Other parts of this series:
A unique hybrid solution, tailor-made for UK providers
In this blog series, I’ve been looking at a weighty problem shared by nearly all insurance providers: the millstone of legacy IT. With most insurers having at least five (and more likely as many as 10) product platforms, it’s no surprise that tech leaders in these organisations are under such enormous pressure to change.
The problem? The favoured approach – all-out migration to a modern, new platform – is fraught with pitfalls and prone to failure. In response, we’ve developed an alternative hybrid approach which, far from presuming a particular solution from the outset, tailors a blend of modernisation and migration to each insurer’s specific investment and risk appetite.
My previous blog explained that the approach we’ve developed spits into two key phases: assessing the ‘as is’ application landscape and developing the right roadmap for change in Phase One, and putting that into practice in Phase Two.
This time round, I’ll be explaining in a bit more depth what Phase Two, what we call ‘Portfolio Evolution’, is all about. At heart, it’s where we focus on delivering the planned benefits for each client by executing the Application Portfolio Strategy we defined and refined in Phase One.
Examples of priority actions could include decommissioning, remediation, re-platforming, replacement, consolidation, enhancements, outsourcing and SaaS. As part of this execution, we implement rigorous governance and application portfolio management capabilities to manage the transformation and retain the healthy portfolio state once we’ve gone.
Instead of doing away with legacy, we take the current IT estate into full account. That means leveraging existing investments in platforms by using a range of ‘treatments’ to modernise the underlying technology and deliver a sustainable solution over the long term. Maintaining the functional integrity of the original platform also minimises the operational impact of change.
Where it makes sense, and based on a proven set of clear guiding principles, we migrate from the current platform onto a new platform (or another platform in the portfolio). We also consider ‘light’ migration options for simpler product types and small books of business.
Solution delivery is accelerated by combining global modernisation and migration capabilities with industry- and UK-specific expertise and methodologies. Once the transformed solution’s in place, insurers can opt to have it run as a managed service, with two distinct services designed to meet the needs of closed book product platforms versus development of active propositions for new business.
None of this is theoretical. It’s an end-to-end approach that works. And here are the headline benefits:
- 30-50 percent reduction in IT operating costs
- 20-40 percent reduction in IT cost of change
- 20-40 percent improvement in agility
- 10-20 percent improvement in operational efficiency
- Improved digital readiness, leading to better customer experiences.
Looking ahead, we identify huge benefits for providers that integrate blockchain technology into their new/modernised product platforms. It’s an extremely exciting new technology with huge potential for the industry…and I’ll be examining it in more detail in my next series of blogs.
Thanks for reading.