Public sector pension systems, like many other complex, data-intensive organizations, are struggling to adapt to the digital age. Most have delved into digital with a simple Web presence and added self-service features ad hoc over time. Their underlying business processes have not changed; they just developed a digital periphery. And that’s simply not enough to ensure the efficiency and outcomes that retirees and other pension system members want.
Findings from Accenture’s ongoing research into the operational performance of pension agencies indicate that to boost mission productivity and the satisfaction and confidence of their members, they should focus on digital basics—and that starts with basic back office processes.
Paper cuts
The paper-based operations that still characterize many pension systems are a huge drain on time and resources. Digitizing such operations involves a hefty upfront investment, but the potential rewards are vast.
Digitization can deliver significant cost benefits. The average cost of a digital transaction can be 20 times lower than the cost of a phone call, and as much as 50 times lower than face-to-face interaction. A recent IDC report into the role of document process efficiency ranked government among the worst performers.[1] But by measuring the progress of the process improvements that digitalization enables, public pension systems can not only accelerate the quest for more cost-effective means of public contact, they can demonstrate to their members, public sector leaders and taxpayers that they are reducing waste and operating efficiently.
Better outcomes
Measurement is key to delivering the right services and outcomes to the right “customers” at the right time.
The overarching question is one of adequacy. Are pension systems providing the needed services that sustain retirees adequately during their retirement years? Measuring and assessing the factors that contribute to the quality-of -life post-retirement, via a digital channel, can provide the vital feedback loop needed to ensure that pension systems are able to adapt services to continually improve quality of life. Social media, digital surveys and data analytics are all tools that are available today to enable real-time and convenient means for retirees to provide this feedback.
“Going digital” involves questioning old ways of working, however well established, and breaking down internal barriers and silos that may have been in place for years. Technology is opening opportunities to deliver truly transformational change, including for public pension systems. The crucial early step is to build a solid foundation, by defining key processes, costs and customer expectations. The time for public pension organizations to begin laying the basis to seize digital opportunities is well at hand.
[1] IDC White Paper: Organizational Blind Spot – The Role of Document-Driven Business Processes in Driving Top-Line Growth, September 2012
Owen Davies is managing director of Accenture’s pensions practice in North America.
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