CHAPTER-6 CHALLENGES (BARRIERS) IN ADOPTING THE ELECTRONIC COMMERCE SYSTEM IN LIC OF INDIA 6.1 Introduction : e-insurance is the application of Internet and related technologies to the production and distribution of insurance services. Insurance is needed for successful trade and commerce; it improves the creditworthiness of trading partners and can reduce the risk of failure for start-ups Any system whether big or small, simple or complex, faces lots of challenges or obstacles or hurdles for implementation. If the system is new or directly the technique or technology implemented over it then the upcoming problems can be solved easily, but if it is implemented on existing system then it requires lots of consideration and attention. In LIC of India, the business process was initially manual and then it was converted into e-commerce system. The conversion of manual business process to e-commerce system requires lots of challenges because there is high possibility of losing the data. For LIC of India it is a big challenge to transform from existing system to new system which includes the designing of framework for the new system in coordination with existing system, implementation of the new system and maintenance of system. e-commerce system is a big opportunity to bring services to all customers, but must also consider some challenging issues.
The various issues of e-commerce system may be categorised as:- Technical Economical Social Business Legal Political Other 6.1.1 Technical Issues : Projects will not start "from the scratch", but will have to consider previous investments resulting in legacy systems. Some of them can be rewritten in new environments, while in some other cases this could be too expensive. Therefore interoperability with existing software and hardware platforms is a key success factor. It is unlikely that available resources can support a full replacement of existing applications. Designers must carefully consider portability and compatibility with future technologies. Finally, some legal aspects, like security and privacy, must be considered, as personal data are processed and stored, and financial transactions must be executed. To cope with such requirements, appropriate technical choices must be done. Interoperability: System must be interoperable; both as far as the newly developed are concerned, as well with the existing legacy applications. As a consequence it is mandatory to define "open standard" architectures, having well defined interfaces, to avoid heavy maintenance interventions on existing applications.
The beginning of computerization in LIC was commenced in the year 1999-2000. LIC has successfully handled the challenge of interoperability between the newly developed system and old system. But in future also LIC must consider this challenge. Privacy: A critical obstacle in implementing e-commerce is the customers concern on privacy of their life and confidentiality of the personal data they are providing as part of obtaining services or insurances. The guarantee by organization is not sufficient unless it is accompanied by technical solutions, transparency of procedures and possibly independent auditing. Privacy and confidentiality has to be highly valued in establishing and maintaining web sites. LIC has to keep the data of every customer which avail the insurance services. It doesn't means that for personal benefit LIC or employees of LIC provides data of particulars to any other person or organisation in any circumstances. The data should be kept fully confidential. Security: A basic task to fulfill is payment of insurance premium. Transaction security is an obvious requirement. Transaction security refers to the safe transaction where the payers should be ensured that their banking details are provided in hacking proof zone. In order to implement e-commerce system, electronic payment is one of the major and essential services which accomplish goals of e-commerce system. In order to take services online there are two major things required: from customer point of view electronic mode of payment and from LIC point of view to win and maintain the confidence of the customers. Customers wish to avail the facilities online but always afraid of providing its personal and banking
information over internet. LIC has facilitated the customers to pay their premium online through the secured payment gateways. Multimodal interaction: An e-commerce application is really effective if user can access it using different methods (i.e. through I-banking, debit cards, credit cards, etc.). Initially when LIC provided the facility of online payments they started with ECS only but then it was observed that the single modal interaction system was not sufficient to achieve the goal of e- Commerce system and then they provided the multimodal interaction for payment like credit cards, debit cards and i-banking. 6.1.2 Economical issues : Economical issues are mainly concerned with return on investments (ROI) and safeguard of the previous ones. The previous issue leads again to interoperability considerations and to some other considerations, like cost/benefit analysis and the effectiveness of the resulting application. Costs: Implementation, operational and evolutionary maintenance costs must be low enough to guarantee a good cost/benefit ratio. Any phase or stage of a system always starts with consideration of cost/benefit analysis. It is mandatory to maintain the economical aspect of the organisation throughout the life cycle of the system. By considering this fact LIC too started implementing e-commerce system in different phases so that the cost of the system may not exceed too much and becomes hurdle for future services.
Maintainability: Regulations and device characteristics can differ, and the system must be capable to maintain the emerging needs. Maintainability is a key success factor for long living systems in a rapidly changing technical e-regulatory environment. The new technology devices are always at high cost as compare to the current technology and it is a big challenge for LIC of India to maintain these devices as per regulations. The maintenance of the devices may increase the current cost but it can pay more for long life of the system. Reusability: e-commerce must be seen as a nationwide plan. Implemented applications, or at least some of their modules, must be reusable by other administrations. To reduce the cost of the new system, insurance companies should make provisions to reuse some of the modules that were successfully implemented with the previous system. Portability: Independence from hardware/software platforms is a primary requisite for portable applications, to help in possible reuse by other administrations. Once the e-commerce system is developed then it's different modules should be independent of any hardware and software requirements as well as it should be portable enough to be reuse by any other government agency.
6.1.3 Social issues : Social issues are mainly concerned with the usability by a large variety of people. This implies that the interface must be usable by disabled or old age people, understandable by low literacy or non native language people, etc. Accessibility: Any service should be accessible by anybody from anywhere at any point of time. The concept of e-commerce is claiming for increased efficiency and effectiveness of organization, but these goals will be achieved only if service will be available to one hundred percent of customers. Even if Internet population is exponentially growing, there is a significant portion of the people who may not be able to access e-commerce for various reasons. Some users may have physical or cognitive limitations, both permanent as well as temporary. Some others can have limited access to ICT technologies and devices. Therefore, universal access is still a fantasy. Similar services must be maintained outside the web, such as physical service facilities and automated telephone response systems. LIC may want to provide Internet access through public terminals as a part of their universal access efforts. As maximum customers don't have the internet connection to avail the facilities of e-commerce system, the e-commerce system would be a dream for them. So to overcome this aspect LIC of India has facilitated the customers to avail facilities through their satellite offices which are fully internet enabled and the effect of the transaction is given immediately to the accounts of the payer.
Usability: Generally the end users are often non expert users, or, at least, they may use applications in an irregular way, and need guidance to find the right way to perform their transactions. Organizational web sites must be usable, to be effective. The LIC of India should provide clear, precise and easy to understand environment for end users to interact with the system. LIC also have tried their best to provide clear, precise and easy to understand environment to their end users. LIC have provided different search options to find the details of particular related to their policies. LIC have provided very easy and GUI (Graphical User Interface) environment to interact with their system. Acceptance: Successful implementation of e-commerce requires a reconceptualization of commerce. As e-commerce becomes a reality, the public sector organizational structure will change accordingly both internally and externally. The focus of change will be on the system efficiency and the customers. Internally, the power conflicts over departmental boundaries and control of services will become more apparent as integration progresses. Externally, commerce processes will be organized for customer convenience instead of the convenience of the organization. In other words, the integration should not be driven by efficiency and effectiveness alone. A relevant issue will be to have all the customers well aware of the facilities offered by the e-commerce infrastructure, and have them to trust in it.
6.1.4 Business Related Issues : Business challenges include customer service where the organization will lose the personalized service that it offered to its customers. When this personal feel is lost, customer loyalty may be reduced or entirely lost). Customers old habits; customers may stick with the old habits and may not be ready to adopt change. They may even lack trust for the new technology and hence e-commerce system may be under utilized 6.1.5 Legal Issues : Legal issues may arise from the adoption of e-commerce. The organization may be sued because of a loss suffered from the failure of their system. Again, the organization may find itself facing new kinds of legislations which are continuously being enacted by the governing bodies. 6.1.6 Other Related Challenges: Internet connection failure:- In India, the internet connection is distributed by means of regular cable network instead of using fiber optic cable. This brings to the regular failure of Internet connectivity which tends to loss of data as well as interruption in the services. In today's scenario customer required quick services and hence LIC of India aware of the fact Online Marketing:- Marketing strategy must be strong in order to increase the business. There are certain online marketing methodologies. The use of method depends upon the region as well as the range of customers.
Security breach/fraud:- Online frauding is very common now a day. We can get certain SMS/E-mails by the name of reputed organizations whose aim is to make fraud with the customers and take out money from them. In order to stop such fraud activities, LIC of India publish security/warning notification time to time and inform customers. Threat from viruses:- Online activities always have a threat of virus. The virus attacks directly damaged the data as well as system. Lack of personal contact with customers:- The online system of services reduces the direct interaction with the customers. Also when any sort of services are providing online then it is tough to understand the requirement of customer. Also customer is not able to explain the necessity so widely and hence it tends to loss of customer base. For this LIC of India combine the system of online with regular system and online counseling facility is provided. Taxation/customs:- One of the major problems with any online service is the frequent changes of rules and regulations. The services must be dynamic so enough, so that any changes can be effectively appear online. This is also a big challenge for LIC of India and it is strongly handled by the organization. Linguistic barriers:- India is a secular country where unity is diversity strongly appears. The online services are either available in Hindi or English languages. This might be a big problem for the region where citizens does not know any of the available language.
6.1.7 Organizational Challenges : Organizational challenges tend to be overlooked as an organization focuses its attention on technology developments and issues. Overcoming these barriers begins with an effective Internet e-commerce strategy defined and supported by top management, deployed through simple yet effective communication methods. Creating a culture friendly to e-commerce requires ongoing effort and attention by the implementation team. A failure to attend to these under lying barriers can spell disaster for the effort; avoidance begins with their recognition. Customer difficulty in using finding your website: - It is clear that online services are search by means of web address not by any house no, location land mark etc. The online address should be easily, quickly searchable and it must be so user friendly so that customer can easily retrieve and access the data or information. Fig 6.1 :- Types of E-Commerce Barriers
6.1.8 Political Barriers : The government rules and regulation is one of the biggest hurdle in implementation and usage of e-commerce. The rules and regulations are subject to change and it is rotates according to the government. With the sudden change of rules and regulations or other government policies it affects any system whether it is manual or computerized.