In the insurance business, everyone's headed into the hinterland. But the cost of every new branch can bite deeply. Here's how going Open Source helped ING Life save US$1.7 million and funded its expansion plans.
The Rupali Restaurant is pretty much last place you would expect to find life insurance. But this ramshackle roadside pit stop in Bhubaneswar, Orissa, is an excellent location for ING Life to sell insurance: in recent years the dhaba has got so popular that a chowk had been named after it.
But this was not going to be an easy endeavor. "They only had two desktops. The place operated without air conditioners, coolers or even a UPS," recalls Ravishankar Subramanian, director-IT and corporate services.
Also, at 20 per cent of a new branch's cost, IT was the second largest chunk and limited the insurer's ability to provide facilities and still keep costs low.
- The project was halted during the insurance industry's peak season between January to March. The three-month gap gave Subramanian's team a chance to proactively spot issues and resolved them.
- Even after the adding the costs of travel for the implementation and onsite support and training, Subramanian has still saved the company a truck load of money.
According to a 2007 IIMS Dataworks survey only 27 percent of paid workers in rural areas had insurance, compared to the 47 percent penetration in more urban regions.
"Also, competition in the rural hinterlands is low compared to the metros where all players exercise their muscle. We feel that a high growth potential exists in rural and semi urban areas," adds Ashwin B., COO, ING Life Insurance.
Opening a window of opportunity
If Subramanian wanted to contribute to the rural push, he knew he would have to lower the cost of setting up branches by attacking IT infrastructure. Some IT optimization had already been done for him. But hardware was a modest cost-reduction target and delivered short-term tactical gains.
In order to achieve longer term benefits, Subramanian wanted to target software costs. That's when he decided to present a SUSE Linux Enterprise Desktop (SLED) plan to the senior brass in Hong Kong.
It would also allow each desktop to pay for itself in seven years. Going open source dramatically reduced the Rs 85,000 ING Life was paying Microsoft for every PC running Windows XP over a six year period.
With the success of the pilot, Subramanian felt confident of embarking on a final roll out. And he did it quickly. Between June and December of 2008, ING Life moved 1,200 of its 2,000 desktops to Open Source.
Getting on with the program
"When I first heard of the migration, I was very apprehensive. I thought the cultural shift would be very hard," says Venkat Reddy Peddolla, deputy manager, customer service, Secunderabad, ING Life.
"My biggest fear was adapting to a whole new range of changes. My level of technical expertise isn't very high. Making adjustments to Linux was a big deal."
To ensure he didn't become another failure statistic, Subramanian put together a multi-pronged strategy to ensure that the project, now in the air, stayed there. He did was to ensured that users, enterprise wide, knew that management backed the open source push.
And he found the strongest communication channels within the organization to spread the word: he sought management's help to communicate the vision of the change.
"I knew the cost involved with working on MS Office and we all understood the need to reduce that cost. I understood that it was only matter training. The change was not as hard as I had anticipated," says Peddolla.
He also hired an open source helpdesk team from an outsourcer.
"We have a remote support team, but we needed an additional, focused team to support people when they had problems." says Subramanian.
Oh! For open
The project's success isn't limited to happy employees. Even after the adding the costs of travel for the implementation and onsite support and training, Subramanian has still saved the company a truck load of money.
At only about Rs 2,000 per SUSE license a year, he's saving ING Life Rs 43,000 on every machine over six years.
Today, eight years after it opened its doors, the Bangalore-based ING Life has a network of 265 offices spread out over 234 cities and towns.
But that's still a far cry from ICICI Prudential Life Insurance's 2,100 branches (which also began operation about eight years ago).
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