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Mind Your Own e-Business!
Developing a Performance Assessment Framework for New e-Business Projects
By Coen Crijns
Introduction
In this attachment, the appendices for the Master’s thesis Mind Your Own e-Business!
Developing a Performance Assessment Framework for e-Business Projects are organized.
These appendices are structured in different parts. The appendices (1-3) in Part 1 are related to e-Business at ING Insurance Asia/Pacific. The appendices (4-7) in Part 2 are related to literature research and workshops. The tools that are part of the developed framework for assessing new e-Business projects are laid out in the appendices (8-10) in Part 3. Lastly, the framework was applied to a specific e-Business project, ING Wiki. The appendices (11-15) in Part 4 will relate to this.
Part 1 E-Business at ING Insurance Asia Pacific ... 3
Appendix 1: The e-Business Page on the ING Insurance Asia/Pacific Intranet, and the Page for This Research... 3
Appendix 2: Examples of (Future) e-Business Projects Themes at ING Insurance... 4
Appendix 3: Example of Objectives of an E-Business Department According to the Towards Performance Excellence Framework ... 5
Part 2 Literature Research and Workshops... 6
Appendix 4: Real Life Examples Illustrating the Limitations of the Gartner Model... 6
Appendix 5: List for Workshop on Measures to Include for the Template ... 8
Appendix 6: Outcomes of the first Workshop, Monday October 3, 2005 ... 13
Appendix 7: Outcomes of the Workshop during the Global e-Insurance Conference in Hartford, USA... 14
Part 3 Tools to Assess e-Business Projects... 16
Appendix 8: Tool 1: Financial and Non-Financial Performance Measures Template... 16
Appendix 9: Tool 2: Intangible Benefits of e-Business Projects... 17
Appendix 10: Tool 3: Risk Checklist for e-Business Projects... 19
Part 4 Assessing the Performance of ING Wiki... 21
Appendix 11: Survey on Searching Information ... 21
Appendix 12: Time-Motion Study on Search Times ... 25
Appendix 13-16: Pessimitic, Expected, and Optimisitic Scenario for ING Wiki ... 26
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Part 1 E-Business at ING Insurance Asia Pacific
Appendix 1: The e-Business Page on the ING Insurance Asia/Pacific Intranet, and the Page for This Research
Figure 1: Screenshot of the e-Business Page on the Insurance Asia/Pacific Intranet Page that Contains a Link to the Page for this Research, Shown in Figure 2.
Figure 2: Screenshot of the Page Created for this Research, Accessible through the e-Business Page.
Appendix 2: Examples of (Future) e-Business Projects Themes at ING Insurance
Below is a list of e-Business projects themes/subjects that have been rolled out, or that may be rolled out in the future, at ING insurance Asia/Pacific.
• General company information
• General product information
• Rates for home, car and travel insurances available on website
• Retirement calculator for as planning tool available on website
• Calculators for life insurance
• Downloadable application forms for general insurances
• Online sale of simple, general insurance, such as travel insurance
• E-Insurance game for 14 year old students
• Secure website for agents to obtain quotes for different insurance products
• Secure site for customers to change policies, renew or cancel policies, submit claims
• Secure site where agents can check the status of policies currently pending underwriting
• Automated underwriting procedures
• Online alerts to policy owners when their policy is expiring
• Tracking of leads; how many leads will eventually become customers
• Agents having access to insurance rates through PDA’s
• E-Learning network for agents
• Launch of a new intranet
• Auction site where customers can compare the rates of different insurances
• Pick-Ur-advisor: after reading the profiles of insurance advisors, the customer is able to
decide their personal insurance advisor
5
Appendix 3: Example of Objectives of an E-Business Department According to the Towards Performance Excellence Framework
Figure 3 shows an example of how an e-Business department in ING Insurance
Asia/Pacific can structure its strategic Middle Term Plans (MTP) according to the Towards Performance Excellence framework.
Figure 3. Objectives of an E-Business Department According to TPE.
Part 2 Literature Research and Workshops
Appendix 4: Real Life Examples Illustrating the Limitations of the Gartner Model
In this appendix the limitations of Gartner’s Four Level of Web Site Sophistication model (Figure 4) will be explained using real life examples.
Figure 4: Gartner’s Four Level of Web Site Sophistication (Source: www.gartner.com )
According to the Gartner’s model, an organization should be striving for a level of websites that fully integrates services. Given two real life examples, an organization may not always want to fully integrate their services through their website.
For example, two years ago ING Life South Korea offered life insurances policies through the internet
1. From a customers point of view, everything could be done online (from applying to buying), which was, and still is very revolutionary for life insurance. Also, South Koreans were and are relatively one of the highest internet users in the world
2and use the internet for purchasing a wide range of online products, even sandwiches. However, the website was not successful at all and was taken of the internet. One of the situational factors that played a role could be that that people buying life insurances still wanted face- to-face contact.
1
As acknowledged by Hyunpil Kim of ING Life Korea
2
http://www.internetworldstats.com/stats3.htm
7
Another example: HSBC has been very successful in Hong Kong with their offering of life insurance through the internet. The offering is done through the internet where the
customer can easily fill out the application forms, but the customer still has to go to the
bank to complete the last step in the buying process. Although logically a fully automated
process would make more sense, the HSBC model has proven to boost sales. Therefore,
automating all steps may sometimes not be necessary.
Appendix 5: List for Workshop on Measures to Include for the Template
For each of the performance measures shown in Tables 1 through 4 , department members had to state whether a performance measure: a) should be included in the to-be-developed template; b) could be included in the to-be-developed template; c) didn’t know whether to include it; d) should be changed/renamed.
Financial performance measures were a separate list since these would be applicable to both the employee/agent template and the customer template anyway. So having these financial measures as a separate list would make the employee/agent template and the customer template shorter, and thus easier to go through during the workshop.
Financial and General Performance Indicators for Any Project
Performance Measure
Should be included
Should Not Be Included
Don’t Know Change KPI to…
Start up costs Development time Implementation time Fixed costs:
Cost of assets
Costs of maintenance
Depreciation Variable costs:
Total variable labor costs per customer
Total savings on variable/fixed costs per year after investment Net Cash Flows Year 1:
Year 2:
Year 3:
Year 4:
Year 5:
Year 6:
Year 7:
Year 8:
Year 9:
Year 10:
Economic life of investment
Years to break-even Net Present Value ROI: Total savings/Total Investment
Switching costs if decided
to abandon project
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Other, namely…..
Table 1: Financial and General Performance Indicators for Any Project.
Employee/Agent Performance Measures
Dimension/
e-Budgetary Issue
Performance Measure Should be Included
Should Not Be Included
Don’t Know
Change KPI To…
Attract Number of website visits (general)
Number of return visits Other, namely…….
Hire Number of visits if the job section on the website Number of filled in job applications online
(A) Processing time needed per application
(B) Labor costs/hour Total variable labor costs per application as a function of (A) * (B)
Other, namely……
Train How much time does it take for an employee to perform a certain task?
How much working time is occupied by training time?
What is the average cost of labor performing a certain task?
What costs are saved after training? = (time saved by employee to perform task*labor costs)- (training time of employee *labor costs)-training costs Other, namely……
Equip/
Perform/
Number of logins Retain Number of documents
downloaded
Number of applications
completed online
Number of applications abandoned online
Number of policies renewals Percentage of policy renewals online
Number of policy changes information requests Number of policy changes performed online
Number of policies cancelled online
Number of applications pending underwriting/
approval
Number of complaints received
Other, namely……
Table 2: Employee/Agent Performance Measures.
Customer Performance Measures
Dimension/
e-Budgetary Issue
Performance Measure
Should Be Included
Should Not Be included
Don’t Know
Change KPI To…
Attract Number of website visits directly
Number of website visits through banners/search engines
Number of return visits Other, namely……
Educate Number of participants in online games
Average time spent by participants on online gaming
Other, namely……
Equip/Sell/
Retain
Number of logins by customers
Number of documents downloaded
Number of passwords required
Number of applications completed online Number of applications abandoned online Number of policy renewals
Percentage of policies
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renewed online
Number of policy changes information requests Number of policy changes performed online
Number of policy cancellations received Number of policies cancelled online Number of complaints received
Other, namely……
Table 3: Customer Performance Measures.
Template Risk Checklist for Any Project
Risk Key Risk Indicator (KRI)
Should be included
Should Not Be Included
Don’t Know
Change KRI to…
Reliability Is the technology architecture on which the e-Business project will run proven reliable?
Expertise Are employees/agents/
customers familiar with similar e-Business applications?
Will the new e-Business Project require extra training?
Dependence Is the new e-Business project dependant on third parties during development/
implementation/usage stages? If yes, will these third parties have access to confidential information
Strategy Does the new e- Business project align with the overall strategy of the business
unit/company?
Leadership/S ponsor
Does the project leader have experience with similar e-business projects?
Reputation Can a business
unit’s/company’s
reputation be affected
Table 4: Risk Checklist for Any Project.
by using the new e- business project; can employees/agents/
customers easily leave negative feedback?
Legal Does the e-Business project align with government regulation?
Culture Have employees/
agents/customers proven to be open to using similar e-Business projects?
Is the new e-Business project already applied in a different area and copied as a best practice? If yes, have adoptions been made to align with the local culture?
Identification Will the new e-Business project require users to identify themselves? If yes, have measures been taken to restrict fraud?
Security Will the new e-business project require new security measures (e.g.
new
hardware/software)? If yes, are these costs included within cost calculations of the e- Business project?
Privacy Will the new e-business
project make use of
personal information? If
yes, have disclosure
preventions taken?
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Appendix 6: Outcomes of the first Workshop, Monday October 3, 2005
Goal of the workshop with e-Business department members of the ING Insurance Asia/Pacific Head Office was to agree on the clustering of e-Business projects in homogeneous groups. Furthermore, during this workshop the lists of performance indicators identified (see Appendix 5) were discussed. Everyone agreed that e-Business projects within ING Insurance can be aimed at three main groups: employees, agents and customers. These include both current and potential future employees, agents, and customers.
Before making comments on the performance measures, one of the e-Business department members noted that, when building the template, it would be useful to include an online dictionary on some of the terms, allowing the template to be more understandable to the users. All other department members shared this idea.
When going through the list of financial performance measures, the department members commented that for e-Business projects, the costs consist mainly of human resource costs.
These costs had to be specified as a separate heading. Initially, a vary broad distinction in costs only mentioning costs of assets, costs of maintenance, depreciation and variable costs had been made.
Another note that was made was that the financial goals of e-Business projects are to a) create cost savings, b) increase revenues, or c) do both. Thus, on the template, applicants should choose which is relevant for their project. After users have recognized the financial goal of the project, they can state the future cash flows for their project.
When going through the employee/agent performance measures, the department members agreed on several aspects that needed to be revised. First of all, a general remark was that more conversion ratios should be included. A conversion ratio is the average number of visitors who visit the site who make a purchase or perform some sort of action
3.
Secondly, the dimensions attract and hire needed to be merged into one dimension, since the performance measures within these two groups are so closely linked.
Furthermore, the performance measure number of filled in job applications online had to be split up into number of job applications received online and number of successful applicants in order to measure how useful online applications really are.
Finally, employee/agent performance measures originally included several cost aspects, such as what costs are saved after training.’ However, the department members agreed that these aspects should al be included in the financial performance measure list to make the template more orderly structured.
3www.discountclick.com/
Appendix 7: Outcomes of the Workshop during the Global e-Insurance Conference in Hartford, USA
During the Global e-Insurance Conference in Hartford, U.S.A., the purpose of designing a framework for assessing new e-Business projects was explained.
Figure 4: Screenshot of Presentation Slide Explaining Reasons for Research.
A small demo was shown of the measures created in Tool 1 so far. Then, groups of four
were formed, and each group had to do a small assignment. This assignment made the
participants think about how non financial measures related to e-Business projects can be
presented in a form such that senior management can give meaning to them.
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Figure 5: Screenshot of Presentation Slide Explaining the Assignment.
Relevant Outcomes of this Session
First of all, a general remark by a participant was made that e-Business projects should be treated like any other project, and he argued that there should be no distinction. I agreed, but considering that the outcomes of e-Business projects are often ‘soft’, I persuaded the participants to analyze and give feedback on the different performance measures.
Some measures can be interpreted differently depending on the goal of a project. For example, the number of logins can increase. This can be positive for an e-Business project that is aimed at increasing the usage of a website designed for insurance agents. An increase in number of logins is not necessarily positive for an e-Business project that is aimed at increasing speed of processing application forms or a project that is aimed at the integration of websites (since more logins cost more time).
Therefore, it is important to firstly identify the goal of the e-Business project, and how it contributes to the overall strategy. Then, for each measure it must be identified whether increases are positive or negative.
Another aspect that was not included in Tool 1 was the usage of email as a mean for
customer retention. A measure that can be derived from this is the number of clicks on links
that are sent via email to customers.
Part 3 Tools to Assess e-Business Projects
Appendix 8: Tool 1: Financial and Non-Financial Performance Measures Template
The first tool created to assess e-Business Projects is Tool 1: Financial and Non-Financial
Performance Measures Template. This appendix is available in the Microsoft Excel
attachment.
17
Appendix 9: Tool 2: Intangible Benefits of e-Business Projects Employees/agents:
The e-Business Project Is Aimed at:
Intangible Benefit Yes/No
Attracting/
Hiring:
Improved Brand Awareness: the level of familiarity potential agents/employees have with ING.
Improved Brand Association: the degree to which potential agents/employees match ideas/concepts to those of ING.
Improved Brand Favorability: the degree to which potential agents/employees have preference for working for ING.
Improved Message Intent: the degree to which potential agents/employees will actually want to work for ING.
Training/Equipping/
Quicker access to documented information within ING due to:
Increasing
-Higher quantity and quality of content available
Performance of:-Better tools to find and/or use content
-Better presentation of content
Easier access to tacit information of ING employees/agents due to:
-Higher quantity and quality of tacit documents -Better tools to convert/ tacit to tangible knowledge -Bottom up and self-motivated contributions More interaction among employees and/or agents.
More/faster interaction among employees and customers.
Better service quality delivered to customers.
Tools that give better insight in customer profiles.
Tools that allow better competitor analysis.
Supply employees/agents with tools that increase responsiveness to market information and meet customer expectations:
-More easily adjust existing services.
-More easily adjust prices of services.
-Shorten the development time of new services/time to the market.
Retaining:
Improved confidence of employees/agents with ING as a business partner.
Making working for ING more enjoyable.
Table 5: Intangible Benefits of e-Business Projects Aimed at Employees/Agents.
Customers:
The e-Business Project Is Aimed at:
Intangible Benefit Yes/No
Attracting:
Improved Brand Awareness: the level of familiarity (potential) customers have with ING.
Improved Brand Association: the degree to which (potential) customers match ideas/concepts to those of ING.
Improved Brand Favorability: the degree to which (potential) customers have a preference for ING.
Improved Message Intent: the degree to which customers will actually want to do business with for ING.
Educating:
Attracting future customers by familiarizing them with ING and its services.
Increasing customer satisfaction by keeping existing customers regularly informed (see below).
Equipping/Selling to/
Increased satisfaction about an insurance product:
Retaining:
- Finding information about the product is easier.
-Buying the product is easier/less time consuming:
•
Less forms needed:
•
Improved payment procedures.
•
Cross/deep buying: less search time for equal products is needed.
-After sales service is better
Increased satisfaction about the service delivered:
-Responsiveness to questions.
-Completeness of information supplied to them.
Improved perceived trustworthiness of ING as a sales partner:
-Increased technical reliability of computing systems used by customer.
-Increased trust of customers concerning ING handling personal information.
Supplying existing customers with tools/information to manage future needs/purchases more easily.
Table 6: Intangible Benefits of e-Business Projects Aimed at Employees/Agents.
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Appendix 10: Tool 3: Risk Checklist for e-Business Projects
# Risk
Category
Description Yes No
1 Strategy The project is not part of the e-Business MTP (medium range plans)
2 Leadership There is no project manager
3 The project manager has no prior experience with projects of similar scope
4 The project manager has no prior experience with projects of similar technology
5 The project manager is managing more than 1 project on a full time basis
6 Team
Expertise
The project requires project team members to use new programming languages
7 The project team has no knowledge or experience with the applications/systems required for this project
8 Less than 50% of the project team has never worked together in a team
9 The project team has to deliver the project in more than 3 physical locations
10 The estimated delivery time of the project is more than 6 months, or there is no specified project delivery time
11 Organization and
Customers
The project is created without a registered demand from a (internal) customer
12 Employees/agents/customers have not used similar applications/systems that will be used in the project.
13 Changes to the organizational structure will be necessary
14 There are new internal procedural changes required to support the project
15 The number of employees/agents/customers required to use the project is more than 10.
16 For employees/agents/customers who are required to use the project there is no similar alternative is available.
17 The project has not gotten approval from general management
18 Reputation Internal information (used in the project) leaking to external parties may harm ING’s reputation.
19 Employees/Agents/Customers could use the
tools/applications the project offers to express concerns that may harm ING’s reputation.
20 A third party’s products/name is used for or associated with the project
21 Technology The project requires new hardware.
22 The project requires new systems software
23 The new software/hardware cannot be tested before its implemented
24 The project requires distributed data processing (processing
through more than 1 system)
25 There is no documentation on the technology or the documentation is complete for 75% or less
26 The system/application requires an online response time of 2 seconds or less, 90% of the time
27 Security A third party is involved
28 The third part involved is new/unknown
29 The third party is in the same industry
30 More than 3 third parties are involved
31 The information processed by the project is personal
32 The information processed is confidential (only for ING employees or a certain group ING employees)
33 Users cannot be tracked (registration is not required)
Table 7: Risk Checklist for e-Business Projects.
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Part 4 Assessing the Performance of ING Wiki
Appendix 11: Survey on Searching Information
To find out how ING Wiki could lead to opportunity savings, a survey was send out to employees of different departments within the ING Insurance Asia/Pacific Head Office.
The questions and the results of this survey are shown below.
Survey Reponses
Question 1) Remember when you just started working at ING Asia/Pacific? It probably took some time before you got settled. Actually, how much did you use the following sources to search for information (on a scale of 1-5)?:
Least Average Most
1 2 3 4 5
Searched the
internet 11 4 4 3 2
Searched the
intranet 4 4 6 5 5
Searched the
network drives 4 6 5 6 3
Emailed colleagues 1 3 7 9 4
Asked colleagues 0 1 3 8 12
See also tab 'Graphical Results'
Question 2) Back then, for how many weeks/months did you have to search for information until you felt confident about your knowledge?
Absolute %
One week 3 12.5%
Two weeks 7 29.2%
Three weeks 4 16.7%
Four weeks 5 20.8%
Two months (8
weeks) 0 0.0%
Three months (12
weeks) 5 20.8%
Average weeks an employee searches for information until he/she
feels confident = 4.54
Please also estimate the time you spent on searching for information during each week:
Average hours week
1 15.29
Searche d the Internet
0 2 4 6 8 10 12
1 2 3 4 5
Used Internet to Find Information (=Least, 5=Most)
NumberofEmployees
Figure 6: Using the Internet to Search for Information when Starting at ING Insurance Asia/Pacific.
Average hours week
2 11.88
Average hours week
3 8.54
Average hours week
4 6.54
Average hours month 1 (total weeks
1-5) 42.25
Average hours
month 2 (week 5-9) 7.02 Average hours
month 3 (week 9-13) 6.83 Other comments:
Average number of hours searching for information during 4.5 weeks = 43.20 Question 3) If an information source would be created where all information is accessible through one source, would you be willing to contribute to it? If yes, approximately how many hours per week would you be willing to contribute to it?
Average number of hours an employee is willing to contribute to an information
source = 3.08
Question 4) Nowadays, how many hours do you estimate you weekly spend on searching information that is not directly related to your area of expertise?
Average number of hours an employee weekly spends on searching
information = 2.63
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Searche d the Intranet
0 2 4 6 8 10 12
1 2 3 4 5
Used Intranet to Find Information (1=Least, 5= Most)
NumberofEmployees
Figure 7: Using the Intranet to Search for Information when Starting at ING Insurance Asia/Pacific.
Searched the Netw ork Drives
0 2 4 6 8 10 12
1 2 3 4 5
Used Netw ork Drives to Find Inf ormation (1=Least, 5=Most)
NumberofEmployees
Figure 8: Using the Network Drives to Search for Information when Starting at ING Insurance Asia/Pacific.
As ked Colleague s
0 2 4 6 8 10 12
1 2 3 4 5
Asked Colleagues to Find Information (=Least, 5=Most)
NumberofEmployees
Figure 9: Asking Colleagues to Search for Information when Starting at ING Insurance Asia/Pacific.
Em ailed Colleagues
0 2 4 6 8 10 12
1 2 3 4 5
Used Internet to Find Information (1=Least, 5= Most)
NumberofEmployees
Figure 10: Emailing Colleagues to Search for Information when Starting at ING Insurance Asia/Pacific.
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Appendix 12: Time-Motion Study on Search Times
To find out how ING Wiki could lead to opportunity savings, a time-motion study was held in which four employees received nine general subjects outside their area of expertise. The following subjects had to be searched: Compliance, Whistleblower, Ethical Standards, Investment Management, Hedge Fund, Fixed Income Bond, Term Life Insurance, Bancassurance, and Endowment Life Insurance. The employees had to search existing knowledge databases and the existing Wikipedia
4site to find definitions of the terms until they felt they had satisfactory knowledge about a subject. As the ING Wiki was still very new and did not contain a lot of content yet, the existing Wikipedia site was used to find information about the subjects.
Average time (minutes) to find definitions through existing tools in ING*
Average time (minutes) to find definitions using Wikipedia Employee 1 (David
Nieuwenburg)
6.8 3.2
Employee 2 (Candice Franklin)
5.2 0.8
Employee 3 (Nicole Leung)
6.2 0.6
Employee 4 (Pallavi Chopra)
9.3 0.7
Average for employee 6.9 1.3
Time savings using Wiki 5.6
Table 8: Search Times using Existing Tools in ING versus Wikipedia.
*If a definition could not be found through electronic sources, a colleague must have been
contacted. This search time was averaged at 5 minutes initial search time using electronic sources (until an employee gave up searching through electronic media) + 5 contacting and response (from colleague) time. Therefore, if a definition could not be found using electronic sources, the search time was 10 minutes.
4
