been offered the answer sheet with the

likert scale which varies from Strongly Agree, Agree, Neither Agree/Disagree, Disagree

and Strongly Disagree. This is measured the scores from 5 to 1.

In the analysis of the questionnaire, it was made clear that the question, they can trust on

their leaders, was selected by 45% of the of claim officers as agree while 36% of them

strongly agree. This adds up the mean value to be 4.10 and 0.87 standard deviation.

Similarly 57% of the claim officers agree that their department superiors have enough

managerial skills and strategies to introduce new business process/culture while 14% of

them strongly agree, where the mean of 3.98 and the standard deviation is 0.81. Likewise

55% of the claim officers agreed that the bond between the supervisors and the

employees facilitate the business process where the mean of 4.02 and the standard

deviation is 0.71. Their department superiors are more business oriented than people

oriented is scored by claim officers with 31% neither agree/disagree while another 31%

of them scored agree. Therefore the mean value of this is 3.29 with the standard deviation


of 1.09. For the question, they receive up to date information regarding the current and

future business process changes of CLPLC, was selected by 50% of the of claim officers

as agree while considerable no of participant (24%, 19%) scored as neither agree/disagree

and disagree, where the mean value of 3.45 and the standard deviation is 0.88. Also 52%

of the claim officers agree that their superiors are self motivated and independent

thinking leaders, where the mean value of 3.84 and the standard deviation is 0.81. In the

same way 67% of the claim officers agreed that they have been continuously assessed by

the supervisors where the mean of 3.98 and the standard deviation is 0.66.


most of the participants have scored in favor of leadership is needed to increase the

quality/quantity of the claim payment. The significance of the choice could be proven by

the mean value of 3.81 and standard deviation 0.83 assign to it on the analysis.

Table 5: Correlation of Leadership & Quality/Quantity

*. Correlation is significant at the 0.05 level (2-tailed).


Figure 7: Correlation of Leadership & Quality/ Quantity

As shown in the above Table 4.4 and Figure 4.2, the relationship between leadership and

the quality/quantity can be constructed with the help of Pearson’s correlation. In

accordance with SPSS the Pearson’s correlation provides the data of two variables and by

drawing a line of best fit, the relationship is deduced as shown in Table 4.4 and Figure

4.2. In Addition Pearson correlation (r) at 0.260 assesses the relationship between

leadership and quality/quantity being weak positive with n=58 at a significance of the

correlation is 0.049. The variable of leadership should be an independent in this

evaluation for the variable of quality/quantity to be dependent. Therefore if

the increase/decrease of leadership in CIPLC, it will lead to increase/decrease of claim

payment quality/quantity. The above relationships show us that, above 0.5 is taken

as strong positive and the range 0.0 to 0.5 is taken as weak positive. This is because the

relationship is based on Pearson correlation.



H2a - Leadership through the BPR will increase the quality/quantity of claim settlement

process in CIPLC.

H20 - Leadership through the BPR will not increase the quality/quantity of claim









4.3 Information Technology (IT)

Table 6: Claim offices response on IT



relationship between the IT system and infrastructure enhancement is needed to increase

the quality/quantity of the claim payment. For the analysis, the participants have been

offered the answer sheet with the likert scale which varies from Strongly Agree, Agree,

Neither Agree/Disagree, Disagree and Strongly Disagree. This is measured the scores

from 5 to 1.

In the analysis of the questionnaire, it was made clear that the question, the current IT

infrastructure and the systems are not satisfactory, was selected by 55% of the of claim

officers as disagree while considerable no of participant (19%, 17%) scored as neither

agree/disagree and agree. This adds up the mean value to be 2.59 and 0.96 standard

deviation. Similarly 66% of the claim officers disagree that the necessary information

can’t be acquired by using the current IT systems while 19% of them neither

agree/disagree, where the mean of 2.24 and the standard deviation is 0.71. Likewise 53%

of the claim officers agree that by using the improved IT system the accuracy of the

information can be improved while 41% of them scored as strongly agree, where the

mean of 4.36 and the standard deviation is 0.58. By introducing IT infrastructure and


systems the BPR can be made successful is scored by claim officers with 67% as agree

while 24% of them scored strongly agree. Therefore the mean value of this is 4.16 with

the standard deviation of 0.56. For the question, the manual processes needs to be

automated while introducing the BPR, was selected by 55% of the of claim officers as

agree while 38% of them are strongly agreeing, where the mean value of 4.29 and the

standard deviation is 0.65. In the same way 47% of the claim officers agreed that by

having a comprehensive training program relating to computer skills can increase their

job function while another 47% of them are strongly agreeing, where the mean of 4.40

and the standard deviation is 0.62.


most of the participants have scored in favour of IT is needed to increase the

quality/quantity of the claim payment. The significance of the choice could be proven by

the mean value of 3.67 and standard deviation 0.68 assign to it on the analysis.

Table 7: Correlation of IT & Quality/Quantity



Figure 8: Correlation of IT & Quality/Quantity

As shown in the above Table 4.6 and Figure 4.3, the relationship between IT

enhancement and the quality/quantity can be constructed with the help of Pearson’s

correlation. In accordance with SPSS the Pearson’s correlation provides the data of two

variables and by drawing a line of best fit, the relationship is deduced as shown in Table

4.6 and Figure 4.3. In Addition Pearson correlation (r) at 0.337 assesses the relationship

between IT enhancement and quality/quantity being weak positive with n=58 at a

significance of the correlation is 0.010. The variable of IT should be an independent in

this evaluation for the variable of quality/quantity to be dependent. Therefore if

the increase/decrease of IT enhancement in CIPLC, it will lead to increase/decrease

of claim payment quality/quantity. The above relationships show us that, above 0.5 is

taken as strong positive and the range 0.0 to 0.5 is taken as weak positive. This is because

the relationship is based on Pearson correlation.



H3a - IT system and infrastructure enhancement through the BPR will increase the


H30 - IT system and infrastructure enhancement through the BPR will not increase the









4.4 Process redesign towards Cost

Table 8: Correlation of Process & Cost


Figure 9: Correlation of Process & Cost

As shown in the above Table 4.7 and Figure 4.4, the relationship between business

process redesign and the reduction of unforeseen cost can be constructed with the help

of Pearson’s correlation. In accordance with SPSS the Pearson’s correlation provides the

data of two variables and by drawing a line of best fit, the relationship is deduced as

shown in Table 4.7 and Figure 4.4. In Addition Pearson correlation (r) at 0.034 assesses

the relationship between process redesign and cost being weak positive with n=58 at a

significance of the correlation is 0.801. The variable of process should be an independent

in this evaluation for the variable of cost to be dependent. Therefore if

the increase/decrease of process redesign in CIPLC, it will lead to increase/decrease

of unforeseen cost. The above relationships show us that, above 0.5 is taken as strong

positive and the range 0.0 to 0.5 is taken as weak positive. This is because the

relationship is based on Pearson correlation.



H4a - Business process redesign through BPR will help to minimize the unforeseen cost

involve in claim settlement process in CIPLC.

H40 - Business process redesign through BPR will not help to minimize the unforeseen

cost involve in claim settlement process in CIPLC.



real data error is higher than standard 0.05. This would direct the conclusion that,

Alternate Hypothesis is rejected and the Null Hypothesis is failed to be reject. A

relationship to be found as strong or not is determined by linking this data together with

the correlation and coefficient values. Since the correlation is 0.034 (r) and the coefficient

of the relationship is 0.001 (r²) the relationship could be concluded as negative.

4.5 Quality and Quantity

Table 9: Claim offices response about increasing the quality and quantity


In this subsection of the questionnaire (Table 4.8), was designed to analyze the quality

and quantity dependent variable for BPR. For the analysis, the participants have been

offered the answer sheet with the likert scale which varies from Strongly Agree, Agree,

Neither Agree/Disagree, Disagree and Strongly Disagree. This is measured the scores

from 5 to 1.

In the analysis of the questionnaire, it was made clear that the question, centralizing of

claim processing can increase the efficiency in claim settlement, was selected by 43% of

claim officers as strongly agree while 40% scored as agree. This adds up the mean value

to be 4.24 and 0.78 standard deviation. Similarly 59% of the claim officers disagree that

the current no of claim and the quality of the claims which they are processing, are not

satisfying while 28% of them are strongly disagree, where the mean of 1.88 and the

standard deviation is 0.68. Likewise 59% of the claim officers agree that redesigning the

processes can increase the quality and quantity of the claims while 36% of them scored as

strongly agree, where the mean of 4.31 and the standard deviation is 0.57. By

amalgamating some processes the claim processing time can be reduced is scored by

claim officers with 52% as agree while 28% of them scored strongly agree. Therefore the

mean value of this is 4.02 with the standard deviation of 0.81. For the question, by


receiving the necessary business training/ knowledge transfer you can increase the quality

of the claim., was selected by 67% of the claim officers as strongly agree while 31% of

them are agree, where the mean value of 4.66 and the standard deviation is 0.51.

Likewise 57% of the claim officers agree that by introducing new or improved IT

systems the user errors can be reduced but 16% of them scored as neither agree/disagree,

where the mean of 3.97 and the standard deviation is 0.77.In the same way 60% of the

claim officers agree that while centralizing the business process the number of claims

responded per day could be increased but another 22% of them are scored as neither

agree/disagree, where the mean of 3.90 and the standard deviation is 0.67.


most of the participants have scored in favour of improving the quality and quantity is

needed. The significance of the choice could be proven by the mean value of 3.90 and

standard deviation 0.68 assign to it on the analysis.

4.6 Cost

Table 10: Claim offices response about unforeseen cost


In this subsection of the questionnaire (Table 4.9), was designed to analyze the cost

dependent variable for BPR. For the analysis, the participants have been offered the

answer sheet with the likert scale which varies from Strongly Agree, Agree, Neither

Agree/Disagree, Disagree and Strongly Disagree. This is measured the scores from 5 to 1.

In the analysis of the questionnaire, it was made clear that the question, by redesigning a

process while removing non-value adding processes the operational cost can be reduced,

was selected by 53% of the of claim officers as strongly agreeing while 28% scored as

neither agree/disagree. This adds up the mean value to be 3.81 and 0.74 standard

deviation. Similarly 52% of the claim officers agreed that the investment on BPR is

justifiable for the return we are receiving from redesigned processes, while 36% of them

are neither agree/disagree, where the mean of 3.66 and the standard deviation is 0.69.

With centralizing the claim function of CIPLC, we can reduce the budgeted cadre for

claim settlement department is scored by claim officers with 36% as neither

agree/disagree while considerable no of participant (14%, 16%) scored as disagree and

strongly disagree. Therefore the mean value of this is 2.95 with the standard deviation of

1.13.


most of the participants have scored in favour of neither agree/disagree where the cost

can be reduce through the process redesign. The significance of the choice could be

proven by the mean value of 3.47 and standard deviation 0.85 assign to it on the analysis.

4.7 Overall Research Summery (BPR and Efficiency)

Table 11: Claim offices overall response

Data gathered from the overall research it is clear that most of the participants have

scored in favour of BPR is needed to increase the efficiency of the claim processing in


CIPLC. The significance of the choice could be proven by the mean value of 3.70 and

standard deviation 0.78 assign to it on the analysis.

Table 12: Correlation of BPR & efficiency


Figure 10: Correlations of BPR & Efficiency


As shown in the above Table 4.11 and Figure 4.5, the relationship between BPR and the

efficiency can be constructed with the help of Pearson’s correlation. In accordance

with SPSS the Pearson’s correlation provides the data of two variables and by drawing a

line of best fit, the relationship is deduced as shown in Table 4.11 and Figure 4.5. In

Addition Pearson correlation (r) at 0.406 assesses the relationship between BPR and

efficiency being weak positive with n=58 at a significance of the correlation is 0.002. The

variable of BPR should be an independent in this evaluation for the variable

of efficiency to be dependent. Therefore if the increase/decrease of parameter in BPR, it

will lead to increase/decrease of parameters of efficiency. The above relationships show

us that, above 0.5 is taken as strong positive and the range 0.0 to 0.5 is taken as weak

positive. This is because the relationship is based on Pearson correlation.


H5a - Business Process Reengineering will increase the efficiency in claim settlement

process in CIPLC.

H50 - Business Process Reengineering will not increase the efficiency in claim settlement

process in CIPLC.









Chapter Five

CONCLUSION AND RECOMMENDATION

In this chapter, conclusions have been made with the data analyzed in the previous

chapters, which are based on; the hypothesis identified and describes the relationships

between the variables. Moreover the latter covers considerable conclusions which have

been derived for each hypothesis, recommendations and areas for improvement.

5.1 Summary of the Study

The main target of the research is to investigate on the effects of process, leadership and

information technology on increasing the efficiency, while implementing the Business

Process Reengineering (BPR). To investigate, this study has focused on current claim

processing practice in Ceylinco Insurance PLC (CIPLC). Thus the effect of above

mentioned parameters on the efficiency of the claim settlement process is measured.

The analysis done on the business process of CIPLC, it was identified that there is a need

to improve the efficiency, to gain the competitive market advantage over the competitors.

The analysis also provided the information on where the company stood with regard to its

own benchmarks. Further, to gain the efficiency, company had identified a possible BPR

methodology which is suitable with the current business environment.

Upon the investigation done, the parameter that needs to be improved has been identified.

Then literature has been reviewed to investigate on the other similar researches that have

been carried out on the same area. In reference to the previous literature reviews, a

conceptual framework was defined. Thus a hypothesis was determined based.

Accordingly independent and the dependant variables were identified. Later a

questionnaire (with 32 questions) was designed based on the relationship of the variables.

Hence the research was carried out, while gathering data from 58 participants. The


gathered data was then evaluated using the SPSS software and presented in 4th chapter.

This has resulted rejecting the 4 Null Hypotheses (H10, H20, H30, and H50) and failing

to reject 4 Alternative Hypothesis (H1a, H2a, H3a, and H5a). Moreover, based on the

gather data, have rejected an Alternative Hypothesis (H4a) and failed to reject Null

Hypothesis (H40).

In summing up it is clear that the efficiency could be improved by implementing the

BPR; in this study the efficiency of the claim department in Ceylinco Insurance PLC.

5.1.1 Process redesign toward increase of quality and quantity

With the questionnaire used in here, we try to understand the level of current processes

deployed in and whether they are being used to understand and adopt those with current

working style. The current understanding of the existing processes really helps for the

future redesigning of process. Then gradually arriving into the question to get idea like

whether they have further expectation to change the current process into new dimension.

Overall average score for process is 3.67 and with the deviation 0.84, which can conclude

as agreed. Moreover responders are agreed with the quality/quantity question where help

to increase the overall efficiency by improving the process redesign. This achieved the

overall score 3.39 with the deviation of 0.68. Based on the hypothesis validation with the

correlation (r) of 0.425 and coefficient (r²) of 0.181, we can conclude as there is a

relationship between the process and quality/quantity parameters. According to the above

identified facts, we reached to the conclusion that business process redesign will increase

the quality/quantity which lead to the overall efficiency in the claim settlement process.

5.1.2 Leadership toward increase of quality and quantity

With the questionnaire used in here we try to understand the current leadership

capabilities and leader’s relationship with their subordinate. Moreover, checking whether

they have the ability to influence the user to get desired outcome. This understanding is


necessary, when implementing the BPR many process, which will change tradition. As a

result, different users will response differently and the leaders need to handle those

issues. In addition, if the leader is close to the subordinate, it will be easy. Overall

average score for leadership is 3.81 and with the deviation 0.83, which can conclude as

agreed. Moreover responders are agreed with the quality/quantity question where help to

increase the overall efficiency with leadership capabilities. This achieved the overall

score 3.39 with the deviation of 0.68. Based on the hypothesis validation with the

correlation (r) of 0.260 and coefficient (r²) of 0.067, we can conclude as there is a

relationship between the leadership and quality/quantity parameters. According to the

above identified facts, we can conclude that leadership will increase the quality/quantity

which leads to the overall efficiency in the claim settlement process.

5.1.3 IT enhancement toward increase of quality and quantity

With the questionnaire used in here, we try to understand the current IT systems and

infrastructure used in the company and whether the system facilitate to query the

necessary information they need to process the claim. After the understanding on current

IT capabilities, moving gradually into the question like whether they need more advance

comprehensive system to manage the work smoothly and more efficiently. Moreover

trying to get users opinion about whether are they willing to automation of current

manual processes. Overall average score for IT is 3.67 and with the deviation 0.68, which

can conclude as agreed. Moreover responders are agreed with the quality/quantity

question where help to increase the overall efficiency by enhancing the IT system and

infrastructure. This achieved the overall score 3.39 with the deviation of 0.68. Based on

the hypothesis validation with the correlation (r) of 0.337 and coefficient (r²) of 0.113, we

can concluded that there is a relationship between the IT and quality/quantity parameters.

According to the above identified facts, we can reach to the conclusion that enhancement

of IT system and infrastructure will increase the quality/quantity which leads to the

overall efficiency in the claim settlement process.


5.1.4 Process redesign toward minimizing the unforeseen cost

This hypothesis is design to validate the relationship with, how to minimise the

unforeseen cost via the process redesign. Overall average score for process is 3.67 and

with the deviation 0.84, which can conclude as agreed. The questionnaire design to

validate the cost related questions like by redesigning the process, can we save the cost

by eliminating the non value creating processes. Moreover with the set of questions, we

are keen into getting the individual’s opinion on, with the implementation of new

processes; whether the company can reduce the staffs, where many respond has

disagreed. But as summery, many responders are agreed with the questionnaire by giving

the overall average of 3.47 and with the standard deviation 0.85. Based on the hypothesis

validation with the correlation (r) of 0.034 and coefficient (r²) of 0.001 with the

significant of 0.801, according to the data collected from questionnaire we can conclude

as whether the weak relationship is there between the process and cost parameters which

is not strong enough to prove the relationship with the significant higher than 0.05.

According to the above identified facts, we can conclude that business process redesign

will not reduce the unforeseen cost which leads to the overall efficiency in the claim

settlement process.

5.1.5 BPR toward increasing the efficiency

To have an overall conclusion, we analysed all the parameter which we took to measure

the overall performance in BPR and the parameter we used to measure efficiency. Based

on the hypothesis validation with the correlation (r) of 0.406 and coefficient (r²) of 0.165,

we can conclude that there is a relationship between the BPR and efficiency parameters.

According to the above identified facts, we can have the final conclusion that BPR will

increase the efficiency in claim settlement process in CIPLC.


5.2 Recommendations

The ultimate target of this study is to increase the efficiency of the claim settlement

process. Based on the conclusion, some recommendations are given bellow to improve

the performance in the claim settlement process.

Implementation of centralise claim processing will give many advantages to the

company, as well as customers. In branches usually the insurance analyst will handle

the claim processing function with the guidance of the technical staffs and automobile

engineers. But insurance analysts are not well professional and educated in dealing

with claims like claim officers so they will face many difficulties while coming to the

technical side of claim process. Therefore, the company need to form up a separate

department in a centralised location by absorbing the claim officers and some

automobile engineers scattered around in branches. By doing so, CIPLC can

centralise the claim processing function while maintaining the de-centralise claim

payment option, to give the better service to its customer. The centralisation of claim

process will help to increase the accuracy and speed in the claim process where the

customer may visit the branch to collect the claim payment. The current process is as

follows; the processing branch needs to contact the policy underwritten branch to take

the claim no and all relevant details. But with the help of a centralised processing

department; we can remove those non value creating processes.

According to the current practise of the CIPLC, claim process will start when

customers visit the branch with the relevant documents (eg: green copy). Instead of

the latter, company have to implement a new way forward to process the claim as

soon as the automobile engineer visit the accident location and collect the details.

Those details have to be transferred in a centralised claim processing department to

start the necessary works and by the time, customer may visit the branch where

he/she can receive the claim payment instead of starting the process.


CIPLC has to consolidate its database into one centralise database server to maximise

the performance and get the consolidate information. For the moment company

maintaining decentralise database architecture, where to give the fast access to the

branches by connecting their regional database. But, to move on with the centralize

claim processing; we have to empower those claim staff to view the consolidated

information when they require to process the claim. Therefore centralise database

play a significant role in here.

CIPLC need to provide the comprehensive IT related function and technical training

about claim processing to the staffs to get the maximum performance. This training

can be conducted using the internal expert to give the more insight about the company

own practises and processes. Moreover, other than the job related training it is

important to give outbound training to build the bond between co-worker and their

leaders.

Instead of removing the job of extra claim officers, we can allocate them into the

newly created functions like document uploading to view approved comment and

other relevant information, or reporting requirement for the management, which is

created due to the centralisation of the processes.

5.3 Suggestion for Further Research

This research totally based on the claim department in Ceylinco Insurance PLC and those

finding particularly restrict to that department. So for the future research, anyone

interested in this areas can take another department or the can continue the study for the

whole company with integrating all the departments.

Further this study is limited to the process, leadership and IT dimensions of the BPR and

the quality/quantity and cost parameters of the efficiency. So those independent variable

and dependent variable can be measured using more or different parameters, which were


identified. So anyone interest into study the impact on BPR, can use the different

dimensions to find the impacts according to the situations. Else, either one of the

parameter we had identified can be taken for the continuation for deep study with the

interpretation on how it is going to effect to increase the efficiency.

Likewise new researches can observe this research in different angles to find out the most

suitable approach from them


LIST OF REFERENCES

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Al-Mashari, M., Irani, Z. and Zairi, M. 2001. Business process reengineering: a survey of international experience. Business Process Management Journal, 7 (5), pp. 437--455.

ANABIL, B. 2013. Concept of Business Process Re-Engineering (BPR) & its applicability in Insurance field - Bimabazaar.com - Sashi Publications. [online] Available at: http://www.bimabazaar.com/insurance-articles/84-general-insurance-articles/746-concept-ofbusiness-process-re-engineering-bpr-a-its-applicability-in-insurance-field [Accessed: 10 Dec 2013].

Ashayeri, J., Keij, R. and Br"Oker, A. 1998. Global business process re-engineering: a system dynamics-based approach. International Journal of Operations & Production Management, 18 (9/10), pp. 817--831.

B"Orner, R., Moormann, J. and Wang, M. 2012. Staff training for business process improvement: The benefit of role-plays in the case of KreditSim. Journal of Workplace Learning, 24 (3), pp. 200--225.

Bonitasoft.com. 2014. Processing insurance claims with BPM: better overall efficiency and a model template | Bonitasoft | Open Source Workflow & BPM software. [online] Available at: http://www.bonitasoft.com/company/blog/processing-insurance-claims-bpm-better-overall-efficiency-and-model-template [Accessed: 3 Jan 2014].

Business Process Reengineering Assessment Guide. 1997. United States: United States General Accounting Office,Accounting and Information Management Division. pp. 01-73.

Campbell, S. and Kleiner, B. H. 2001. NEW DEVELOPMENTS IN RE-ENGINEERING ORGANISATIONS. pp. 5-8.

Covert, M. 1997. Successfully performing business process reengineering. A Visible Solution Paper.


Davenport, T. H. and Short, J. E. 1990. THE NEW INDUSTRIAL ENGINEERING: INFORMATION TECHNOLOGY AND BUSINESS PROCESS REDESIGN. Sloan Management Review,.

Edward, L. N. and Mbohwa, C. 2013. The Role of Leadership in Business Process Reengineering “Leaders, do you want to change?”. 3 (2), pp. 125--130.

Gunasekaran, A. and Kobu, B. 2002. Modelling and analysis of business process reengineering. International Journal of Production Research, 40 (11), pp. 2521--2546.

Hammer, M. 1990. Reengineering work: don't automate, obliterate. Harvard business review, 68 (4), pp. 104--112.

Hammer, M. and Champy, J. 1993. Reegineering the Corporation: A Manifesto for Business Revolution. Harper Business.

Hammer, M. and Champy, J. 1993. Reegineering the Corporation: A Manifesto for Business Revolution. Harper Business.

Harvard Business Review. 2014. Reengineering Work: Don’t Automate, Obliterate. [online] Available at: http://hbr.org/1990/07/reengineering-work-dont-automate-obliterate/ar/1 [Accessed: 10 jan 2014].

Holtzman, Y. 2011. Business process improvement and the tax department. Journal of Management Development, 30 (1), pp. 49--60. Kumar, A. and Shim, S. 2007. Eliminating emergency department wait by BPR implementation. pp. 1679--1683.

Lamont, J. 2005. Insurance: Next-generation claims processing. KMWorld, October 2005, pp. 10--11.

Michela, P., Carlotta, M. C. and Andrea, C. 2012. Organizational Change: Business Process Reengineering Or Outsourcing?. Annals of Faculty of Economics, 1 (2), pp. 277--287.


Motwani, J., Kumar, A., Jiang, J. and Youssef, M. 1998. Business process reengineering: a theoretical framework and an integrated model. International Journal of Operations & Production Management, 18 (9/10), pp. 964-977.

Motwani, J., Mirch, Ani, D., Madan, M. and Gunasekaran, A. 2002. Successful implementation of ERP projects: evidence from two case studies. International Journal of Production Economics, 75 (1), pp. 83-96.

Olalla, M. F. 2000. Information technology in business process reengineering. International Advances in Economic Research, 6 (3), pp. 581--589.

Osborne, T.. Business Process Reengineering - What is the social implication for the future if we continue to utilize IT to transform organization? Australia: Griffith University. pp. 149-156.

recombo.com . 2013. Business Process Reengineering: For insurance companies, 1990 was not so different from today - Agreement Express. [online] Available at: http://recombo.com/2013/03/business-process-reengineering-for-insurance-companies-1990-was-no-so-different-from-today/ [Accessed: 20 Dec 2013].

Sutcliffe, N. 1999. Leadership behavior and business process reengineering (BPR) outcomes: an empirical analysis of 30 BPR projects. Information & Management, 36 (5), pp. 273--286.

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APPENDIX 01 - Questionnaire

20 / 01 / 2014

Dear Sir/Madam

I'm Undertaking a research on Increasing the Efficiency through Business Process Re-Engineering in Motor Claim Department in the Ceylinco Insurance PLC (CIPLC). I kindly request you to complete the following short questionnaire regarding the practice of Business Process Re-Engineering. It should take no longer than 20 minutes of your time. Although your response is of the utmost importance to us, your participation in this survey is entirely voluntary.

Kindly return the completed questionnaire to me at your earliest. Please note that this research is carried out purely for academic purposes.

Should you have any queries or comments regarding this survey, you are welcome to contact me on 0777218349 or e-mail me at [email protected]

Yours Sincerely, Lahiru Manchanayake

PLEASE ANSWER THE FOLLOWING QUESTIONS BY TICKING (X) THE RELEVENT COLUMN Name:

Department :

Job Title / Grade :

Brief Description of Your Job Role :

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Process Strongly

Agree Agree Neither

Agree/Disagree

Disagree Strongly Disagree

1 An individual’s awareness on their role fitting the overall business process can make a significant change in the quality of the business process.

2 You are satisfied with the way the usual works processes are organised in your department.

3 CIPLC needs to be improved or redesigned in its claim settlement process. 4 The clients are not happy with the time taken to process the claim.

5 Centralising of claim processing can increase the efficiency in claim settlement.

6 After the implementation of BPR, you will get the necessary support from other departments.

7 Internal resources are adequate enough to redesign the processes.

8 By implementing BPR in Claim settlement, CIPLC can have a competitive advantage in the market place.

9 The current no of claim and the quality of the claims which you are processing, are not satisfying.

10 Redesigning the processes can increase the quality and quantity of the claims.

11 By amalgamating some processes the claim processing time can be reduced.

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Leadership Strongly

Agree Agree Neither

Agree/Disagree


12 You can trust on your leaders.

13 Your department superiors have enough managerial skills and strategies to introduce new business process/culture.

14 The bond between the supervisors and the employees facilitate the business process.

15 Your department superiors are more business oriented than people oriented.

16 You receive up to date information regarding the current and future business process changes of CLPLC.

17 Your superiors are self motivated and independent thinking leaders. 18 You are been continuously assessed by the supervisors. 19 By receiving the necessary business training/ knowledge transfer you can

increase the quality of the claim. 20 Your department superiors continuously monitor you to get the maximum

performance from you.

Information Technology Strongly

Agree Agree Neither

Agree/Disagree


21 The current IT infrastructure and the systems are not satisfactory. 22 Necessary information can’t be acquired by using the current IT systems.

23 By using the improved IT system the accuracy of the information can be improved.

24 By introducing IT infrastructure and systems the BPR can be made successful.

25 The manual processes needs to be automated while introducing the BPR.

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26 By having a comprehensive training program relating to computer skills can increase your job function.

27 By introducing new or improved IT systems the user errors can be reduced. 28 With the introduction of new IT infrastructure are increases the quantity of

the claims processing per day. 29 While centralizing the business process the number of claims responded per

day could be increased.

Cost Strongly

Agree Agree Neither

Agree/Disagree


30 By redesigning a process while removing non-value adding processes the operational cost can be reduced.

31 What is invested on BPR is justifiable for the return we are receiving from redesigned processes.

32 With centralizing the claim function of CIPLC, we can reduce the budgeted cadre for claim settlement department.

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APPENDIX 02 - Minutes of the Mandatory supervisor’s Meeting

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APPENDIX 03 - Data Collection Summary

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APPENDIX 04 - Data Collection

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MBA-7099-UWIC-MBA-MT-19-35

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