Crm
CRM Implementation Failure at Cigna Corporation
In December 2002, the management of Cigna Corporation (Cigna), one of the largest health insurers in the US, announced that problems in their customer database systems had resulted in misquoting their number of customers by an extra 900,000.
The beginning of 2002 saw Cigna face problems on many fronts including customer service and profitability. The company's membership fell due to poor customer service and by the end of 2002, the membership was 12.5 million, down from 13.3 million at the end of 2001. For the fiscal year 2002, Cigna reported revenues of US$ 19.34 billion and a net loss of US$ 398 million (Refer Exhibit I for Cigna's consolidated statements of income between 1999 and 2004).
According to analysts, one of the main reasons for Cigna's poor customer service and the resultant reduction in membership was the failure of the restructuring of its information technology (IT) and CRM systems, at its HealthCare division.
This US$ 1 billion project was aimed at moving 3.5 million customers of Cigna from the twenty year old computer systems to new AS400 systems that supported claims processing platforms PowerMHS software and ProClaim software. The project was monitored by the Chief Information Officer (CIO), Andrea Anania (Anania). Despite Anania's confidence in it, the changeover did not go smoothly, encountering several glitches. As a result, customer service went haywire resulting in millions of dissatisfied customers. The company lost six percent of its healthcare members in 2002 alone.
Patrick Welch, President, Cigna Healthcare, on the implementation of the CRM
Systems in 2003.
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