Case Management and the Integration of Labor

Several years ago at IBM Credit Corporation, arriving at a quote for computer financing involved five business functions and, on average, took seven days — even though customers and sales representatives were anxiously awaiting the outcome. Now, coming up with a quote takes six hours, largely because one person handles the entire deal from start to finish. The company issues more than ten times as many quotes as it did in 1985, using a computer for more than half of the quotes. And IBM is beginning to issue quotes in real time on the customer site, by combining yet another role with that of doing the deal — selling the computer. IBM account executives have become representatives of IBM Credit.

At Pacific Bell, providing a business customer with Centrex telephone service once took eleven jobs and more than five business days. Service representatives had to update at least nine computer systems with the correct information, making frequent errors and rework, and consulting customers several times. Now, with a redesigned process for provisioning, Centrex service coordinators handle all interfaces with customers. Using a computer workstation that interfaces with all nine systems, they provide the customer’s service in no more than 2.3 days; if the order is for a type of service predefined in network software (as in 80 percent of orders), it is usually done the day of the order. The customer has only to interact with Pacific Bell once and almost always gets service when requested. Order rework is down substantially.

The Internal Revenue Service’s collections division once had a very complex process for collecting taxes from delinquent taxpayers, which involved six different functions and much time spent on locating taxpayer files. The backlog of uncollected revenues grew. When the agency built a new computer system for tracking cases, the collections and backlog improved dramatically, with major reductions in number of employees and offices, but worker morale declined and turnover increased. Only when collections teams handled entire cases to completion did collections improve in both productivity and job satisfaction (see Figure 1).

These organizations are taking actions that counter a century of conventional wisdom about how jobs and organizations should be structured. Throughout the industrial age, the emphasis has been on seeking efficiencies through the detailed functional specialization of jobs or the so-called functional division of labor. Now, however, many firms are beginning to move toward combination, not division, of labor. They are using individuals or small teams to perform a series of tasks, such as the fulfillment of a customer order from beginning to end, often with the help of information systems that reach through the organization.

Some of the firms that have implemented this radical new work design call it a “case management approach,” referring perhaps to social work case managers who help their clients interface with multiple social agencies and bureaucracies. Others have called it a “micro-enterprise unit” or a “pod.” One of the first organizations to affix the case management label to a redesigned process was Mutual Benefit Life, an innovative (albeit financially troubled) insurance company in Newark, New Jersey. It transformed its process for underwriting and issuing an insurance policy from an operational nightmare — it required forty steps, twelve functions, eighty jobs, and an average of twenty-two days — into a case management process involving one person, assisted by two others. Case managers handle each policy from application to issue in two to six days, while cutting costs by more than 40 percent.2 Though the firm’s real estate portfolio has led it into great difficulty, the case management process was functioning well before new business began to decline, and many other insurance firms have since adopted the same process.

When companies decide to redesign their business processes at the customer interface, they are very likely to create this type of role, which involves mediating between the customer and a complex organizational and information structure. Figure 2 depicts a simple model of case management in a manufacturing order management process.

We have observed new case management structures in more than fifteen firms in a variety of manufacturing and service industries, including these:

• Order management in manufacturing (Xerox, Lithonia Lighting, Dell Computer, Georgia Pacific).
• New-service provisioning and carrier access selection in telecommunications firms (MCI, Bell Atlantic).
• Patient management in health care (Lee Memorial Hospital, New England Medical Center).
• Underwriting and issuing new insurance policies (Capital Holding, Milico, UNUM, and several others).
• Customer relationship management in banking (Society Bank and others).
• Driver services in fleet management (PHH Fleet America).

Some of these firms have now had several years of experience with case management; others have created case management roles but are still implementing supporting systems and structures.

While case management presents exciting possibilities for process design and execution, it is not usually adopted without problems and issues. As we discuss later, there are difficult tradeoffs to be made in organizational and process design. Furthermore, neither of the two approaches to providing information to case managers — implementing a broad, integrated new system or providing networked links to old ones — is entirely satisfactory. Finally, there are limits to how much job functionality can be incorporated into a case management environment. Before exploring these difficulties, however, it is important to explain the concept and the promise of this work design.

What Is Case Management?

Case managers are surprisingly alike across these different companies and industries. We have observed four components of a successful case manager’s role:

• Completes or manages a “closed loop” work process to deliver an entire product or service to the customer.
• Is located where the customer and various other functions or matrix dimensions intersect.
• Has an expanded role to make decisions and address customer issues.
• Easily accesses information from around the organization and uses information technology in decision making.

Case management is an appropriate design for work that is performed along process lines rather than in business functions. Unlike functions, processes are designed around completely producing a significant product or service. Case management is particularly useful in processes that deal with customers, which involve managing the entire cycle of activities from customer order to product or service delivery, billing, and payment.3 The process approach to work, which specifies a structured set of activities resulting in a specified output for a specified customer, originated in the quality movement. Many U.S. firms are rapidly adopting it, in both an incremental improvement mode — consistent with quality precepts — or more radical process innovation approaches.4 Process thinking implies a structure based on achieving outcomes rather than on functional skills or reporting relationships. Case management is, for most organizations, a radical departure from current work organization and is usually adopted with objectives of order-of-magnitude gains in time, cost, or quality.

Like other radical process designs, case management implies broad processes that cut across the existing functions of the firm. Any process approach is a shift from the functional structures familiar to most firms; case management is particularly distinctive because it achieves cross-functional integration by combining several functions into one job. Case managers are typically located at the intersection of several organizational interfaces. Not only are they liaisons between these different functions and customers, but they actually perform the work previously done by the functions. Moving to case management, therefore, inevitably involves considerable change in both organizational structure and business processes. The difficulty of such change, however, reflects the difficulty a customer has with today’s highly functionalized, segmented organization. As one Dow Chemical executive put it, “The fact that we are a multifunctional, multidivisional, multi-SBU organization is not our customer’s fault.”

The case manager role is almost always designed to provide better customer service at lower cost. It is seen as a way to provide the customer with faster and more complete service than before, with minimal handoffs and the ability to give customers the status of work in process. At Mutual Benefit Life, for example, the case managers were not only a way to process more efficiently and hence speed up the time to complete a policy, but also a way to provide the customer with a broader array of more responsive services. This requires job expansion and making case managers responsible for dealing directly with customer issues, instead of having to get approval from senior managers or managers with relevant expertise. When well designed, case management makes the back room and the front room indistinguishable. It is a vehicle for literally presenting “one face to the customer” — long a slogan at many firms, but rarely achieved when the product or service is spread among many different departments and workers. Potentially gone are the delays and errors introduced through handoffs between the front room and back room, or handoffs within rooms.

Several of these components of case management could have been — and in some cases were — implemented in the past.5 Though it would have been counter to most prevailing organizational structures, a firm could have created a closed-loop process and could have given greater decision rights to front-line personnel. What was missing was the ability to bring the organization’s cross-functional information and expertise to the front line. Without recently developed, powerful, and flexible workstations and supporting software tools, there would have been no way to pull together all the information necessary to make case management work — unless, of course, the firm had been oriented to broad processes in building its mainframe system architectures, which is very unlikely. Information technology is not necessarily the most important component of case management, but it was the most limiting in the past.

In firms where any one of these components is left out, the case manager role may not be effective. We know of several banks, for example, that have constructed integrated customer files, allowing tellers or other front-line employees to access customer information across bank products and departments. But because they do not allow users of the customer data to represent all of the bank’s products, little cross-selling or relationship management can occur.

Many other firms have implemented roles at the intersection of sales and operations to coordinate order management, but without role expansion, supporting information technology, and decision-making authority, these liaison roles are just Band-Aids on an inefficient business process. One high-tech manufacturer we studied created a case managerlike role to handle the order fulfillment process for key accounts. Yet because managers insisted that the role be nonexempt (and thus low in status), the case managers never had access to key information from the functional groups that the role was intended to coordinate. In case management, less than all might as well be nothing.

Case Management and Work Organization

Though case management is beginning to seem routine in many firms, it is a major departure from the way we have organized work since the Industrial Revolution. For the organizational thinkers of the nineteenth century, a key aspect of modern organizational life was the “division of labor.” Adam Smith described the division of labor in the manufacture of pins:

One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head: to make the head requires two or three distinct operations: to put it on is a peculiar business, to whiten the pins is another; it is even a trade by itself to put them into the paper; and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which, in some manufactories, are all performed by distinct hands, though in others the same man will sometimes perform two or three of them.6

In manufacturing, experimentation with more complete jobs began many years ago, though few firms have had more positive results than with the assembly line. For routine, structured tasks, whether they involve manufacturing or service processes, it is difficult to beat highly specialized jobs and sequential organization for efficiency. There is also evidence that the workers (at least in the United States) who hold these jobs are often reasonably satisfied with them. As one worker in the automobile industry put it, “If I’ve got to bust my ass to be meaningful, forget it; I’d rather be monotonous.”7

Based on conventional wisdom, many service industries as well as service functions also adopted the assembly line model, though it rarely worked as well as it did in manufacturing. Jobs were narrowly defined, and the problems they addressed required only low levels of expertise, leading to monotony and difficulty in assessing a worker’s contribution. Furthermore, assembly line structures did not deal well with tasks that required coordinating many different functions or roles. Each highly segmented role created the need for a buffer (in-box and out-box) and a communications interface, which greatly increased the time to complete the service. In an age of speed and time-based competition, these delays have become even more problematic. In many insurance firms, for example, we have found ten-to-one ratios between elapsed time and value-added time in a cross-functional work process.

Perhaps the biggest problem with the traditional division of labor was its lack of customer responsiveness. Customers had a way of interfering with the best-laid plans for how work should flow. They called when their applications or policies or orders were in midstream, forcing a halt in the flow to find their file. Their requested products didn’t fit existing categories. They wanted their orders expedited, which slowed down all the others. For all these reasons, firms tried to isolate the front-line people from the back-office producers. Thompson counseled that the periphery of an organization, i.e., those involved with customers, should be “buffered” from the core, i.e., those involved in producing the product.8

But this core-periphery separation has built-in limitations. If organizations want to be responsive to customers, they can hardly consider interacting with customers an interruption in their work. If every customer interaction is “a moment of truth,” as Jan Carlzon, CEO of Scandinavian Airlines, put it, then we must encourage each employee who interacts with customers to act for the entire firm. In short, the assembly line model is not well suited to work problems involving interfunctional coordination and high customer service levels (see Table 1).

The assembly line model, of course, is not the only alternative to case management as a form of work organization. For decades, firms have also employed cross-functional teams for certain types of tasks. As Table 1 shows, cross-functional team structures have several strengths. They allow for a high degree of functional coordination, can address problems requiring high levels of expertise, and can also provide customer services throughout a process.

However, cross-functional teams are usually temporary — formed for a specific purpose or project and disbanded when the project is finished. The name of such teams correctly implies that the functional structure of the organization is not permanently modified. When cross-functional teams permanently coexist with functions, such as in consulting firms or investment banks, they require highly skilled and paid professionals who can handle the ambiguity of a matrixed organization. Therefore, such permanent teams are not well suited to highly structured tasks.

A third alternative to case management is the structure based on relatively independent functional experts, such as scientists in a research-oriented organization, or physicians in a hospital. For the tasks described in Table 1, the functional expert structure excels only at high-expertise tasks and (sometimes) those involving customer service and interruption. Functional experts are not efficient at permanent task execution, particularly of highly structured tasks. Cross-functional coordination is the most difficult problem in such work environments. The cardiologist is excellent at diagnosing and curing heart failure but is usually not adept at ensuring that a patient’s orthopedic and psychological problems are addressed. Functional specialists are also often better at practicing their specialty than at providing service to customers, as many physicians’ patients will attest.

Viewed in the context of Table 1, the benefit of case management is its flexibility to handle multiple tasks. The combination of high efficiency at relatively structured tasks, coordination across multiple roles, use of IS to coordinate the expertise of an entire organization, responsiveness to customers, and the ability to execute all these tasks permanently is difficult to resist in many different types of businesses.

Not only customers but also employees benefit from case management — at least those employees who can fit into these demanding jobs. Case managers can see a task through to completion and gain self-esteem from their employer’s trust in their ability to make the right decisions and actions. They learn a broad range of processes through the lens of a case management workstation and face a wide variety of issues and challenges. Their jobs are not easy but are always interesting.

Where Does Case Management Work?

In general, organizations with complex processes for bringing their products and services to market are the best candidates for case management. In manufacturing industries, case management is best suited to order management processes requiring frequent and close interaction with customers — i.e., when there are many products to choose from, when products are configured to a customer’s specification, when scheduling of a customer’s order is difficult, or when services are combined with products. Of course, this sort of environment in manufacturing — sometimes called the “service factory” — is becoming increasingly common.9 Firms must be careful, however, not to include too many tasks in the role.

At Dell Computer, for example, a recently designed case manager position both takes and executes customer orders and also provides technical support for Dell products. However, the reengineering team determined that updating the technical support knowledge base and doing market segmentation were activities that, although related to customer support, took place in a different time frame and might distract front-line workers from their customer duties.

In service industries, the most feasible environments for case management are those in which the service cannot be performed simply and straightforwardly in assembly line fashion. This is either because customers frequently interrupt the service operation to check its status or because multiple types of services are offered to one customer, perhaps even simultaneously (e.g., as in a health care institution). These service industry environments might be called “service job shops.”

Case managers can also help overcome organizational complexity, as well as complexity in products and services. If one customer must interact with multiple functions or divisions, a case manager can manage the interactions. In an ideal world, organizational handoffs in business processes where there is interaction with customers would be transparent to the customer; in the real world, however, that does not often happen. One consumer goods firm we studied, for example, had five divisions, each with its own order-processing systems, selling to the same retail customers. Some of its more sophisticated retail chain customers demanded a single interface to the entire firm, so the company created a case manager role to eliminate divisional handoffs.

There is a tradeoff, however, in designing relatively complex case management roles. The broader the set of functional tasks involved and the organizations linked, the more difficult it is to find good case managers. One issue is that to service customers directly and to complete or oversee the work for those customers is a difficult combination of activities, in terms of both skills and logistics. Few case managers in insurance, for example, are both expert at underwriting and good at convincing customers to buy policies. The issue of location may also limit the breadth of case management. For example, at Pacific Bell, the Centrex provisioning process also involves some tasks that require a person to be at a switching center to connect cable pairs. Case managers sitting at a workstation could not handle this job, so the company retained the role of “facility provisioner.”

In general, while case management is an innovative and attractive design for customer-interacting work processes, it raises many issues of implementation and fit with the existing organization. Next we describe some of the ways in which firms have addressed these issues.

Creating and Operating Case Management Processes

In creating case management environments, the firms we studied faced several issues. Managers must deal with such implementation issues as the proximity of the case manager to the customer, the decision rights granted to case managers, the supporting information architecture, the level of monitoring, and the choice between individuals and teams as case managers. Case management also has several implications that continue after the role and its activities have been initially established, such as for human resource requirements and policies. It is too early in the life of case management to have definitive answers for all these issues. But it is not too early to focus on some of the major problems that must be resolved and point out what can be learned from the experiences of some pioneers in case management.

Proximity to the Customer

Even though case management is a way to increase customer responsiveness, only some case managers deal face to face with customers. Many case management roles thus far established deal with a field salesperson, a selling agent, a broker, or some other intermediary who deals directly with the customer. Thus case managers are frequently one step removed from the customer, though they sometimes have direct contact when they provide customer service.

This distance from the customer, though recognized as being less than optimal, is often viewed as necessary. Firms may be reluctant to give sales agents access to the full information that comes with case management —particularly when they are not employees but independent agents. Firms also fear that the salesperson’s incentives may not be closely aligned with their own. For example, when we told a mortgage company’s chief financial officer that the trends in his industry would eventually lead to a case manager who would issue mortgages in real time at the customer site, he responded that his company couldn’t tolerate the risk of combining the sales, appraisal, and loan approval roles.

Some firms, however, have been bolder in this regard. For example, Lithonia Lighting, the largest manufacturer of lighting fixtures in the United States, has designed a system called Light*Link that places all its relevant information in the hands of independent sales agents. These agents are empowered to act on Lithonia’s behalf with all of Lithonia’s customers and are at the center of all information flows. Lithonia agents can access a great deal of information about the internal operations of Lithonia such as production scheduling, pricing policies, and so on. Lithonia has also provided them with a number of expert systems so that they can respond to customer requests for quick lighting designs — for an office building or for a baseball park. Perhaps one reason Lithonia is so willing to supply this valuable information to its agents is that the high-value segment of the industry is relatively stable, with little history of agents switching suppliers. Of course, as Lithonia attempts to expand into more standardized lighting products where agents are not traditionally so monogamous, it faces questions about reliance on Light*Link.

Similarly, although it created a case management role at headquarters that greatly improved the quote generation process, IBM Credit felt that, to generate quotes sufficiently rapidly, it must move quote generation to the IBM field salesforce. Until IBM develops new compensation schemes based on the long-term profit of a deal, these account executives would seem to have every incentive to “give away the store” to get a customer’s business. However, preliminary results from combining these roles indicate that the salespeople often make deals that are more favorable to IBM Credit than those headquarters was able to arrange. A few salespeople have even experimented with giving the workstations to customers and letting them create their own deals. IBM Credit was bold simply because it had to be — it couldn’t make the process work quickly enough when it was centralized at headquarters. Furthermore, it had a long history of working with the field salesforce to glean information about customers.

IBM Credit’s experience illustrates the full spectrum of proximity to the customer — from isolation to case management by the customer. A few other firms we encountered planned eventually to move case management to the customer. At Bell Atlantic, for example, the case management process involved working with customers to help them select or change long distance carriers. Bell Atlantic managers hope eventually to use IT-based tools to let the customer choose a carrier without human intermediation. This sort of customer-performed process is practical where the customer choice is not terribly complex, and where the customer’s interests do not conflict with the company’s. It would probably not work well, for example, in underwriting insurance or issuing home mortgages, where the customer’s interests may not coincide with those of the insurance or loan provider.

Certainly, moving case management very close to the customer involves risk. Case managers who both execute and sell may decide, for example, to take their business elsewhere or to satisfy customers at the firm’s expense. Though few firms have been as bold as Lithonia and IBM Credit, several insurance companies (particularly those with captive agents) and manufacturing firms are hoping that once they can demonstrate case management’s success as an intermediary between the firm and its salesforce, they will be able to move the role and its capabilities gradually into the field. In some organizations, such as direct suppliers like Dell Computer, the salesforce is not in the field, and customer orders are taken primarily at headquarters. In such cases, moving case management close to the customer is the only alternative.

Case Managers’ Decision Rights

Another consideration in designing case management roles is the level of decision-making rights in serving customers. Case management generally implies a high level of autonomy, but just how much freedom in making decisions is appropriate? We believe the answer is, “As much as possible without causing problems elsewhere.” An example of case management at Xerox illustrates the tradeoffs in establishing decision rights.

Xerox has begun to implement case manager roles in its order management process. The result of the redesign is a consolidation of multiple functions into two roles, customer contact employees (CCEs) and customer support employees (CSEs), which together form a case management team (or micro-enterprise unit, as Xerox calls it). Using substantial information technology, these two roles will oversee the entire process of managing an order, from giving the customer a proposal to collecting revenues.

The new roles, particularly the CCEs’, have substantial decision-making authority. Xerox created a broad set of decision rights for the roles and then pared away detailed policies and procedures to match the stated rights. A number of management levels are eliminated, which increases decision-making power. In fact, there is only one level of managers above the CCEs, and they mentor and advise the CCEs, rather than provide close supervision. Customer satisfaction is a primary factor in the CCEs’ performance evaluations, which also support customer-oriented decision making.

At Xerox, the only restrictions on decision making are dictated by logic and efficiency, not hierarchy. Case managers have a great deal of pricing flexibility, but they cannot offer prices below the government price, which must be the lowest possible price by definition. The profit on the sale determines their compensation, on which there is no upper limit. There are also some limitations on their ability to preallocate inventory to customers below established reserve levels, but only because other customers would suffer as a result.

Case managers cannot do their work if they are not empowered to meet customer needs in creative and sometimes unorthodox ways. As long as employee evaluation and compensation schemes are modified to reflect the profitability of the entire process and there are no ethical violations, case managers should be given a long leash.10

Information Architecture for Case Management

Developing an information architecture to deliver all relevant information to the case manager’s desk is, for many firms, a herculean task. Since most systems in the past have been built along functional lines — a sales system, a logistics system, a manufacturing system — creating a customer-focused architecture typically involves building or buying new systems from the ground up. Several banks and insurance firms are taking this approach, using centralized customer databases as the organizing principle for their computer applications. However, this approach is very expensive. Companies can expect to spend tens and even hundreds of millions of dollars to create such an architecture, and it often fails. Several attempts at creating customer-focused architectures for the banking industry, such as those by Hogan Systems and Westpac Bank, have been abandoned after many years of effort.

Because of the expense of this approach, many firms have considered interim approaches. They are creating “frontware” or “composite” systems that pull data from various functional databases (or, more commonly, smaller extracts from those databases), transmit it across existing corporate networks, and integrate it at the case manager’s workstation. Case managers can then “see” into the entire firm without a total change of systems.

Pacific Bell, for example, has established an organizational unit to create just this type of system. In the Centrex example described above, the Strategic Integrated Systems group developed a front-end system that guided provisioning caseworkers through the steps necessary to handle an order correctly, using such databases as equipment inventory, customer requirements, and installation schedules. Because the underlying databases and network applications are quite complex, the front-end system determines what questions to ask the customer and in what order. The system and the case management approach are now operating in several regions of Pacific Bell’s service area and have substantially reduced both provisioning time and errors.

Yet these frontware workstations are no panacea for information systems architectures that are functionally based. First of all, aging functional systems may not provide the right kinds of information and may be expensive to modify and maintain. Building frontware systems may relieve pressure to replace them — but the pressure may be a useful source of motivation.

Secondly, building a frontware environment for each type of case manager in an organization could lead to a jumbled and patched-together information architecture. Because of concerns about the robustness of the front-ware approach, many of the IT managers we have interviewed question this interim approach, even in firms where it is supporting case management today. They fear that multiple investments in temporary case management systems will eventually lead to an unmanageable jumble — a “gridlock” of ad hoc systems, database extracts, and locally managed computers. On the other hand, the integrated customer-based architecture may never be achieved. We believe that most firms should work on both short-term frontware systems and long-term architectures until there is more evidence that the composite approach is viable over the long term.

Monitoring Case Managers

Because the handling of customers and information about the customer interface are typically concentrated in the case manager’s role, issues of monitoring job tasks in case management environments are common. We have seen examples of extremely high and low levels of monitoring that disturbed the corporate culture.

At the Internal Revenue Service, the activities and performance of the collections agents, or case managers, were closely monitored and controlled through the computer system supporting the collections process. The computer system made it possible for supervisors to monitor directly the case managers’ behavior instead of relying on after-the-fact measures of their performance. The system measured the duration of calls, time at and away from work, dollars recovered per unit of time, and many other factors. As a result, supervisors were able to spot performance problems accurately and early. This high level of control was implemented because case manager performance was critical to collections performance. Also, the agency had expended considerable resources on the new computer system and wanted to justify the expenditure with productivity increases.

The new process, computer system, and associated controls were very successful in economic terms. While the efficiency of the process and the dollars collected from it increased markedly, so did the agent turnover rate and the dissatisfaction of supervisors. Many employees felt that they were overcontrolled, and even supervisors complained about spending too much time on monitoring and control. The agency eventually backed off on the level of monitoring and moved to greater levels of team self-management. Case management teams now do the monitoring. Supervisors can spend more time teaching agents about tax matters and advising teams on how to achieve better performance, rather than on individual monitoring.

At the other extreme of control (albeit for a different reason), a network engineering group in a telecommunications services firm wanted to relax the information controls on its case managers. The group built a workstation for providing new-customer circuits that greatly reduced the cycle time for this process but also bypassed the previous mainframe databases that documented and managed the network. At least to some, these systems were necessary for ensuring network integrity. Needless to say, the new workstation-based system led to a major political battle that raged for more than a year until the advocate of the workstation-based approach was promoted, which assured its adoption. In the meantime, the company incorporated some of the original controls into the workstation.

For most firms, the correct approach to case management monitoring is in the middle of the spectrum, but with a bias toward less monitoring and more accountability and responsibility. The case manager should not operate without any oversight, but excessive monitoring defeats a primary goal of the initiative. Since case management always involves information technology, and IT is extremely useful for monitoring work, most employers need to resist using all the employee performance information available.

Job Satisfaction and Teams

One somewhat paradoxical aspect of case management is its potential for low job satisfaction. At first blush, this seems to be a job that would fulfill even the most challenge-oriented employee. It involves high levels of autonomy and decision-making authority, completion of a broad set of tasks, and interfaces with many parts of the organization. These are, according to theorists of work motivation, key aspects of rewarding and enriching jobs.

One facet of case management, however, can radically reduce its work-life quality. The job is mediated through a computer workstation or a telephone, so some case managers feel “chained” to the computer or phone. They feel that they are not doing their jobs if they are not peering at the screen, typing at the keyboard, or talking on the telephone. Even when the job involves analyzing real customer problems or talking to real customers on the telephone, tangible social interaction is lost. Even the tangibility of paper and files is missed; as one case manager put it, “Instead of putting a completed file into the out-box, I feel like I am sending it into a black hole.”

The most common way to address this problem is to create case management teams, rather than relying on isolated individuals. Different team members may specialize in different aspects of the case (back to the division of labor), or they all may be generalists. The primary reason for teaming generalists is to create social interaction. When case management requires the combination of highly specialized functional skills, teams of specialists can maintain their functional identities and be members of a case management team. At Lee Memorial Hospital in Fort Myers, Florida, for example, case management teams specialize by the types of patient problems they are equipped to treat. A particular “care center” may focus on cardiology or cancer, but the patient will receive care from only ten members of a team, rather than from the normal range of sixty to one hundred care givers.

In many environments, teams can also manage themselves, eliminating or reducing supervisory layers. Of course, teams are not the solution to all problems; they may reduce efficiency or lead to conflict or negative social interaction.11 The case management teams we have observed, however, are working well. Those firms that view teams as only an interim step in case management, such as in Bell Atlantic’s carrier access organization, may find that they lose more in job satisfaction than they gain in efficiency when they abandon teams for individual case managers.

However, one insurance firm we have studied is attempting to create team-based case management without significantly changing structure, location, or skills. The firm is designing the process and establishing prototypes. Workers from various functions, who will maintain their functional identities, will comprise case teams. Several functional specialists, such as underwriters, will not be full-fledged members of the teams, but will be assigned to visit a specific team daily. Some of the team members will be in the field, some in the home office. The team will have to access multiple systems in order to complete a case.

This environment strains the definition of case management; it is really just a permanent cross-functional team. The firm is attempting to get the benefits of the concept without making any real changes. Though the process for issuing insurance policies may be streamlined, we doubt that the order-of-magnitude benefits the firm desires can be achieved. We also question whether a group of individuals without common jobs or location really constitutes a team.

Human Resource Issues

There are many human resource issues in case management. The skills, compensation, performance evaluation criteria, and career paths of case managers are normally quite different from those of other employees. Skills and compensation often require radical upgrades. Yet because case managers manage cases rather than people, they wreak havoc with traditional human resource policies in these areas.

At Mutual Benefit Life, human resource issues were the most difficult aspects of the shift to case management. Those employees who were capable of becoming case managers faced great uncertainty about how the firm would measure their performance, how much they would be compensated, and where their careers would lead. The personnel department didn’t understand how difficult the case manager role was and how much compensation it should receive. Because the case managers had no subordinates and worked at a computer, the department wanted to classify the job as clerical. The team that designed the case manager role had to work long and hard to convince personnel that case managers should be paid not only more than secretaries, but also more than underwriters. High-achieving case managers also had initial difficulties with the idea that, as they progressed, they would not change job titles but would simply deal with more challenging cases.

Mutual Benefit Life had made a major commitment to hiring and training local, disadvantaged employees. Employees who could not master case management jobs felt betrayed. Few of these employees, however well-trained, could perform the difficult and broad set of case management tasks. Since the breadth of the job demanded not only trained skills but also high intelligence and a customer-oriented personality, only so much of the gap could be addressed through training. Some of the employees picketed the firm’s headquarters to show their frustration.

Many of these problems seemed insurmountable until one executive became the manager of the personnel function and of the information systems function, which had been very active in establishing the case manager role. Thereafter, the firm implemented new programs to address both short- and long-term issues arising from case management. Xerox and PHH Fleet America have adopted this same organizational combination of systems, process, and human resource responsibilities; it seems that when technology and processes change, so do jobs, and it is very helpful to have all of these resources managed under one roof.

What Happens to Functions?

Though some organizational theorists have suggested that the functional structure will disappear in the process-oriented organization, we do not expect that even extensive case management will eliminate functions entirely.12 In the firms we studied, case management replaced some functions, resulted in shrinkage to a small group of functional experts in others, and left some fully intact. Functions were replaced completely when the expertise levels needed to perform the functional tasks were very low. When expertise can be taught to case managers or put into information systems, the result is usually an organizational structure that reduces functions in size and power but does not eliminate them. Small groups of functional experts can still perform several valuable functions, including training and certifying case managers in their skills, helping to design ever-better expert systems to support case managers, and occasionally rotating into the case management role themselves.

PHH Fleet America currently uses this case management structure of smaller but still critical functions, and case managers now perform most services for its customers’ fleet management requirements. Functional areas have shrunk in size as they have given up operational duties to case management-oriented processes, and case managers report directly to process owners, e.g., the Driver Services process owner. The few employees who remain in the functional areas continue to perform important roles, however, in creating and maintaining functional expertise among case managers and dealing with the customers’ most difficult questions. For example, if a customer calls in with a maintenance problem on a fleet car, two times in three the Driver Services case managers can solve it using an expert system and the skills they have learned. They refer the more difficult cases to expert maintenance mechanics, who can not only solve the problem but also add it to the case managers’ knowledge base if it is a recurring issue.

In environments involving very high levels of expertise, there is an equal mixture of case management and functional experts. This appears to be the situation in hospitals that have implemented case management approaches (or “care teams” as they are sometimes called). Although hospital case management teams can assume most patient care duties (including administering tests and medication, monitoring response to treatments, and overseeing preparation for and recovery from operations) and also coordinate a patient’s movement from primary to acute to ancillary care, specialists are still needed for operations. When case managers can’t do everything, there is a clear need to specify where their responsibilities begin and end, and under what circumstances experts should be called in.

Managing Resistance to Change

In general, case management leads to strains in the organization. Because it is a role based on a process view of the organization, some aspects of case management will frequently conflict with functional or divisional structures and with existing policies and procedures. Functional managers will complain that the time-honored procedures and expertise of their functions are ignored. Risk-averse executives will worry about including so much in one job. IT managers will be concerned that case management technology is not rationally or reliably designed. All affected employees will question how they fit into a case management structure. Companies embarking on the case management role should be aware that many such conflicts will arise and be prepared to manage them.

The keys to managing resistance to case management are well-known change management principles. Communication with all concerned parties about the business objectives for adopting case management, the vision for how the process will work, and the likely impacts on these stakeholders is critical to securing cooperation. Letting functional managers and employees in particular know about their long-term fates is the way to retain valued employees during ambiguous periods. Furthermore, the sooner that employees know what skills are necessary to succeed as case managers, the earlier they can begin to prepare themselves with education and training.

A final approach to securing employee commitment to case management-oriented processes is one that we call “partial work design.”13 Although the results from this approach are not fully in, several firms, such as Citibank and American Airlines, that are experimenting with it, find that it has strong conceptual appeal. In this approach, a reengineering team designs from the top down the high-level description of a work process, including its inputs and outputs, performance objectives, organizational structures, and key technological enablers. The case managers or teams who will perform them daily design the detailed work flows and activities of the process. Their design participation builds adherence to the process and the job and reduces the alienation resulting from a Taylorist separation of work design from execution.

Where Is Case Management Going?

The instances of case management we have observed thus far have been for single, specific processes at the customer-organization interface. Because these initial efforts have yielded substantial benefits, companies have begun to explore whether they can extend case management concepts to a broad range of processes, including those such as financial transactions that are entirely within the organization. It is too early to know the implications of these explorations, but they suggest new directions in organization.

Even if case management is restricted to customer-interfacing processes, its value can be further extended into the organization. For example, because the case manager oversees an entire customer transaction, he or she can provide useful feedback to product or service development. An insurance case manager, for example, could suggest new insurance products based on customer requirements and report on customers’ comments.

If we extrapolate case management trends to the extreme, organizations of the future could become collections of different types of case managers, each handling a closed-loop process for an internal or external customer. The ad hoc networks bringing information to case managers’ desktops (or laptops) would be the firm’s primary information architecture. The organizational structure would be the case management nodes themselves — as individuals or, more likely, teams — and the communications and other relationships between them. Before its financial problems, a Mutual Benefit Life manager responsible for designing case management spoke of “the one-person insurance company,” which he saw as a logical extension of case management.

Another alternative direction for case management is to move it out to the customer. As already noted, IBM Credit is already exploring turning its customers into case managers, and this is a stated direction for Bell Atlantic’s carrier access case managers. Of course, such a direction relies heavily on information technology to do most of the case work. Furthermore, the issues of decision rights, breadth of the case management role, and monitoring all become greatly amplified — and potentially dangerous to customer relationships — when the customer is the case manager.

Whether case management remains internal or external, it clearly presages more autonomous and “networked” work units. And unlike most examples of the networked organization, it currently exists in many firms. However, it is not possible at this point to understand if this networked autonomy is a positive long-term direction, or what issues will emerge if it catches on and burgeons. The firms that pioneered case management have yet to adapt fully their organizational structures to suit the new role. The functional structure is still in place, and most managers we interviewed believe it will always remain because of the need to maintain functional skills. In insurance, for example, even when a case manager who has many other roles performs underwriting, the need for underwriting standards, training, and assessment does not go away.

A firm implementing case management today should start modestly, combining several functions and jobs and observing the outcome. If combining labor rather than dividing it works well on this small, though radical, scale, the firm should add other functions to existing case manager roles and apply the concept to other areas within the organization.

The case manager role is a potential bellwether of a new organizational form. We know that it requires innovative thinking about business processes and their relationship to customers, about the role of information in a process, and the power of individual employees. Case management may not be relevant to all businesses and all processes, but it is being widely adopted across multiple industries, and firms are achieving substantial business benefits from it. It has the potential to become the future of all business organizations, and it has already become the present for some.