Finding Success in Core Systems

The finish line — and the course — must be uniquely mapped out for each program, rather than taking a “one size fits all” approach.

Successfully implementing a core system — in any industry, but especially in insurance — is challenging. One of the most difficult aspects of implementation is simply knowing where the finish line is — while you’re standing at the starting line. Mapping out the course from the starting line to the finish line is impossible if you don’t know where both are. The difficulty of this task is compounded by fact that the finish line is different for each carrier. For one carrier, it might be a minimum viable product (MVP) that in turn serves as the new starting point for a broader implementation. For others, it might be a particular component, after which everything else is just icing on the cake. For others still, it may be the full solution including conversion. As such, the finish line — and the course —  should be uniquely mapped out for each program, rather than a “one size fits all” approach. Are You Ready for This? Your step into core systems transformation will benefit from a bit of scrutiny to help determine the proper location of your finish line. Where do you start? How do you figure out where your finish line is and what it looks like? A good starting point is to look at the many factors that can answer these questions for you:
  • Organizational risk appetite: How much risk is your organization willing to take on at once?
  • Program budget: What is the board willing to approve for the program? Will it invest the full amount or just the initial chunk?
  • Organizational ability to handle large programs: Do you trust your organization to manage a long, large budget program, or is the organization better at managing a series of (or parallel set of) smaller efforts?
  • Buy-in of various divisions: Do all of the potential stakeholders across different distribution channels, product lines, etc. agree to having their core systems replaced, or do some prefer a “fast follower” approach?
  • Desire to process new business only/convert on renewal/avoid conversion: Is there a commitment to move off of legacy completely, or to only move portions where it makes financial sense to do so?
  • Need/Lack of need to replace particular components: Can part of the solution wait? That is, do you need to do policy, billing and claims today, or can/should one or more of these wait?
See also: How to Transform Core Systems   Among other possible constraints (such as selecting a vendor that only supports commercial lines or group life) or parameters (such as a board mandate to be live end-to-end in 12 months for three lines of business), these factors can help establish where the finish line should be. While business parameters change, the finish line should not be moved — if at all possible. It would be better to instead add new phases with new finish lines. Moving the finish line once you’ve started can create a host of unintended problems, ranging from morale issues to creating a never-ending cycle of chasing moving targets. It’s best to keep that first finish line fixed. Once complete, the organization will have more confidence to build on its success. Keeping It Real In reality (and perhaps we can keep this a secret just between you and me), there is no finish line. Once you’ve achieved the first goal, there will still be much to do. Business needs tend to change from quarter to quarter and from fiscal year to fiscal year. Accordingly, changes to the system(s) will be needed, including: extending functionality beyond what was additionally planned, adding products, extending to new geographies, adding new partner integrations, upgrades and more. Rapidly changing business dynamics and needs constantly move the idea of being “finished” further and further out.  Of course, this means you may never truly be “done.” Welcome to transformation in the digital age! So, with this in mind, how far away should your first finish line really be? Beyond what’s been answered for you by organizational parameters and constraints, several factors should be considered. First, the finish line should be clearly visible to all stakeholders and team members from the beginning. Second, getting to the first finish line should be clearly achievable, real and not a “moon shot.” This is no secret. You can write this phrase in a cloud bubble on your white board: “Success begins with an ACHIEVABLE FINISH LINE.” (And maybe then you should write, “Do not erase” with one of those red arrows pointing to your cloud bubble.) Show Me the ROI Another key factor should be setting a “first” finish line that delivers measurable results. If you get to the first finish line and all that’s been delivered is a foundation, it can be easy for sponsors or others to question the ROI. Try to bundle foundational work with something functional, and try to make it something that can be deployed on its own (this could range from a single product and one module — such as term life or personal auto quoting — to implementing the end-to-end suite but with minimal configuration). However you define your minimum viable product, your first finish line should get you there. Take Me to Your Finish Line (Then Prove to Me That I’m There) So how do you know when you get to your finish line? If you defined it clearly, it may be obvious. But to make sure everyone knows how close they are to the finish line, a few important steps can help. One key is to clearly communicate what defines the finish line and what defines successfully getting there. Are there metrics for being on-time/on-budget? What about quality? Is there a benchmark for adoption? Another key is to make sure that these success criteria are clearly communicated to all stakeholders and team members. In addition, consider some sort of scorecard, scoreboard, dashboard or other very visual cue that indicates progress day by day. See also: ‘Core in the Cloud’ Reaches Tipping Point   Following these guidelines, you can help ensure that all participants are marching in the same direction, at the same speed and with the same goals. When using an agile approach, this can be especially important given the dependencies of all the moving parts. Just as important is the ability to get to the finish line and have the stakeholders and sponsors know you’ve arrived there so that success can not only be achieved but also recognized. With a clear path to completion, clear goals and a clear way to know that success will be recognized, teams can be motivated like never before!

Chad Hersh

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Chad Hersh

Chad Hersh is executive vice president and leads the life and annuity business at Majesco. He is a frequent speaker at industry conferences, including events by IASA, ACORD, PCI, LOMA and LIMRA, as well as the CIO Insurance Summit.


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