LES PILIERS DE L AVENIR MANAGEMENT INFORMATION SYSTEMS CASE SAAQ

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1 LES PILIERS DE L AVENIR MANAGEMENT INFORMATION SYSTEMS CASE SAAQ Written by : Carmen Bernier et Lyne Bouchard Professors, Management Information Systems Department Faculty of Business Administration Université Laval 0

2 Société de l assurance automobile du Québec: Using IT to Fulfill a Prevention Mandate Case prepared by: Carmen Bernier and Lyne Bouchard Professors, Management Information Systems Department Faculty of Business Administration Université Laval 1. Context On Friday, December 13, Mr. Malenfant, Vice President of Information Technology (VPIT) at the Société de l assurance automobile du Québec (SAAQ), addressed the organization s management committee as follows: Our mandate is to improve Québec s road safety record, but we know that this improvement will eventually plateau. We need to innovate, to do things differently. To get there, we need a much better understanding of how the public behaves. We need to leverage our work on the strategic plan to find new ways to influence road users. Mr. Malenfant s statement is supported by the fact that unsafe behaviour is the main cause of road vehicle accidents. Analysis of the SAAQ s administrative records shows that in 2014: the number of deaths dropped by 14.1% over 2013, for a ratio of 4.1 deaths per 100,000 residents in 2014; the total number of victims was lower than in 2013 in 12 out of 17 administrative regions; the number of fatalities among accident victims, particularly among drivers, pedestrians and cyclists, was lower than in 2013; and the number of drivers involved in accidents causing bodily injury was reduced by 3.7% over 2013, while the number of vehicles involved in such accidents was reduced by 4.0%. These statistics appear even more positive when we consider that: the number of driver s licence holders increased by 0.8%; and the number of vehicles on the road increased by 0.8%. However, the SAAQ s management considers that even one death or accident is one too many, and knows that being seriously injured in a car accident has a huge impact on the lives of accident victims and their families, friends and co-workers. Road accidents also have a significant social cost that goes far beyond the financial cost to an insurer such as the SAAQ. And although Québec s road safety record has improved consistently from 2006 to 2014, this improvement is beginning to plateau. Knowing that the top three countries in the OECD boast a ratio of 3.2 deaths per 100,000 inhabitants, the SAAQ is convinced that there is room for improvement from here to The VPIT is very committed to helping improve the road safety record. For the past two years, Mr. Malenfant and his team have been working with the SAAQ s business divisions to modernize the organization s business practices and information systems. In future, the organization s practices will be much simpler and better integrated, both internally and in dealings with 1

3 partners. An enterprise resource planning (ERP) solution will soon be chosen to facilitate these improvements. One major advantage of using an ERP solution is that it can centralize highquality data in its databases and link all this data together. For decades, the SAAQ has been using its data to produce comprehensive statistics. It has also consistently analyzed this data to understand road user behaviour, which has enabled the development and implementation of numerous prevention efforts. Mr. Malenfant is proud of the work that SAAQ teams have already accomplished, but he believes that even more comprehensive and personalized data on drivers and vehicles is needed. In the past, prevention efforts were mainly focused on changing the behaviour of drivers in general, such as with media prevention campaigns and police checks for seat belt and designated driver use. In the VPIT s opinion, the use of new information technologies could stimulate the SAAQ s prevention efforts. Why not try to better understand individual drivers behaviour? By analyzing behaviour on the basis of region, age group and gender, could we not design more tailored and precise preventative actions? Is it possible to use smartphone apps to reward responsible drivers, much like Desjardins does with Ajusto? Could an individual s driver s licence, integrated with his or her cellphone, be used as a sort of driver/client loyalty or recognition card, much like the Société des alcools du Québec s new Inspire card? If so, how can we avoid the driver distraction that comes with cell phone use? 2. The Société de l'assurance automobile du Québec s Business Environment The SAAQ is a public insurer that provides coverage for bodily injury. Since 2004, it has been the trustee of the Fonds d'assurance automobile du Québec. It is responsible for the enforcement of the Automobile Insurance Act and the Highway Safety Code, and for the partial enforcement of eight (8) other laws pursuant to agreements provided for under the Code. Those laws are: 1 Statutes of Québec: o Environment Quality Act o An Act Respecting Owners, Operators and Drivers of Heavy Vehicles o An Act Respecting Transportation Services by Taxi o An Act Respecting the Québec Sales Tax o Fuel Tax Act o Transport Act Statutes of Canada: o Motor Vehicle Transport Act o Criminal Code The SAAQ s mission is to insure and protect individuals against the risks inherent in use of the road. As public insurer and the main body overseeing road safety management, the SAAQ controls access to and use of the road network. In this capacity, the SAAQ: takes on the various mandates involved in the administration of driver s licence and vehicle registration services, which allows it to control who can access the road network; and controls the transportation of passengers and goods, thereby overseeing certain aspects of road network use. 1 Further information on laws and regulations relating to the SAAQ is available at: 2

4 In addition to the responsibilities mentioned above, the SAAQ works to prevent accidents and bodily injury resulting from road use by making policy recommendations, enforcing standards and carrying out awareness, educational and consultation efforts with the general public and other stakeholders. Finally, the SAAQ helps reduce the consequences of bodily injury for accident victims by providing compensation and facilitating rehabilitation. Under its business model, the SAAQ s mission is set out as follows: to conduct road safety promotion and prevention campaigns; to set insurance contributions and manage the trust patrimony; to manage access to the road network (driver s licences and vehicle registration); to monitor and control the transportation of passengers and goods on the road network; and to compensate road accident victims and facilitate their rehabilitation. 2.1 Integrated business model The SAAQ s strategic plan led to the creation of an integrated business model, often referred to as the house. This business model is an essential tool for demonstrating that the SAAQ is involved in all aspects of road user protection, and that it also assigns a major role to both road users and its business partners. Figure 1 The SAAQ s integrated business model 3

5 The house is a series of eloquent symbols: Its roof symbolizes the SAAQ s mission: to protect individuals against the risks inherent in use of the road. The residents: The SAAQ cannot succeed in carrying out its mission alone. It relies on the contribution of all road users and its partners both public (Ministère des Transports, public health network, police forces, rehabilitation centres and others) and private (driving schools, road vehicle inspection agents and others). These contributors are therefore the house s residents. The rooms represent all the steps taken to protect road users (the SAAQ s areas of business): o prevention, through research, legislation, policies, programs and awareness-raising; o controlling access to the road network (administration of driver s licences and vehicle registration) and monitoring the transportation of passengers and goods (carrier enforcement); and o compensation and rehabilitation of road accident victims. The foundation supports the weight of the house, and includes service delivery support, organizational support and organizational governance. This integrated business model demonstrates the importance of consolidating the expertise of all relevant parties, which is all the more crucial as the organization s practices and information systems undergo their planned transformation. The house represents the cooperation that underlies the SAAQ s business architecture and is necessary for the SAAQ to function properly. 2.2 SAAQ clientele The SAAQ s clientele is mainly composed of Québec road network users subject to the Highway Safety Code and all other laws and regulations enforced by the SAAQ. Clients are businesses and individuals that maintain a business relationship with the SAAQ in order to obtain services, meet the necessary requirements for receiving or retaining privileges, or receive compensation under the Automobile Insurance Act. With regard to the SAAQ s integrated business model and service offer, the organization s clientele is served as follows: Services relating to the development and implementation of protective measures carried out by the SAAQ target all Québec residents, as road users carry the largest responsibility for their own safety and that of others. After all, human behaviour is still the primary cause of road accidents. In its role of monitoring and controlling access to the road network, the SAAQ serves the approximately 5 million or so citizens who have a driver s licence, the owners of the 6 million vehicles registered in Québec and the 57,000 owners and operators of heavy vehicles that use the Québec road network. The public automobile insurance plan allows the SAAQ to assist 88,000 road accident victims each year and process approximately 21,000 new claims annually. All Québec residents are covered for injuries sustained during an automobile accident anywhere in the world, regardless of whether or not they were at fault in the accident. Individuals who are not Québec residents are entitled to compensation for accidents that take place in Québec, but only if they were not at fault in the accident, unless otherwise agreed between the SAAQ and the victim s home jurisdiction. In addition to paying compensation, the SAAQ supports accident victim rehabilitation by facilitating social, professional and educational reintegration. 4

6 2.3 The SAAQ s business partners The SAAQ builds on the judicious use of business partnerships that provide the necessary complementary expertise to carry out various mandates and help improve the organization s customer service. Habitually subject to agreements and legal frameworks, the SAAQ s partners, agents and suppliers of products or services support and/or complement the organization s service offer. Other mandates entrusted to the SAAQ, by law or further to an agreement with the government, any of its departments and agencies, or any other body, are also governed by business partnerships between the SAAQ and the mandators. For example, the SAAQ collects fees paid for the right to drive on certain toll roads, manages taxi permits, etc. The SAAQ s data distribution and exchange partners are also business partners subject to agreements. The agreements that govern these services are subject to the same monitoring and control rules, including those under the Act respecting Access to Documents Held by Public Bodies and the Protection of Personal Information. The SAAQ has also joined forces with various partners in efforts to reinforce the complementarity and effectiveness of road safety initiatives in order to reduce the number of traffic accidents and improve the road safety record. Many of its data distribution and exchange agreements with partners are aimed at supporting these efforts. For example, the SAAQ makes driver and vehicle data accessible to police forces 24/ The organization The SAAQ had 3,527 employees on May 26, The diagram in Appendix 1 shows the SAAQ s organizational structure, as well as the distribution of employees and managers among its main administrative units. 2.5 The importance of customer service To carry out its mandates and serve its clientele, the SAAQ maintains a presence across the province of Québec. Its service offer is deployed at the following physical locations: its headquarters in Québec; an administrative centre in Montréal; a network of 145 service outlets: 43 service centres operated directly by the SAAQ; 102 service outlets operated by licensing and vehicle registration agents; a customer relations centre (call centre) at three locations: Québec (headquarters), Montréal (administrative centre) and Murdochville; an accident victim relations centre (call centre) in Québec (headquarters); 20 regional carrier enforcement offices; 34 weigh stations; 25 inspection areas; a network of over 800 automotive dealerships; and a network of 154 road vehicle inspection agents. The SAAQ also provides certain services to clients and partners through its telephone services (information and transaction IVR) and through its three (3) main Web portals: SAAQclic Citizens; SAAQclic Entreprises; and SAAQclic EED. 5

7 Pursuant to the Public Administration Act, the SAAQ has issued a Service Statement in which it makes the following commitments to its clientele: to provide courteous service and give each matter the attention it requires; to facilitate access to all services; to process claims in a fair and confidential manner; to communicate in plain language; to provide accurate and complete information; to provide reliable and secure online services; and to make up-to-date information available on its Web site. In its Service Statement, the SAAQ commits to delivering services to its various clients through its distribution channels on the basis of precise and quantifiable service objectives. For example, the SAAQ commits to: answering phone calls within three minutes or less from the moment a client chooses to speak to an information clerk; serving a client within 30 minutes or less at each of its service centres; and answering a client s or informing the client of how it will follow up on the within two business days. 2.6 Quantitative data The quantitative data on the next page are annual SAAQ statistics for

8 Clients and users Number of driver s licence holders: 5,283,950 Number of vehicles in use on the road network: 6,240,266 Number of accident victims: Number of heavy vehicle owners and operators: 36,151 56,840 Operational transactions: Number of new claims for compensation: 21,186 Number of insurance claims processed: 88,867 Total number of road network access transactions: 22,691,300 Number of driver s licence transactions: At service centres: 2,277,095 Through the customer relations centre (call centre): 55,582 By mail: 814,742 At licensing agents: 1,641,688 Through online services: 355,488 Payments received through financial institutions: 2,664,870 Number of vehicle registration transactions: At service centres: 1,494,827 Through the customer relations centre (call centre): 39,151 By mail: 1,598,570 At licensing agents: Through online services: Payments received through financial institutions: 2,768,675 1,018,690 3,048,225 Number of penalties imposed for road safety violations: 461,118 Number of calls processed at the customer relations centre: 2,024,297 Data distribution: Number of files (excerpts from SAAQ records) transferred: 25,149,443 Number of accident reports transferred: 252,734 Instances of data sharing with the Centre de renseignements 23,811,241 des policiers du Québec (CRPQ): Written communications: Number of pages printed at headquarters: 21 million Number of letters sent, including payment notices: 17 million Number of inspections performed by road vehicle inspection agents: 298,935 Financial data (as at December 31, 2014): Revenue: Cash receipts: Over $4 billion Number of deposit slips: 42,000 Expenses: Remittances: Over $3 billion Amount paid in compensation: Over $1 billion Administrative costs: $405 million Cheques and bank transfers: $1.7 million Number of outstanding transactions: Over 50,000 7

9 3. Road safety record: consistent improvement, consistent challenges As shown in the graph below, Québec s road safety record has consistently improved since 2005 in terms of the decline in both the number of deaths and the number of serious and minor injuries. This improvement is due in part to the SAAQ s awareness campaigns against impaired driving (cars and motorcycles), and is also the result of measures such as the increased use of police roadblocks, initiatives targeting high school and CÉGEP students, and the efforts of partners such as Operation Red Nose and many taxi companies during the holiday season. These statistics are even more impressive given that the number of licence holders and vehicles on the road has increased greatly since the 1970s, when fatalities peaked. 8

10 Statistical analysis has revealed that the road safety record varies greatly based on age and level of experience. Although they account for just 10% of driver s licence holders, young drivers (16 to 24 years of age) are overrepresented in road accidents, making up 21% of drivers involved in accidents resulting in bodily injury in The main causes of these accidents were inexperience and reckless driving. Other statistics are equally concerning: When alcohol is involved, young drivers present a much higher risk of being involved in a fatal accident than older drivers with a similar blood alcohol concentration, according to a study conducted by the Traffic Injury Research Foundation of Canada. The use of drugs is also an issue among young drivers, with cannabis use being especially prevalent among drivers aged 16 to 19. Drivers in this age group drive under the influence of cannabis more frequently than they drive under the influence of alcohol. Young drivers are also much more frequently involved in accidents where speed is a factor. In 2012, young drivers accounted for 32% of speeding offences involving speeds that exceeded the speed limit by over 45 km/h. They also accounted for 41% of all offences for speeding or reckless driving. Between 2009 and 2013, speed was a factor in 51% of fatalities among drivers aged 16 to 24. Driving will always involve risk. However, a survey conducted by the SAAQ indicates that driver s views on road safety issues have changed since the SAAQ s last strategic planning exercise. For example, as shown in the graph below, cell phone use has moved from eighth to third position among perceived road safety issues. In addition, electronic devices such as GPSes, cell phones, electronic watches (such as iwatches) and electronic windshield displays are a growing source of distraction that in many cases did not exist only five years ago. 9

11 Figure: Changes in perception of road safety issues in need of resolution in the short term, 2010 and 2014 Speeding Drinking and driving Cell phone use Poor road maintenance (potholes, etc.) Other Failure to obey the Highway Safety Code or signs and signals Lack of courtesy or aggressiveness (road rage) Drunk impaired driving Don t know/declined to answer Lack of experience/inexperienced drives Poor/careless drivers Road work zones and their signs and signals % of respondents The automobile insurance industry, of which the SAAQ is a member, has developed sophisticated models to determine the risk presented by a given driver or vehicle. As shown in the diagram below, risk is based upon driver behaviour, vehicle characteristics and what the vehicle is used for. Figure: Factors taken into consideration by the automobile insurance industry Demerit points Bonus-malus Telematics By-fleet rates Heavy vehicle driver conduct rating and other ratings Motorcycle type and cylinder capacity Passenger vehicles: CLEAR Safety features Other: type of vehicle (bus, taxi, truck, etc.) Annual kilometrage Distance to workplace Driving hours Region Type of goods transported 10

12 4. Conclusion: Your Assignment Now that the management committee meeting is over, the Vice President of Information Technology has returned to his team in search of new ideas. As the organization conducts its review of practices and prepares to implement the ERP, work will begin on designing a vision of business intelligence that is tailored to the realities of a public insurer. This vision will allow the SAAQ to benefit as quickly as possible from the ERP-enabled data integration. Mr. Malenfant believes that implementing a business intelligence solution will increase the SAAQ s analysis capability. Business intelligence is an IT-based approach to the analysis and presentation of data that can help executives, managers and other users make better decisions. Business intelligence uses a variety of tools, applications and methodologies to allow organizations to collect data from internal systems and external sources (social networks, open data, etc.), to develop and execute queries using this data and to create reports and dashboards for executives and operations personnel. But how can the VPIT convince his colleagues that a business intelligence solution has potential for further improving Québec s road safety record without being seen as a dreamer? Mr. Malenfant has given you the assignment of identifying the concrete actions and their benefits that implementing a business intelligence environment would do at the SAAQ. 11

13 Appendix 1 SAAQ Organizational Chart 12