Digital Transformation - Insurance (Legacy Modernization)

Abstract:

In recent days, it has been observed that numerous update on insurance company’s legacy modernization due to ample elucidations such as customer demand, towards competitive edge, technological improvisation towards current challenges and future demands. Modernization of the legacy systems is still considered as one of the thought-provoking topic for discussion and considerably fewer when it comes to execution phase. There are countless explanations like complexity involved in transformation, cost tag etc. to support the opinions of insurance company’s stakeholders on their stand point, however the reality & need for the hour is very distinct. It’s not obligatory that all the complex developments will be resolved only with intricate resolutions, even breaking the intricacy in to simple actionable points and cataloging against simple solution will also help them in successive transformation. Concluding the cycle of change will never ends and as the only thing that is constant is change, so it’s prudent to take the constructive judgment in time to capitalize the competitive market.

Introduction:

Present-day increasing regulations, customer’s demand, profitability of the organization, agility and innovation, tussle to achieve break-through, Competitive verge in industry are the key factors that are imposing the insurance companies to opt for the technological transformation. However, Legacy modernization is still considered as a major threat to insurance companies even in many developed countries. Though, many organizations are eager to ripe the benefit out of it but retains its foot back when it comes to table for execution. Modernization of legacy system is cited as complex bundle clustered with lot of benefits and challenges to organization.

Overview:

The reluctant response towards the legacy transformation is not only observed in Indian market, it’s also evident across the developed nations. However, many technological product vendors are started unbundling the complexity in this process of transformation and backing the insurance companies to get well equipped with latest technology for their customer’s instant gratification. The advantage of the modernization is literally agreed by all the stakeholders in the organization despite of its manifold challenges. 

Challenges:

The word “challenge” at times excite the people who desires to leave their trails for others. Including Insurance companies, for any organization - the key objective at the end of the day is their Profit and Loss. While trying to unfold the complications of legacy modernization, the never ending list will upset the stakeholders who are indeed fascinated in this revolution.

• Vendor Evaluation – Recognizing the solution that addresses the current challenges and futuristic needs

• Respond to customer’s demands

• Contemporary Player’s technology

• IT investment and the risks involved

• Comply with fluctuating/increasing regulations

• Data Migration

• Parallel run with legacy system

• User’s/Operations acceptance for new system

• Return of Investment (ROI)

• Unique challenges faced during the SDLC during

• Satisfactory Infrastructure 

• Business Solution Mapping / Gap Analysis 

• Product development & Bug Fixing - Unit Testing 

• Integration with interfaces / core systems / Satellite Systems

• User Acceptance 

• Model office & Parallel run 

• Go live & Production Support 

• Project Handover.

However, it’s the universally acknowledged fact that most of the implementations are moved in to production by compromising the looked-for objective instead of expected deliverables. 

Approach: 

Every single problem has its inimitable solution, so to conquest over the above cited challenges, a skillful approach towards the transformation will relief the organization to effectively accomplish the milestone. The unsung fact is that, it is not always the multifaceted exercises will get along with intricate solutions, which can be also gratified with submissive style too. Suggesting the simple model to breakdown the complex thought process established against the legacy modernization.

Breaking the Ice of Inherent Infrastructure 

Discuss – Initiate the thoughtful discussion with the stakeholders on the challenges encountered during the day-to-day operations. Consolidate the list of encounters across the organization which are certainly encumbering the production and turnaround time (TAT).

Evaluate – Recognize and investigate the effective alarms raised by the stakeholders which hampering the process and results in condensed production and few examples as mentioned below

• Increase in manual work instead of automation
• Practicing Work-around process since the expected functionality in existing system is not in place.
• Limited Tracking of activities, lack of work-flow mechanisms 
• Non-availability of paperless environment 
• Delayed response to the customer in terms of policy servicing (Call Centre, e- commerce, Mobility etc.)
• Inadequate sales channel process for the growing demand (CRM, Salesforce, E-commerce etc.)
• Availability of seamlessly integrated end to end systems
• Challenges in MIS & Reporting 

Decide – To address the major challenges and to contend in the market, technology up-gradation is becoming vital now-a-days. Blameless system in place will always leads to effective work which complements the cost-effective business.  Furthermore,

• The consideration towards the modern system has to be nominated keeping return of investment (ROI) in cognizance. 
• Recommending the new system must be proficient to address the current challenges and futuristic implications 

Strategize – It is always sensible to possess the phase wise modernization instead of choosing on the whole/blanket approach. Well-defined transformation strategy and Digital Strategy will unquestionably pay back the organization. Approach headed for the legacy modernization should be distinct in such a way that it has to address the current and future implications. 

• Define the phase-wise approach based on inevitability
• Appropriate initiation and exit process for each activity
• Sketch the responsibility matrix with stakeholder’s concurrence
• Adopt the time-line for the complete execution
• Anticipate the deliverables
• Provide significance to Quality
• Illustrate the return on investment (ROI)
• Take account of risks and mitigations 

Implement – Strategizing the execution in proper direction will provide the comfort on smooth transformation. Nevertheless, implementation is the challenging phase for any insurance companies which makes them to double think on legacy modernization. But, deliberate strategy will diminish half of the challenges during execution process. Some of the fundamental hints which needs to be taken care during the implementation are 

• Cautious gap analysis / business solution mapping embarked with current challenges and future needs
• Opportunity to get rid of unexploited functionalities in the system
• “Good to have & nice to know” kind of change request / add on functionality should be reposed based on the flexibility of the system
• Good user training along with sufficient exercise supplies
• Satisfactory user acceptance phase with restricted compromise on work around

Monitor It’s well evident in countless occurrences, the most succeeded implementations are the results of proper governance throughout the execution. But, unluckily many insurers needs to improvise on this monitoring process which will definitely boost them to nod their head with optimistic approach to the legacy modernization.  Some of the elementary monitoring activity throughout the project will effectively support the insurers for uninterrupted executions

• Organized documentation – Business requirement document (BRD), Functionality specification document (FSD), Software requirement specification (SRS), High level design document (HLD), Low level design document (LLD), Requirement traceability table (RTT), etc.,  
• Evading communication gaps
• Availability - Effortlessly approachable stake holders 
• Accountability – Responsibility Matrix
• Group effort towards the anticipated objective
• Stipulated time line as planned 

Report- On every occasion if middle management attends the telephonic call or walk-in to senior management’s workspace, 98% they will end up with checking report / data / statistics.  It’s continuously crucial to prompt with right data at right time. The correctness in data should benefit the senior management / stake holders to encourage the rigorous governance of the project if the progress is not on track or towards the objective. 

• Sensible reporting during err.
• Signaling if execution is out of track
• Off-the-rack alternatives for the execution
• Refining anything which drives erroneous 

 Conclusion: 

The fact that in spite of its unique hustled complications, many insurance companies are gearing up for the technology transformation to relish the advantage out of it. The skillful approach towards the legacy Modernization will smoothen the transformation process and pave the way to get the desirable outcomes. To boost the insurance companies on this positive assessment, the latest technology product vendors are also started eyeing the modern fluctuating regulations, customer’s demand in industry for enhancing their existing solution to address countless needs of insurers. Apparently, this is the welcoming note for the insurers to make operate the best solution which suits their instantaneous and futuristic needs. 

“Deficient existing procedures triggers the new etiquettes - revised guidelines entails the change in processes - to practice the revised improvements - insurers are insisted to go for modernization – However, well before the implementation of those practices by devastating the real-world challenges – supposed guidelines are becoming deficient for the market – New protocols drifts in the market…”  

Concluding that the cycle of change will never ends and as the only thing that is constant is change, so it’s prudent to take the constructive judgment in time to capitalize the competitive market. 

Publications: 

• “Legacy Modernization - Threat to Insurance Companies“ during Oct-Dec 2014 Publication by Insurance institute of India 
• http://www.coi.org.in/downloads/NewsLetter_SWF%202014-2015/Journal%20Oct-Dec%202014/index.html  (Page 119 -122)