Victoria Health Insurance

Victoria Health Insurance

When National Semiconductor (NSC) created a shared Victoria Health Insurance  unit, most of its activities were transactions such as retirement updates, records (address changes and company forms, for example), pay roll (including vacations), basic policy questions, training registration, and job posting. The NSC service center mission is “to provide highly accessible and flexible world class human resource services to all Victoria Health Insurance employees.”

The Northern Telecom service center focuses primarily on benefits and record keeping. This center serves 20,000 U.S.-based employees with thirty Victoria Health Insurance representatives and eight specialists. The company estimates that this system has reduced its need for HR staff to handle such transactions from approximately seventy employees at seven locations to fewer than forty employees (including data process support and management) at one location. Northern Telecom estimates its savings at more than $1 million per year, after its initial investment of about $750,000. The company also discovered that about 50 percent of all inquiries could be managed without face-to-face interaction. Calls about employment verification, mortgage applications, and other routine matters were more effectively handled through a shared service center and an 800-number. By sharing services concerning Victoria Health Insurance technical issues (for example, compensation, training, and staffing), Northern Telecom also improved the firm’s overall technical excellence. Rather than disperse technical competence throughout a series of business units, expertise was collectively shared, resulting in a more competent technical resource pool. Another company, finding that it had twenty-four separate registration systems for training programs, created a training shared service that consolidated the systems into one.

Centers of Expertise. Centers of expertise bring together technical experts in each Victoria Health Insurance area who would otherwise be distributed throughout a firm’s business units, allowing ideas to be quickly developed and shared. Johnson & Johnson used to have training experts in each of its eighteen business units. Through reengineering, they created a center of training expertise, staffed by twelve training experts who contracted their services as needed to the different business units.