National Insurance Company(2)

8/8/2019 National Insurance Company(2)

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National Insurance CompanyNational Insurance Company

Presented by:Presented by:

RuchikaRuchika MazumdarMazumdar

Shikhar Singh SengarShikhar Singh SengarU. Prabir JaiswalU. Prabir Jaiswal

Ujjal BanerjeeUjjal Banerjee


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Growth and continued growth.

Early in stage three.

Budget growing on an average of 50% peryear over the past five years.

Different computer configurations and avariety of application softwares.

Operation mode - batch processing.

Various media to store data.

Existing Environment


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Problems in MIS functionProblems in MIS function

Growing customer complaints Slow loan processing

Mistakes in regular premium billing.


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SolutionSolution

Appointment of Consultant by the President


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Questions

Is the President over reacting to

this situation?


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NONO

It is a natural growing concern with anyperson at authority.

The recommendations provided by theconsultant were far reaching.

There was too much to be done in too littletime.

Presidents major concern was budget andcompanys culture.


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Question 2Question 2

How did National get into this situation?

Is it natural evolution?

Who is responsible for it?


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Lack of budgetary and inventory planning.

Lack of capacity planning

Decentralized purchasing policy


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It is a natural evolution in anyorganization.

It is managements responsibility to

ease out the situation.

THUS,


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What do you think of the

approach suggested by theconsultant. Is it practical? Is it

necessary?


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Practical to a certain extent.

Use of too many techniques at the

same time.

The approach suggested by theThe approach suggested by the

Consultant was:Consultant was:


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The Techniques were:

RiskAssessment

Project managementLong Range Planning

Executive Steering Committee

Need for an Integrated Data baseInformation Resource Management.


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Although the Consultant has given effective solutions

for reengineering the MIS, the solutions are too manywhich has to be done in a short period of time that

might lead to damaging effects.

But ,certain suggestions can be helpful for theorganization as the first step to reequip the system

such as:

Setting up a Steering Committee.Building of long Range Plans.

Setting up a Centralized data base.


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Will the consultants sweeping

recommendations fit the cultureof National? Is a company in this

position ready for strict controls?


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Growth and more growth(Proliferation)

Acquisition of new lines of business and new

companies.

Applications added to handle new lines ofbusiness.

New hardware being added to the business.

Budget growing on an average of 50% per year

over the last 5 years.

Computer complex installed ten years ago

Major operation mode of MIS is Batch

Data bases exist on a variety of media

Culture of National Insurance:


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ContinuedContinued

No, the recommendations given by

the consultant does not strive to fitthe culture of National Insurance.

Because it could lead to a drastic

change in the organizationalstructure.


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22ndnd part..part..

No, the company is not ready to take strict

controls.

Reasons

Growing market competition

Increasing customer complaints

May damage the future growth

Organizational flexibility will be hampered


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Can a company progress from stage 2 through

stages 3 & 4 simultaneously?

That is, can they institute proper control

mechanisms while instituting the integrated data

base, long-range plans, steering committees, & so

on, that are the elements of Information Source

Management?

Question 5


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The StagesThe Stages--ofof--Growth ModelGrowth Model

The stages-of-growth model is a theoretical model for

the growth of information technology (IT) in a

business or similar organization. It was developed byRichard L. Nolan during the 1970s, and published by

him in the Harvard Business Review.

The first article was published in 1973 and consisted

of only four stages. Two additional stages were added

in 1979 to complete his six stage model.


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Six Stage Growth Model


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Stage IIStage II ContagionContagion

(Uncontrolled Expansion)(Uncontrolled Expansion)

There is a pro lifera tion of applications .

Users are superficially enthusiastic about using data

processing.

Management control is even more rel axed .

There is a rapid growth of budgets.

Treatment of the computer by management is primarily as

just a machine.

Rapid growth of computer use occurs throughout the

organization's functional areas.


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Stage IIIStage III ControlControl

There is no reduction in computer use.

IT divi sion's importance to the organiza tion is greate r.

Centralized controls are put in place.

There is use of database and communications, often

with negative general management react ion.

End user frustration is often the outcome .


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Stage IVStage IV IntegrationIntegration

A larger data processing budget growth exists.

There is greater demand for on-l ine database faci l i t ies.

Da ta pro ces sing depar tment now operates l ik e a

computer uti l ity.

Th ere i s fo rmal pl anning and c ont rol wi thi n d ata

processing.

The use of steering committees, applications financial

planning becomes important.

Data processi ng has better management control s and

set standards.


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Conclusion:Conclusion:

If a company is functional in Second Stage,

then it means that the company is in a state of

Uncontrolled Expansion. Then it is not

possible for the company to Integrate it s

Information System without Controlling it

properly because it will further create more

problems rather than solving them.


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National Insurance Company(2)

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