Keep Your Eye on Business Value to Avoid Core System Mulligans
Use these approaches to focus on business value and accelerate your P&C core platform implementation:
Adopt a policy of zero customization
(zero custom development).Move the platform into production as quickly as possible with its base capabilities.
Explore additional configuration after deployment.
When I first moved into an analyst role, I was struck by how many insurance business and tech leaders acknowledged they were going through a do-over with their core systems. A previous attempt (or attempts!) to modernize had failed or had been a disappointment, so they were trying again. This conversation was common and I found myself regularly encouraging these leaders, who often seemed embarrassed, that they were not alone and were actually in good company with many peers across the industry who were also working through system do-overs.
Over the next few years, I noticed a change: more insurers were reporting successful deployments with shorter implementation timeframes. This was not universal – large insurers with complex webs of legacy systems were still requiring years for modernization – but mid-size and small insurers were having success and reporting shrinking deployment timelines that were often under a year.
This trend was encouraging. I enjoyed exploring this and paid close attention as leaders from these companies shared their experiences. While every story had its own unique twists and turns, throughout these conversations I heard common themes.
These leaders had learned from past failures – their own, or others they had observed. Past attempts had often been derailed by a sense that everything had to be “just right” before the system could be deployed. Core platforms are sold based on their ability to be easily tailored through configuration tools, with custom development and custom integration also available. Implementation teams took this message to heart and engaged in extensive configuration and customization. They wanted to fully realize their desired future state from day one.
However, instead of achieving nirvana, extensive configuration and customization led to delays and difficulties. Project timeframes stretched into years. Some senior leadership teams lost patience and pulled the plug on their implementations. When implementation teams did finally deploy these heavily configured and customized systems, they were surprised by unanticipated real-world requirements. Their systems were overly complex and difficult to use. These teams also struggled with upgrades after initial deployment. Vendors would offer new releases with valuable enhancements, but the insurers could not apply these updates to their uniquely tailored systems without launching massive projects that looked more like full system implementations.
As insurance leaders embarked on new implementations, they were determined not to repeat the mistakes of the past. They recognized that delays were costly and the sooner they could begin using the systems the more business value they would realize. (An unused system was doing nothing for them.) The focus on “speed to business value” drove key changes to their implementations, and in these discussions I heard the following approaches often cited as critical success factors:
Adopt a policy of zero customization (zero custom development).
These leaders recognized that, while core processing functionality is essential, it does not provide differentiation. It is better to adopt the standard functionality already in the system – even if this is different from what users are accustomed to – than to invest time and money (and risk delays) tailoring or reinventing capabilities that will be hidden and provide no competitive advantage. Along with no custom development, these leaders were careful to keep configuration changes to a minimum.
At the same time, I saw some vendors begin to shift to a prescriptive implementation approach. Instead of extolling how flexible and configurable their systems were – we can do anything you want! – their message on system implementations became, “We’ve done this many times before. Let us show you how to configure and use the system to deploy quickly and be successful.”
Move the platform into production as quickly as possible with its base capabilities.
This often required some adjustments from users. For example, a user might have to work with two screens instead of one custom screen. However, the business value of getting up and running outweighed the inconveniences.
Along with this, leaders spoke of how critical it was to prepare their people for change. They focused on helping their people understand that “change means change” – a new system would mean they would all be doing things differently. This would require adjustments from everyone that might be unfamiliar and uncomfortable at first, but their use of the system would continue to evolve and improve over time.
Explore additional configuration after deployment.
These leaders commented on how often their teams found the user experience and business processes to be different than they anticipated when they began using a new system. I recall one leader saying that, after deployment, his team had to drop the mental constraints they operated under with their legacy system and learn to think differently about how they could do business with the capabilities of their new system.
By waiting to gain actual experience, instead of guessing beforehand, leaders found their people were able to make informed decisions about configuration changes. Often, after deployment, they discovered planned changes were unnecessary and they set them aside. Changes that were still necessary could be done more surgically and more quickly with confidence they would drive business value.
These three approaches are not a magic formula, but they featured prominently in these discussions with leaders that were making it to production with their new systems in months instead of years.
A final point from these discussions: these successes were not the end, but the beginning. These leaders and their teams continue to build on the foundations they have established with these new core platforms. They are adding new capabilities and new technologies to improve their customer experience, enhance their operations, and continue growing their businesses.
Vendor Selection is Critical
To succeed with core system implementations, it is essential that you select the right vendor partner
with a platform capable of supporting your business today.
We’ve assembled this directory of P&C core platform solution providers.
We’ve also provided eval criteria for starting a vendor shortlist.
Have questions about your selection process?
Wondering about the P&C core platform vendors you’re considering?
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