Case Studies

Case Study: Principal Financial - Modernizing a Legacy System



The Challenge

The Principal Financial Group needed to transform their legacy system after having identified several key problems in their business-critical defined benefits systems:

  • Mail volume and distribution Issues
  • Processing rules not enforced in systems, they existed purely in documentation and with specific employees
  • Physical paper handoffs were necessary to complete processes
  • High resource growth-rate to support business scalability
  • Complex systems & processing rules made training new employees time consuming and expensive, this resulted in:
  • Processing delays
  • Processing inconsistencies
  • Processing errors

The Solution

In order to address these crucial issues, Sapiens and Principal defined a solution with several key goals:

  • Simplify Workflow
  • Enforce Consistent Administrative Processes
  • Improve productivity, accuracy, timing
    • Same-day processing
  • Reduce costs associated with doing business
  • Provide competitive edge in marketplace

Consistent with these goals, Principal added new business functions and developed a task workflow architecture, which included document imaging and coordination of imaging workflow. Sapiens' approach to rapid implementation allowed the team to cut the project delivery schedule from an estimated 3 to 5 year timeline to 18 months – even with imaging workflow, which was not included in Principal's original 3-5 year timeline.

The Result

Express Processing System

  • Client/Server system delivered in 20 months
  • Installed for 100 users in December 1996
  • Rolled out to 2400+ users between December 1996 to June 1997
  • Initial volumes - 1.2 million Sapiens transactions daily in 12 CICS regions
  • Fast, accurate, paperless administration
  • Principal owns, supports and operates applications in-house

Though Principal did not specify that the initial solution should be rule-based, upon completion of the system they realized the value of such an environment.  Consequently, Express has become the key platform for Principal Financial Group's core defined benefits processing solution, and has been extended continuously to provide a fully automated solution for all activities within the division. The system has been extended to the web, and today provides browser access to over 2,000 users within Principal and millions of fund participants throughout the United States over the web, through the interactive voice response system or through Principal call centers. No matter what the route into the system, the underlying rules maintain the integrity of the process being executed.
The realized benefits to Principal of the system are:

  • Workflow and Work Prioritization
    • Transactions eligible for same-day processing are processed the day they are received
    • Ensures work is being processed by most cost efficient resources
  • Processing Rules Controlled by system
    • Enables easier training of new employees
    • Provides process consistency across departments and geographic locations
  • Reduced training costs of new employees
    • Processing rules encapsulated in the system means there is less for new employees to learn.
    • Rules that interpret user skills allow people to become productive more quickly. As soon as they are trained on 1 process, they can do that process.
  • Reduced rate of staff growth
    • Automation/Extension/Integration efforts have allowed us to capitalize on the core system. This has allowed us to eliminate large amounts of manual work that was once required.
  • Provides competitive edge in marketplace

"Sapiens provided a realistic and natural way to design the system with quick ways to build usable applications and productive middleware integration. We're handling 1,200,000 transactions every day. Our success and aggressive plans for leveraging the Internet brings additional opportunity and huge benefit to Principal Financial and our clients."

Susie Thomann
VP at Principal Financial Group