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Accident insurer ACC faces huge change challenge

New Zealand's state-owned accident insurer is embarking on a transformation, but its capability to manage change is being questioned.

New Zealand's Accident Compensation Corporation (ACC) is kicking off a complex and potentially expensive program of change, including the likely replacement of chunks of its technology.

However, a new report (PDF) asks serious questions about the corporation's ability to deliver.

An independent performance improvement report released this month describes the change management environment at the ACC as "a potpourri of willingness to change but poor ability to implement".

The ACC says it will have completed the design and planning phase of its "Shaping Our Future" program by May 2015. The corporation is reportedly in commercial negotiations with Accenture as its preferred supplier.

However, the performance report says enthusiasm for change at the front line, driven by a "great deal of pent-up frustration" over systems and tools, is against a backdrop of "poor performance in change management".

"We found poor handover of projects to business as usual, redesignation of project success, person-driven projects without an organisation perspective, and an unwillingness to hear about project shortcomings or lack of readiness of the business to implement projects," the report says.

The ACC said further improvements in its performance and towards achieving the Government's prescribed Better Public Service results are dependent on significant changes to its technology, processes and capabilities.

"Given the complexity of change (tackling a range of areas including process, technology, and organisational capability), we have put in place robust governance arrangements for the program and completed consultation with the minister for ACC and other key government stakeholders on the business case," the ACC said.

It has also created a chief customer officer role to lift the customer perspective to the executive team.

The report says the ACC is a contributor to the achievement of the Better Public Service targets, but its work is at an early stage with some of the basic building blocks not yet in place.

"For example, use of common identifiers for claimants, businesses, and providers, and standards for interfacing with other agencies undertaking major systems developments are still being worked through," it says.

"Inland Revenue, ACC, and the Ministry of Social Development are all planning transformation programs, and the alignment and interfaces between the resulting information systems will be important for businesses transacting with government.

"Planning for this is at an early stage."

The ACC's data is a potentially rich resource to drive decision making and investment, and it has built the need for common identifiers such as the New Zealand Business Number and health identifiers into Shaping Our Future, the report says.

However, much of its information is organised by claim and it can be difficult to mine client, employer, or provider information.

"There is limited metadata associated with much of the information and some claims from providers are still received manually, creating data capture issues and limiting the information fields collected."

Customers also find the ACC difficult to deal with.

"Some of this difficulty is caused by systems that are ageing and were not built with a customer-centric approach, and some is caused by processes and interfaces that remain largely manual and which can be cumbersome," the report says.

The ACC is a high-volume processor of claims and levies, and is heavily dependent on its information technology. However, a review in late 2013 found deteriorating infrastructure.

"The reliability of systems was assessed as good. However, the under-investment and ageing technologies of ACC's older systems is adding complexity to system operations and increasing the risk profile.

"This can affect other systems, especially the Eos claims processing system, because of the interconnected nature of the systems."

Feedback from the front line was that system performance was a considerable frustration, resulting in regular downtime, the report says. A recent desktop upgrade improved the situation, but there are still problems with the core applications.