| 3.1 Change
13. Simplicity Policy | |
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| 3.1.13. Simplicity Policy: | | Information Engineering Methodology enables the complexity of a solution to be modeled. The very best solution is very simple, but many solutions evolve to become too complex. | | "It is much harder to design a simple solution than to design a complex solution". |
| Complexity | | Business managers without information engineering experience tend to just accumulate a mass of diverse functions into a complex solution that its users cannot understand. Even a solution that begins simple can suffer endless changes that eventually create a solution that is beyond the skill of its users. | | Vendors run into the evaluation trap - the perception that more facilities are worth more than enough facilities. Senior managers who are obliged to focus on unusual and complex policies can drive a solution to become optimized to process complex polices that are not cost effective. |
| Evidence | | When a years worth of data has been entered, then data analysis will identify that 90% are simple cost effective policies, but 10% are complex exceptions that are not cost effective. | | Eventually it will become possible to identify that simple policies have a low processing cost, but complex policies have a high man-power costs using exceptional functions that users would rather not use. The clever business places great focus on the simple highly profitable policies and declines complex policies that cost too much to process. |
| Cost Effective | | Internet application services can be very cost effective when a target customer profile can be easilly identified and all processing is fully automated. Profits are reduced as complexity is increased, as manpower is needed to manually handle exceptions and when expensive specialist skills are employed. | | Complexity increases training costs and as users will only occasionally use exceptions facilities, then thse may not be used correctly with even more costs. Complex solutions with too many options and manual "refer" processing will never become cost effective and while revenue may increase, costs also increased. | | By definition, a solution that includes manual "refer" processing will never be as cost effective as a fully automated solution that declines customers that do not match the scheme. Experience has demonstrated that a simple solution that automatically accepts very low risk customers without exceptions. Sustainable long term profits are always identified by simple application services - simplicity create the "best" solution. |
| Experience | | The best way to design a successful insurance service is to make it simple or even very simple. The car insurance solution has a very simple proposers declaration of just 7 questions where every reply is just a yes or no. This is the "best" car insurance solution because its simple with training costs that are typically less than 10 minutes. |
| Decline Complexity | | When a customer with an unusual driving license or any other exception, they are declined insurance. This means that staff do not need to learn to read non-standard driving licenses, can avoid expensive specialist skills and can focus on the most cost-effective insurance. This solution has a fixed typical customer profile and any customer outside these limits is automatically declined - manpower time and costs are always minimized. Profit comes from total automation, simplicity and the avoidance of expensive complexity. |
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