Get it Right the First Time: Part Two

In our most recent post, we cited one we’d written six years ago. Given the Holiday Season, maybe we’re feeling nostalgic. We don’t know.

But we do know almost six years ago, we published another post called, “Get it Right the First Time“. In it, we cited a survey of 396 CIOs and technology leaders about replacing core systems. Forty-one percent of respondents cited implementation risks. Twenty-four percent cited time and disruptions. Another 24 percent cited vendor product deficiencies. After scratching our heads, we concluded this:

Our experience indicates that implementation risks, disruptions, and product deficiencies can be increasingly minimized with diligent, empirical scrutiny of the issues that arise; point-in-time conversions from the old system to its replacement; and ongoing customer feedback with the requisite, corresponding development efforts.

Since then, you know what’s changed? Not much.

Let’s Review

Just for the fun of it, we used AI to search on this question: “What do insurance executives fear most about replacing core systems?” To summarize the responses, insurance executives fear:

1. Non-compliance with regulatory requirements. Their concerns stem from the fact that their legacy systems may not meet current regulatory standards. They extrapolate that to mean modernization efforts may require significant compliance efforts to ensure adherence to data privacy, security, and other regulatory requirements. Well, yeah.
2. Change. That makes them human, of course. And insurance companies typically have strong cultures and histories, leading their employee to resist adopting new technologies. It seems to us that puts 1 and 2 at direct odds with each other.
3. Interrupting their business operations. It’s possible that replacing core systems can disrupt business operations and cause losses in productivity, revenue, and customer satisfaction.
4. Technical complexity. That makes them human, too. Especially if their legacy systems are outdated, fragmented Frankensystems — and difficult to integrate with new technologies — fears 1 through 3 can be justified.
5. The investment of time and money. Especially if their implementation projects aren’t managed diligently and expertly to get them right the first time, they’re right to be afraid.
6. Loss of competitive advantage if competitors adopt new technologies faster, leading to market share losses. Given #5, that fear is completely justified.
7. Difficulty in phasing out legacy systems, ensuring smooth transitions, and #3.
8. Inadequate planning and strategy that leads to the implementation of systems that may not meet business needs, leading to stalled or failed initiatives, wasted resources, and loss of job security.

Are all of those fears justified? Yes. Are all of them warranted? No.

We Got This

We concede this might be self-serving. But our take is numbers 1-8 above reinforce the need for insurers to choose their vendors carefully. If your vendor can’t reassure you it will mitigate and minimize your risks of numbers 1-8 above, we know some guys.

We’ll be happy to help you get your core system replacement right the first time.