Implementing a new core system is always a learning process for an organization. While every insurance company is different, all of their system implementations tend to encounter the same sorts of difficulties. In my most recent executive brief, I outline the following 13 common mistakes to avoid in core systems implementations. Keeping these 13 “Don’ts” in mind will help to reduce the risk associated with these challenging transformational projects.
- Don’t Expect Too Much from Solution Providers and SIs. While they have experience, neither the solution provider nor the SI should be asked to lead or manage the entire project. Carriers must maintain overall ownership of the project.
- Don’t Ignore Solution Provider Recommendations. Solution providers are the experts in what their system can and cannot do. Respect their expertise. Carriers should explore configuration approaches exhaustively before thinking about asking for system changes.
- Don’t Create Win/Lose Situations. Micro-managing solution provider staffing, costs, and actions can be counterproductive. Instead, insurers should manage outcomes and agree on work processes and how transparency will be created. The end goal of a successful implementation should be a strategic partnership.
- Don’t Be Afraid to Create a Backlog. It is better to go live faster with a base system and learn from it than to go live later with a feature rich system that may be underutilized. Insurers should communicate this clearly to business users, assuring them that the initial release is not the final product, and that backlog items will get delivered.
- Don’t Ask to Change the System until You Understand It. Insurers should examine configuration options extensively—most modern systems can meet most needs through configuration rather than customization. Insurers should be open and understand suggested alternatives.
- Don’t Over-Engineer Your Workflows. Too many carriers build multiple business rules and notifications only to take them out in their second releases. Insurers should understand work queues and query capabilities, and ask whether business users would prefer query and queue tools or rules and notifications.
- Don’t Build Unnecessary Control Reports. Many companies have hundreds of reports that modern systems make obsolete. Modern systems accomplish all these with filters and views within work queues.
- Don’t Perpetuate Legacy Master Data. Legacy systems with poor data structures or configurability often made it easier to embed payment types, LOBs, and other business data into fields meant to do something else. Insurers should clean up these tangled data structures rather than perpetuate them.
- Don’t Convert Data When You Don’t Have To. Carriers should understand the cost for converting historical policy data and detailed transaction data before committing to expensive conversion projects. Data warehouses, document management systems and legacy inquiry environments can often be viable and much cheaper sources of the required data.
- Don’t Treat This as a Part-Time Job for Senior Leaders. Insurers need to free up their best people and backfill for them to get these projects done fast and right. Full-time project managers, adequate-skilled BAs and adequate testing resources must be assigned to complement the development team and solution provider resources.
- Don’t Skimp on Environments. Having too few environments can create artificial constraints that delay the development effort and limit the productivity of a carrier’s most expensive resources.
- Don’t Be Afraid of Risks, Manage Them Instead. Carriers can manage implementation risks by resourcing teams adequately, investing in quality assurance, creating transparency, and having the end users review deliverables from each sprint. The financial risk of cost overruns must also be managed. Successful carriers assign portions of the overall program budget to each project and work stream in advance.
- Don’t Expect the Organization to Change on Its Own. Many individuals within an organization will be apprehensive about the impact of the changes that implementation projects will trigger. Carriers should align the organization by communicating the need for change and the benefits to be achieved. The end goal is a culture that embraces and contributes to change.
Implementation projects are often painful and downright ugly. Ironically, carriers typically end up better prepared for the project after they complete it than before they start it. Avoiding these 13 “don’ts” can help insurers avoid pitfalls sooner rather than later.