As the economy continues to sluggishly creep up the road to recovery, firms have varying notions for how to best position themselves for success when the market changes. As noted in a recent survey by SMA (Strategy Meets Action) of 28 insurance executives, one of the top ten imperatives for insurance companies in 2010 is enabling a “fast path for new product development.” This objective, of course, is constrained by the systems that support the current product offerings, and these systems inevitably arise as the roadblock to achieving the business objective.
Tightly coupled with this objective of quicker time to market on product offerings is the inevitable need to increase efficiencies in current key business systems. Whether by enabling communications between disparate systems for a more holistic view of the insured, or simply working to decrease the endless sea of manual, paper-based processes, there are several related steps that should be considered from a competitive advantage standpoint; but we’ll get to that topic another day.
Within a single organization, multiple policy admin systems have likely been deployed – each with the best of intentions to streamline operations, allow for enhanced product offerings, consolidate numerous existing platforms… all of these are typical scenarios in the companies we’ve worked with. The challenges come when companies realize that a nine month time to market for a new product offering won’t position them well in the competitive landscape. Whether that turnaround involves a highly skilled back office implementation team, or slamming the product into the current system, updating a myriad of sprinkled interfaces to just to get it out the door, the reality still exists – the systems just can’t compete.
In response to this realization, we’ve had many discussions with companies who are looking to replace or consolidate their policy admin systems, and have experienced significant pain in the past in trying to do so. The foremost suggestion I’d offer relates to the stage that is consistently undervalued and poorly positioned: planning. It’s critical to realize the importance of adequate planning before you go down any path. We’ve seen time and again organizations who short change the planning and requirements process thinking that they have it under control. Companies who say they haven’t had any problems to date and things are running smoothly likely have limited or no visibility into the actual state of progress, deliverables, and budget on any of these replacement projects, which all surface at the 11th hour when everything turns from “green to red.”
When it comes to implementation and delivery, these companies find massive divergence between their expectations and the pending solution due to lack of preparation and planning. I won’t even get into the pitfalls we continually encounter in the requirements gathering and definition process; again, a topic for another day. But simple questions like, “Has the business case been defined and executive sponsorship obtained?”, or “What is your initial rollout strategy?” must be answered, and agreed to before you even start the package selection process.
You have to ask the question: What were you looking for in a new system? Look at your competitive landscape, and focus on what makes your company unique (hopefully in a positive way), and provides you a competitive advantage in your space. As you embark upon the package selection process, there are many platforms that may have flashy, robust functionality (as the vendors will be more than happy to demo when you get to that stage of the process), but you need to focus keenly on the specific functionalities that will enhance your organization’s differentiating factors, and look under the covers. Whether you’re doing the vendor selection yourself or with assistance from a consulting firm, be sure to dig deeper on the key requirements you’ve noted, and ensure the demos meet *your* critical scenarios to avoid purchasing a flashy platform that fails to meet your needs. When all is said and done and your peers ask how the current system is working (if you’re fortunate enough to get it up and running), while it may be lovely to have the newest flashy system, if it doesn’t meet the original business objective and enable your key differentiating factors, it might as well be a Fisher Price play set.