social security business processes – lessons from european experience managerial changes and...

Social security Business processes – Lessons from European experience

Managerial changes and Business processes

1. Reasons for changes

2. The structure of changes

3. How do ICT influence over social security reforms ?

4. A few remarks on selected procedures (registration, contributions, compliance, awarding benefits)

By:Jean - Victor Gruat

5. ICT as a strategic management tool


Standardized Business Processes:What For ?

1. Reduce managerial costs

2. Improve accuracy in delivery

3. Enhance control / monitoring

4. Achieve higher degree of satisfaction with clients


Change for the Sake of Change is no progress

Like all processes, business processes require evaluation

1. Benchmarking

2. Critical review

3. Adequacy with objectives


How to structure change initiatives ?

Source: ISSA/Accenture survey 2007

Experience in changing social security business processes from 17 European countries (40 projects)

Austria, Belgium, Bulgaria, Cyprus, Estonia, France, Germany, Ireland, Italy, Lithuania, The Netherlands, Norway, Poland, Spain, Slovenia, Sweden, Switzerland


• The Theory of Change

• Nine factors are expected to influence the quality of changes

• Readiness for change;• Effective leadership;• Mobilising support;• Effective planning;• Communication;• Teamwork;• Governance;• Implementation;• Risk management


• Categories of changes

• From most trivial to most fundamental

• Changes in work processes (40%);

• Changes in organisation & structure (30%);

• Changes affecting people & performance (20%);

• Changes in benefits and programmes (10%)


• Aspects of organization affected

From compensation to service delivery, altogether 14 areas (not exclusive)

Service delivery (18%); Governance (16%); Technology(15%); Products / services (12%) Structure (10%); Staff (8%) Skills (7%) Strategy (7%) Finances (5%) Beneficiaries (4%) Communications (4%) Policy (4%) Facilities (3%) Compensation (2,5%)


How to ascertain readiness to change ?

Ten factors of varying influence and prevalence taken into consideration

• Employees eager for another initiative

• Employees trust management • Organization open to new ways of

working• Managers trust staff• Employees work well together• Employees care about

organization and its impact• Employees support the goals of

the initiative• Managers listen to employees• Similar initiatives succeeded in the

past• Employees believe constituents

will benefit

Correlation with effectiveness

HIGHMEDIUM

LOW


• Never minimize the risks !

Operational and technical risks are most frequent

… but others do exist too.

• Organizations tend to underestimate risks (rate all moderate or below)

• Financial risks are always present

• But also policy (adverse effect) and political (social rejection) risks

• Low level of personal risks may mean managers not fully implied in change process

• Lowest level is legal risk: shows that change has to be properly authorized


• Internet and Communication Technologies – ICT –

and social security transformation

Excerpt from compilation made on occasion of ISSA General Assembly, Moscow 2007

• Four key aspects govern ICT contribution to social security transformation

Integrated services (involve partners outside organization itself)

Identification of clients is more accurate and allows for cross checking

ICT supports more global concerns, not replacing them (Business Processes Re-engineering – BPR – approaches)

ICT generates some risks, but helps overcome others (facilitates feedback, monitoring, testing for adjustments)


• Special concern and interest:

Four Procedural Aspects

Registration and changes (employers and employees)

Contributions collection and recording

Compliance and enforcement

Award and payment of benefits


• Registration and Changes

Social security numbers are at the core of architecture

Have to identify both employees and employers – and for the latter establish system allowing for link between HQ and outlets

Numbers have to be reliable and unique

At the same time respect privacy and allow for linkages among different areas

Use of ID number as sole entry point can be criticized; if web access, need to add PIN to number; key added to number to avoid mistakes


• Registration and Changes / Examples

BULGARIA

Employers and insured persons can manage their social security status via Internet. The system uses PIC – personal identification code – to authentify users

BELGIUM

When worker leaves employer, the latter can communicate information via phone, internet, electronic file transfer and even GSM/SMS


• Contributions collection and recording

Identify worker, identify employer

A worker may have multiple employers

Avoid multiple declarations for employers (avoid selection of risks covered)

Encourage employers to transmit data electronically

Request workers to cross check data recorded on individual accounts


• Contribution collection / Examples FRANCE Employers have access to the following services

via the internet: declare recruitment, declare and pay contributions, access entreprise account. A special certificate is issued also via internet to registered employers allowing for secure performance of operations.

BELGIUM

Multifunction declarations by employers provide data to different social security branches from one single input. The private sector was slow to adapt, which required an extensive complete business process reengineering – BPR


• Compliance and Enforcement

Cross checking data among various schemes

Rely on workers to check employers’ declarations

Conduct physical inspections

Link with banks, tax authorities, public security

Check on personal existence of recipients (life certificates)


• Compliance & Enforcement / Examples ITALY

Multi channel virtual front office common to various schemes integrating front and back office

functions. Offers shared contact centers.

THE NETHERLANDS

Have created “Labour and Income Centers” to decrease social security managerial costs through grouping in one place the 3 pillars of social protection – employment, social security, social welfare. This grouping

facilitates cross checking via use of one single computer network and shared data.

PORTUGAL “Citizen’s shops” – Lojas do cidadão – have been established in all cities, and group under one roof or even

with one desk services initiated by a number of public agencies, such as water, electricity, gas, telephone, driving licenses, justice, social insurance, health, retirement schemes, , taxes, employment, vocational training, notarius, migration office, etc.

BELGIUM

The CBSS – Crossroads bank for social security - implements a network for mutual electronic service delivery. All actors connected to the network can mutually consult their databases and exchange up to 185 different types of electronic messages in a secure way. A social security portal is available containing integrated services (information and transactions), organized along life events of citizens (birth, employment, occurrence of a social risk, …) or business episodes of companies (starting a company, recruiting personnel, …).


• Award and Payment of Benefits

Check accuracy and completeness of records

Pay via bank transfer, free and full payment

Transfer data to social security institutions ahead of risk occurrence (notably for non contributory periods)

Allow for partial advance payment of benefits when some parts of processing face difficulties


• Award & Payment / Examples CZECH REPUBLIC

Passed from storage of image documents to electronic submission of forms. Portal for mass transfer of data between organizations with systematic use of electronic signature key – PKI (public key infrastructure) system and chip cards.

SPAIN

The Services for Pensioners website allows for online application for benefits – including those involving other organizations, e.g. for migrant workers. Website also includes an auto-calculator of benefits, as well as a virtual office accessible after issuance of a digital certificate.


Business Process Computerization

The first global conference on the use of computers in social security institutions was held by ISSA in Munich in 1978.

This year, 17th such conference will be held in Sevilla, Spain, in June 2009.

This Conference on Information and Communication technology in social security will focus on the “added value of ICT for social security”.


ICT as a strategic management tool

ICT as a support of the organization ICT is a “driver” for transformation of services and delivery. New channels

to manage sudden increases in workload, as well as collaboration and implementation of services using wireless access in remote and undeveloped areas.

ICT and the strategic impact on global management Making the choice of centralization versus decentralization and security

considerations; building of new infrastructure and architecture in a country without experience of ICT networks; interchange of data between organizations in customer service or fraud prevention; integration of social security services involving greater levels of collaboration

ICT and the transformation of social security The use of indicators to achieve high performance; the impact on clients

and community of new ways of collecting contributions and paying benefits; the set up of individual accounts for clients, electronic data exchange with companies and use of Internet; the new ways of providing social security information to citizens


Relevance of European experience for Hunan PSSB

Hunan social security organizations have reached a critical stage of development – to be efficient requires careful monitoring and efficiency in social security management

European social security institutions have gone through the same type of experience – growth, unsatisfactory performance, focus on improved governance

Above exposed principles and examples can therefore be used for assessing the options taken by Hunan PSSB – and its consulting firm, notably for computerization of business processes.

Component 2 of the EUCSS reform project has dedicated programmes to be used in area of improved social security management and governance. This workshop is an example of the type of support that may be provided – with a combination of self help and exposure to outside realities an achievements.

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