Given the business we’re in, we like to keep an eye on the trends, attitudes, and inclinations of the companies we might consider prospects in the industry we’re in, that being insurance. Consequently, we took note of a survey of 396 CIOs and technology leaders by the consulting firm, Protiviti. Two things in particular caught our attention:
First, in response to a question about their motivations for replacing core systems:
- 76 percent cited risk mitigation
- 12 percent cited revenue generation
- Just six percent cited cost savings.
Second, when asked their biggest impediments to acting on those replacement needs:
- 41 percent cited implementation risks
- 24 percent cited time and disruptions
- 24 percent cited vendor product deficiencies.
We find that curious. Here’s why:
Maybe Common Sense Isn’t All That Common
In our experience, the two primary motivators for system replacements are (1) improvement and (2) improvement — the first in operations, the second in customer service. When our customers achieve those objectives, their risks go down, their revenues go up, and their savings increase. That made us wonder how the survey instrument might have been worded.
Likewise, 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. That made us wonder about the companies with which the 396 CIOs and technology leaders worked to report the impediments they did.
We think the most common-sensible things to do for any project, let alone a system replacement are:
- Determine your objectives
- Identify and define your requirements
- Perform your due diligence in vendor selection
- Talk to customers of your short-listed vendors.
If you don’t do those four things, you’ll be compromising your chances of getting it right the first time.