We once heard it said that most companies replace systems before they’ve used 80 percent of those systems’ capabilities or capacities. We were skeptical at first. But the more we thought about it, and the more we looked at systems, the more true it became. Here’s why:

Most companies decide to replace systems because of recurring functional frustrations: “Our system doesn’t do this.” “If only our system could do that.” And our favorite: “We need a new system to [fill in whatever you want that new system to do here].” In response to any of those statements, the logical questions are: Did you want your system to do this, that, or the other thing (whatever that thing is) when you bought it? Did you tell anybody?

Look Ahead

When Sylvester Stallone was shooting Rambo III in Thailand, cast and crew members were dropping like flies from the heat and dehydration. Stallone said, “By the time you realized you were thirsty, it was too late.” So it is with systems: By the time you realize you need something, it’s likely too late. That’s why foresight is so important in defining and articulating system requirements. Adding a little more nitromethane to the fuel mixture propelling a top-fuel dragster is much easier to do in the staging area than it is on the straightaway at 300-plus miles an hour.

To define and articulate requirements effectively, you have to:

• Ensure transparency. If you try to define requirements in secret, away from the prying eyes of users, you’re building the system for yourself. Don’t be that limited or limiting.
• Specify functional needs. The less you describe specifically what you need the system to do, the more you’re likely to fall for technical smoke and mirrors.
• Avoid popularity contests. If you ask peripheral stakeholders — rather than users — what they want, they’ll tell you. If you don’t deliver those things, they’ll talk badly of you. If you do deliver those things, you’ll blow the timeline and the budget, the system won’t perform the way users needed it to, and they’ll talk badly of you.
• Avoid pilots or prototypes. Either the vendor’s done it before or not. As the saying goes, almost only counts in horseshoes and hand grenades. If the vendor hasn’t done it before, you probably can’t afford to be a guinea pig.
• Agree to a list of prioritized deliverables. Those deliverables should be a clear reflection of your requirements.

Act Like the Future is Now

We know it’s not possible to anticipate everything. But the more you anticipate, the more accurately you can define and articulate your requirements. And the more accurately you define and articulate your requirements, the more you’ll get out of your system and the longer it’ll continue to meet your functional expectations.

Rambo wouldn’t be able to beat the bad guys and dragsters wouldn’t win any races if they ran at 20 percent.

Whenever someone refers to the proverbial Three Ps, they’re typically referring to the prevailing wisdom about the way in which businesses should value their assets. In that context, they’re referring to:

1. People
2. Process
3. Product.

In that context, we agree with those Three Ps. But some others are worthy of consideration. We offer them here for your deliberation.

Are You Ready?

As the saying goes, life is what happens to us while we’re making other plans. True. But that doesn’t negate the necessity of planning. Another notion suggests that plans are made to be changed. That’s true, too. But that doesn’t nullify the importance of planning, either.

It’s been several years now since we got out of the prediction business. Nevertheless, we’re pretty comfortable suggesting that, in the absence of sure things, these Three Ps will help keep you out of all but the most unavoidable jams:

1. Planning. No plan will get you from A to Z without fail. But a plan that leaves room for life (reality) and contingencies (the unexpected) will be malleable enough to succeed more times than not.
2. Preparation. As a subset of planning, mapping out your steps and forecasting potential contingencies will position you optimally to respond to whatever transpires.
3. Progress. If you go about planning and preparation conscientiously and thoroughly, you’ll give yourself the best shot at making progress.

Henry Ford once said, “Thinking is the hardest work there is, which is probably the reason why so few engage in it.” While he may have been a bit condescending, he may have been right. And if he was right about thinking, planning, preparation, and progress come in right behind it.

The Other IQ

Similar to the Three Ps, when most people talk about IQ, they’re referring to the Intelligence Quotient. And just like our own Three Ps, we think there’s another IQ: the Ingenuity Queue.

Samuel Goldwyn is reputed to have said, “The harder I work, the luckier I get.” He knew the fallacy of overnight successes and get-rich-quick schemes. He also knew the value of planning and the need to be imaginative and responsive to change and changing conditions.

And so it is with system replacements and IT projects. No one ever wants to do them. Everyone has to plan for them.

If you mind your Ps and Queues, you’ll be ready when the time comes.

For all the talk about insurtech, we still live in a world of aging systems, outdated architectures, all required to keep pace with the countless processes required to run an insurance business. Why is that?

Much of what’s being touted as insurtech comes from people new to the insurance industry. People who do work in insurance don’t have time to contemplate the future. They have their hands full with the present, having to manage time and cost, profit and loss, expenses and adjustments, investments and returns, retentions and ratios. Those who work in insurance have to worry about keeping their jobs by selling policies and service. Those who don’t have to sell policies and service have to worry about keeping their jobs by trying to sell insurtech to those who do. Why is that?

Déjà vu All Over Again¹

Much of what we hear about insurtech has been said before—many times. Some examples:

• Insurers are too conservative to notice the changing world around them.
• They can’t comprehend how technology will change the way insurance will be offered, bought, and sold.
• IT spending is up (or down).
• The bulk of the money will be spent on policy systems (or claims systems).
• The number of vendors in the market will expand (or contract).
• Insurers will replace systems with best-of-breed solutions, point solutions, or end-to-end solutions.2
• The sky is falling.

And those prognostications are ways delivered with dread and foreboding: Do something — anything — or you’re doomed. Why is that?

I See, said the Blind Man³

The insurance industry doesn’t have to save itself from anything. It’s doing quite nicely, thank you. It’s just trying to understand its technology options and make a living. And all it gets is stale Chicken Little rhetoric. Why is that?

In part, it’s because insurers, vendors, advisors, analysts, and the trade media have different agendas. They seem to exist in different worlds. The effect is the rough equivalent of an astronomer with cataracts gazing through his telescope on a cloudy night: There may be some discernible light, but the picture is dim and confusing. So, the industry chugs along, keeping company with the notion that its competitive salvation is IT innovationor, as it were, insurtech. Why is that?

Let’s Try Reality

IT spending in the insurance industry may stagnate, but it isn’t going down. And the insurtech proponents may make the most noise but, thanks to large insurers, the industry still spends the bulk of its IT budget on internal development, a luxury mid-sized and small insurers can’t afford.

Faced with such facts, the best thing to do is face them. Insurtech can’t be ignored, it has to be assessed pragmatically. Policyholders can’t be ignored. They still require products and service. And change can’t be ignored. Since it’s inevitable, we just have to find our own ways to live with it.

In the light of day, the most obvious truths may be the hardest to see. Why is that?

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1. https://www.today.com/news/its-deja-vu-all-over-again-27-yogi-berras-most-t45781

2. Solutions will always be in search of problems.

3. … as he picked up his axe and saw.

We’re nearing the end of 2018. If you’re a regular reader of this blog, you might be tempted to think legacy replacements are behind us by now. But you’d be wrong, in part because technology is the least of the challenges we face. A bigger one is change management. And change management is all about people.

Here’s the short list of things that need to be managed with people in change:

• It’s one of the more frustrating parts of human psychology that we prefer devils we know to those we don’t. That’s why our Suite is developed with input from our users.
• If people prefer to do things thisway, they’ll resist doing them thatway. That’s why our Suite is easily configurable.
• Legacy systems are likely to be connected to myriad systems, data sources, and people. That’s why we do our homework before the contracts are signed.
• Expiration Dates. Nothing lasts forever. But if you didn’t plan to replace your legacy system, the change is that much harder. That’s why we earned our development and delivery stripes before we founded Finys.
• The Secret Code. Okay. It’s not really secret. But building, adding, and automating business rules can seem daunting. That’s why we created an English-like common language to preclude the need for translating terminology and data and to eliminate inefficient layers of communication.
• Investing in a new system doesn’t negate the value of legacy IP. That’s why we enable our customers to fully leverage our IP, even as we migrate their legacy IP and data.
• Idle Hands. Downtime, non-productive people, and lost revenue are significant challenges. That’s why we work with our customers in our virtual Design Lab to create workflows, establish functional objectives, and teach them how to configure the Suite, products, and LOBs.
• Fear of change can be paralyzing. That’s why we dedicate teams to our customers before, during, and after implementation to support the roles of their people and to make sure they know everything they want to know when they want to know it.

Go With the Flow

In a 1789 letter, Benjamin Franklin wrote, “In this world nothing can be said to be certain, except death and taxes.” In the 21^st-century world, we can safely add change to Dr. Franklin’s list. It’s as unavoidable as it is inevitable. Its pace will only quicken and its magnitude increase.

Since we have to keep the change, we may as well manage it effectively.

Fact of life: Data and the processing and transactional functionality that makes use of that data has to reside in a secure environment. Given the number of data breaches that have occurred this year alone, that’s self-evident. So, when the organizations with which you work are reported to be compliant with SOC and other data-security requirements, that compliance is not to be taken lightly. Here’s why:

Who’s Watching?

Compliance indicates the processes and practices within the organization have required levels of oversight. Monitoring is in place for unusual activity, configuration changes are authorized, and access is granted only to approved users. Normal activity is baselined to make deviations readily apparent and to determine the presence of potential threats.

Compliance also indicates adequate alerts and audit procedures are in place to:

1. Ensure awareness aberrant activity and to initiate a corrective response.
2. Identify the root causes of aberrant activity to ensure appropriate remediation.
3. Trace aberrant activity forensically to determine its source, its path in the system, the parts of the system affected, the nature of the affect, where it might go or what it might affect next.

But Who’s Accounting?

Compliance with SOC and other data-security requirements also means personnel within compliant organizations are accountable to their customers and to each other for upholding the terms of compliance. From preventing breaches to identifying potential weaknesses, from shoring up potential weaknesses to remediation if it’s required, the appropriate people in audited organizations are on notice and on the hook. They should also be responsible for conducting regular assessments on patch management, vulnerability management, and overall system-security management — and reporting the results of those assessments to all of their data- and system-security peers in the organization.

If you’re not sure if the organizations with which you work are compliant with data-security requirements, here are a few things you should do:

• Ask if the organization has any data-security policies or procedures in place.
• If so, ask what they are.
• If not, worry … a lot … and find a new home for your data.

Some things are worth worrying about more than others. The security of your data is one of them.