Execution Wins in Core Systems Implementations
George Grieve | June 01, 2015
Execution trumps all else in the IT world. An imperfectly formed strategy, which is well executed, is better than a perfect strategy that never happens or gets badly implemented.
Similarly we are reaching the point in the core systems world where the choice of software solutions is less important than the ability of the implementation team to execute the legacy modernization project required to get the new system into production.
Obviously, the previous statement comes with some strong qualifiers. For example, a workers’ compensation carrier would be ill advised to choose a vendor that has never done “comp,” but if the comp carrier has a short list of, say, three well qualified vendors with modern software and strong domain experience then the key differentiator should be execution. The best solution is of no value if it does not get implemented. ROI requires go-live.
As we have discussed many times, core systems legacy modernization is the hardest thing an insurance IT department can undertake. These projects are complex, enterprise-wide, of extended duration, and heavily risk-prone. Therefore, the size, makeup, and experience of the implementation team is critical to the project’s success. Also, by their nature, core system replacement projects are not frequent occurrences. It is common to find the legacy system that is being replaced is 20, 30 or more years old.
This raises what we at CastleBay Consulting call the Carnegie Hall Problem. As the time worn joke goes: A man stops someone on the streets of Manhattan and asks “How do you get to Carnegie Hall? The stranger answers, “Practice.” If you want to play at a world class music venue you have to practice and train to be a world class musician. Similarly, if you want to be capable of executing a major legacy replacement project you need to have practice and training at doing legacy replacement projects.
The problem is that the in-house IT group has spent the last 20 years doing maintenance projects. Playing Chop Sticks does not prepare you for a piano concerto. And just as you cannot suddenly figure out how to successfully play Beethoven’s Moonlight Sonata, you also cannot learn to run a legacy replacement project on the fly. Such an undertaking has too many moving parts, is too broad, too risky, and too visible to learn on the job.
So, what is the answer? Build a team that incorporates three skill-sets that are critical to project success. The three skill-sets are:
- Detailed knowledge of the insurance carrier’s business operations, system requirements, and success criteria.
- Detailed knowledge of the new system solution, what it does, what it does not do, and how to modify and extend its behavior and integrate it to create a successful solution for the carrier.
- Detailed knowledge of how to plan and execute all the key components of a core system legacy replacement project, preferably accounting for the vendor specifics.
And where do we find these skill sets?
Detailed knowledge of the insurance carrier’s business operations, system requirements, and success criteria is the core of the insurance carrier’s knowledge and competence. A combined group of business subject-matter experts, business analysts, analysts who support current systems, and technical architects who know how the current application suite operates are the critical contribution from the carrier for the success of the project.
No one else knows what the carrier does today and wants to do tomorrow. Further, as the customer, the carrier owns the responsibility to define what they want from a third-party system (define the requirements) and to verify that they get what they asked for (acceptance test the system).
Detailed knowledge of the new system solution, what it does, what it does not do, and how to modify and extend its behavior and integrate it to create a successful solution for the carrier is usually the domain of the vendor. As the developer of the software, the vendor is ultimately the expert on what the system does and how to modify and extend its functionality. Vendors vary in their approach to the services component of software delivery.
Some vendors offer a limited and strictly defined set of “expert” capabilities that focus on executing the most complex configuration and integration tasks while also providing mentoring for carrier or third-party staff who will do the majority of the work. Other vendors offer much broader implementation services including project management, quality assurance, conversion, and testing functions. Vendors that have a limited approach to implementation services often have a partner program, which allows third-party services vendors, often referred to as system integrators (SIs), to build product expertise and bid for client project work.
Detailed knowledge of how to plan and execute all the key components of a core system legacy replacement project, preferably accounting for the vendor specifics, is usually the domain of the aforementioned SI companies. Depending on the size the carrier (and its pocketbook) it may hire a SI to manage the entire project including the carrier staff as well as the software vendor and its own resources.
System Integrators are companies dedicated to the delivery of a broad range of IT services from program management through business analysis, configuration and programming, integration, testing, deployment and maintenance. Until recently, these service vendors worked mostly in large insurance carriers on large projects, but recently they have become commonplace participants in legacy replacement projects for lower-tier carriers, providing specialist skills in vendor software as well as structured offerings for specific project components such as QA or conversion. In smaller carriers, services vendors may be hired to perform specific aspects of the project e.g. conversion or QA, while the carrier provides its own project management or contracts for that service from a separate third party.
There are, of course, an infinite number of variations as to how the team gets built. Also, the makeup of the team can and should change over the different phases of the project. The earlier phases of the project tend, out of necessity, to focus on technology and integration at the expense of business functionality, whereas later phases are largely business function driven.
If 20 integrations are required to write one policy for the first line of business in one state that is what is going to get done first. Once the 20 integrations are in place a relatively small amount of additional integration work will be required for the remaining states and lines of business to be supported. Variations and phase changes aside, what is most important is to focus on one deceptively simple question: Does the project have the combination of knowledge, skills, and resources to successfully deliver the objectives of the current (or about to start) phase?
Of course, successful execution requires more than just human resources. A major part of the value of hiring an SI is the methodologies, tools, and accelerators they bring from prior projects, which benefit your project by saving time, reducing effort and ensuring quality. Methodologies are usually assets that support the planning, execution and tracking of the various project streams. Tools can be anything from automated test generators to bug trackers or other capabilities. Accelerators are reusable code assets that provide head-starts for such functions as configuration changes or ETL functions for integration.
The main value for any carrier in hiring third-party expertise is not only do they bring seasoned resources and other assets to facilitate the project, but they significantly reduce project risk. While budgets and timelines are important, most executive management groups understand and appreciate that complex projects can and do run over. This doesn’t bother them if they feel the project is firmly on track and will ultimately deliver a high-quality result, which can be leveraged for years to come.
The definition of success for a core system replacement project is best measured two or three years after it is completed and should focus on the business transformation and attendant benefits that have been achieved. Whether the system was a few weeks late or some percentage over budget becomes less important with the passage of time.
Project execution should focus first on getting a system into production and second on providing enough functionality and quality that the system can be built on for years to come. The only way to do this is to ensure the right mix of knowledge and skills, combined with the right tools and other assets are available to support project execution.
- It's National IT Professionals Day
- Save the Date for ITA-LIVE 2019
- OneShield Software and UrbanStat Work Together to Improve Real-Time Analytics and Risk Decision-Making
- ITA LIVE 2019 - SAVE THE DATE!
- Insurance Technology Association Announces New Editor-in-Chief
- August 2018 Edition ITA Pro Magazine is Now Available
- Enterprise Architecture in an Agile World
- Top 10 Tips for Securing Your Mobile Devices and Sensitive Client Data
- Industry Insight: 4 Global Insurance Trends in Digital, Data, Content Services and Security
- Diving Deeper into Prioritizing Your Strategic Digital investments
- Why Content Rules
- How Mass Personalization Will Open the Small Business Benefits Market
- At Year End 2017, Will Your Organization Be Protected from Cyber Risks?
- Do Insurance Bots Dream of Mitigating Risk?
- Conditioned to Respond
- Managing & Mobilizing Insurance Data in a Connected World
- Race to the Finish Line
- New Tools, New Opportunities in Claims
- ITA LIVE: Reaching Insurance Industry Crossroads
- Advice to Insurance IT Leaders: Keep Your Eye on the Ball
- New Date, Venue for ITA LIVE 2017
- Guidewire Makes Major Push to Small and Midtier Market by Acquiring ISCS
- Insurance Disruption is Happening Right Now
- Insurity Adds Strategic Investment Partner, General Atlantic
- Beyond Transformation: The Convergence of Finance, Risk, and Actuarial Functions
- The Rapid Evolution of Consumer Protection Regulation
- Talent Hunt: Finding, Attracting, Retaining Top People
- Insurers Flexing Their Distribution Models
- Technology Driving Disruption in Insurance
- Fear of ‘Next Bubble’ Challenges Life, Annuity Carriers
- Technology Allows Commercial Lines Insurers to Stand Out
- Single Sign-on Viewed as Biggest Tech Challenge for Agencies
- ISCS Observes 20th Anniversary; Scurto Predicts Major Changes Ahead
- Policyholders and Their First Impressions
- Progressive Making Progress on the UBI Front
- High and Dry: Insurers Search for Disaster Recovery Plans
- Insurers Sign The (Un)Dotted Line
- Reflections of a Retired Insurance CIO
- Mobile Device Management Just One Answer to BYOD Issue
- Lessons from GEICO and Progressive on Winning the Critical Buying Stage
- You Are a Target for a Cyber Attack
- Web-based Systems are the Next Evolution in Claims Technology
- Gaining a “Wow” Experience from Web Users
- Time to Shift from Business/IT Alignment to Business/IT Alliance
- Healthcare Insurers Changing to Consumer Model
- Organization is the Key for Selecting Software Vendors
- Analysts Expound on the Needs of the Mid-tier Insurance Market
- Finding the Cure for Obamacare’s Website
- New Software Solutions Benefit Insurers on the Inside and Outside
- Products, Market Impede Investment in Systems for Life Insurers
- Combatting Cyber Threats: Predict, Prevent, Persist
- The Future of Telematics Heads Beyond Insurance
- The Shame in Cyber Security Lapses
- Building Policy Administration Systems for the Future
- Insurers Look Into The Eyes of Their Policyholders
- It’s a New Dawn for the ITA
INSURANCE IT NEWS
- Nationwide launches easy, online insurance platform for business owners with fewer than five employees
- InsureTech Connect 2018 Pre-Conference Workshop to Focus on Customer Acquisition
- HazardHub named as EIA 2018 Entrepreneur of the Year.
- Insurers Leveraging Digital and Analytics-Driven Claims Capabilities to Improve Customer Perception and Results, Says Novarica
- Slice ICS Customer Announces Go-Live of First Digital Insurance Product
- Personal Lines Carriers Focus on Digitalization of Processes, Products, and Consumers, Says Novarica
- Messagepoint Integrates SparkPost with its Leading Customer Communications Management (CCM) Platform
- Insurers Seeing InsureTech as Opportunity More than Threat, Says Novarica
The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
ITA is pleased to present the 2014 Webinar Series. We have many topics for you to choose from and attendance is open to all ITA members. The webinar topics are current and exciting — ranging from predictive analytics to telematics and will focus on the direction insurance carriers need to follow for the future. All webinars are presented by insurance IT professionals along with some of the leading analysts and consultants in the field. There is no cost to attend an ITA webinar. For more information and to register for the webinar, click the “title” of the webinar below.
BLOGS AND COLUMNS
The Insurance Technology Association is pleased to announce that ITA Live 2019 is scheduled for May 5-7, 2019 at the Marriott Harbor Beach Resort and... READ MORE
It has become a common refrain over the past few years to view the practice of enterprise architecture (EA) as something that time has passed by, much... READ MORE
You have surely heard it said that small businesses are the growth engine for America. Today, the phrase has a special ring to it for benefits... READ MORE
With stagnant growth and lingering low interest rates, the life insurance industry faces a challenging future... READ MORE
Finding insurance carriers willing to write commercial lines risks has always been a challenge for producers... READ MORE
As Guidewire Software prepares for the start of Connections, its 11th annual user conference that begins on Nov. 2, Brian Desmond, chief marketing... READ MORE
Fraud detection has always been and will continue to be a critical component of claims management. Learning the lessons from current claims Straight... READ MORE
- Vendor Views