CIS 321 Case Study 'Employee Benefits System (EBS)' EBS Case Introduction In this section you will learn the background information that will prepare...
CIS 321 Case Study ‘Employee Benefits System (EBS)’
EBS Case Introduction
In this section you will learn the background information that will prepare you to understand and complete each of the milestones of this case study. This information includes a history of the business, a description of the business’s current facilities, and the descriptions of the problems that triggered the project.
General Company Information
The Conover Insurance Company, Inc. serves nearly 10 million customers nationwide, offering a variety of products and financial services, such as pension funds, annuities, automobile insurance, homeowner insurance, and life insurance products. More than 800 companies entrust Conover Insurance Company to manage their life insurance and other financial funds. Conover Insurance Company employs more than 4,100 people and reported 2002 revenue of more than $40 million.
The Human Resources Department has become top priority in improvements for the coming year. The project’s objective was to significantly decrease processing time and increase the functionality in our current employee information benefits and services. In order to meet the new technology improvement addressing our current Human Resource processing, other departments, systems and/or business will be impacted, from with our company and outside of our company.
Note: See the organization charts at the end of this document for more details.
Case Background
Information Systems (IS) headquartered in Orlando, Florida, employs approximately 4,100 employees throughout the United States. IS provides leading edge technologies, distributed computing, mainframe, micro, communication, and consulting services to its parent company Corporation, headquartered in Bethesda, Maryland, as well as to external customers including the U.S. government. In addition, IS is responsible for the development and support of all the internal systems that support their day-to-day business processes and operations.
IS currently operates in five sites across the nation and they are as follows:
Each site is responsible for servicing and supporting the customers in its region as well as its internal employees. IS has experienced a 15 percent increase in employees over the past two years, and long-range projections show that trend continuing for the next three years.
Organization Structure
The Conover Insurance Company contains the following departments on the organization chart below. Each department is structured based on the five site discussed in the Case Background section.
The Problem
Due to the tremendous growth the company has experienced in recent years, it has recognized that to ensure the continued success of servicing internal as well as external customers, it needed to develop a strategic plan and vision for the use and modernization of its computing resources. The challenges of creating centralized systems across all five IS sites to support business practices that are common if not identical across the sites further emphasize the need.
In January 2003 a strategic plan to modernize the company’s resources was presented to executive management. This document included a plan to reengineer the current systems to use state-of-the-art technology and provide a showcase of systems that eventually could be delivered across the whole corporation.
The plan consisted of reengineering all systems related to Human Resources, which included Employee Information, Time and Attendance, and Payroll. The first phase is the development of the Employee Benefits System (EBS), a system that will house the repository containing the employee master data, which is the foundation for providing a common set of automated, integrated, platform-independent system solutions for Human Resources. Several business processes/work flows, procedures and forms need to be analyzed along with addressing new requirements.
The new employee benefits system should provide the capability for each employee to maintain his or her own information regarding address and telephone number changes, beneficiary changes, United Way deductions, and Savings Bond deductions. Current practices now have each of these changes being processed by an extensive manual effort in which Human Resource administrators fill out forms and input the data. This manual effort often results in a time lag of several days between the time the employee submits the forms and the online update. This delay caused several problems: employees were unable to quickly locate other employees, company mailings were being sent to the wrong addresses, payroll checks were unable to be delivered, paper-based company telephone books were out of date almost as soon as they were printed, and United Way and Savings Bonds contributions were less than ideal.
By providing the capability for an employee to update data themselves in real time, the problems mentioned above can be reduced, if not eliminated.
The Objective
The new Employee Benefits System (EBS) should provide a single central repository of employee information. The Staffing Department provides new employee profile information and employee status changes. The Staffing Department needs staffing reports on a weekly, monthly, and yearly basis. The employees provide employee profile changes on selected information, as well as United Way and Savings Bonds contribution activity. Although both are employee deductions, the Savings Bond option is part of the employee’s retirement/investment plan information. We would like to offer other types of contributions in the future, such as Hands on Atlanta, Aid Foundation, the Cancer Research Society.
The EBS system should generate on request Employee Participation Reports for management, and Savings Bonds and United Way Contribution reports for the Employee Relations Department. The system must get the employee’s current salary from the Payroll database in order to process contribution activity only, not the entire payroll processing. Therefore, the employee contribution activity records (and/or any other deductions) are sent to the Payroll System. In addition, some basic employee history information on job performance, ratings, and departmental information will be collected for this new EBS system. Finally, an employee telephone listing can be generated for any employee who requests it. Some of the basic information on this report will consist of Department, Job Description, Site, Room, Building and Company Mail Stop data (see screen exhibit).
The new EBS systems must be able to handle additional benefits we would like to offer our employees. As part of the retirement plan, employees can now sign up for the investment plan (401K) and Company Stock Purchase Options and Saving Bond deductions. In addition, the new EBS system will offer basic life insurance, and short-term disability. Life insurance will be offered based on the one times the employee’s annual salary, if the employee is new, and two times the employee’s annual salary, if the employee has five years of service or more. For example, an employee with 7 years of service, earning $25,000 annually can elect to buy $50,000 worth of life insurance. For short-term disability, we need medical information/confirmation on pre-existing health issues before we can determine the short-term disability approval or amount. Long-term disability is not offered at this time.
We would also like new EBS system to know whether the employee has elected medical coverage (health and dental), although the processing and maintenance of medical and dental information is outside of this new EBS system. The medical coverage information will be sent to the Employee Health Care (EHC) System. If the employees do not elect coverage with our company benefit package, they must have proof of basic medical coverage some where. In addition to medical coverage selection information, the new EBS system will be collecting basic spouse and dependent information to be sent to the EHC system.
All employee benefit enrollments are the first of each year. If there is a change in marital or dependent status during the year, the employee can update their benefit information with proof of the status change, accordingly. If a new employee wants to purchase automobile, home and/or renters insurance with our company, we want the new EBS to submit a notice to the Auto & Home department to follow-up with that new employee request for services.