Solution Partner Views
The Key to Modernization? Do the Opposite
Modernization programs at insurance companies are complex undertakings, so it`s no surprise that the industry continues to have a poor track record of actually implementing transformational initiatives.
To improve the chances of success, insurers might consider taking a lesson from the George Costanza character in the “Seinfeld” TV series and “do the opposite” of most of the things they`ve been doing. In the episode, George is lamenting his life to date and decides to change things then and there, beginning with his lunch order: “Yeah. No, no, no, wait a minute, I always have tuna on toast. Nothing's ever worked out for me with tuna on toast. I want the complete opposite of on toast. Chicken salad, on rye, untoasted ... and a cup of tea.”
Along with doing the opposite, insurers should be realistic about their business process and technological maturity levels, and understand that a modernization program will likely be far more complex than anything they`ve ever done.
For most insurance companies, doing the opposite starts with how they define what they`re trying to accomplish. Many companies tend to focus on the thing itself, in this case the new system—the shiny box that once implemented will fix all of their problems. Such an approach often starts a cascading flow of events and activities involving vendors, methodologies, steering committees, etc., that more often than not lead to the modernization effort being sub-optimized from the start.
Instead, companies should focus on what it is they`re really trying to accomplish from a business perspective, and why it`s important to do so. That approach leads to the kinds of substantive and cross-functional discussions that begin to stake out the primary goals and objectives for success. This is a good example of the kinds of things that many insurers struggle with: they`re simple in concept but complex in execution, which is why they often don`t get done.
The reality in most insurers is that it`s easier to implement a new system without asking the difficult questions about sacred processes and functions, and how they should be handled as part of any modernization effort. Even for companies that do ask those questions, they often don`t go far enough. For example, the question shouldn`t be “how will we incorporate this long-standing process into the new technology ecosystem?” Rather, the real question is: “Why do we need this process in the new technology ecosystem?”
To fight the cultural and political instincts to take the easier modernization road, remember to keep the opposite in mind, at least as a mental exercise. For many insurers, that would mean honestly assessing how some of the simple yet effective tools in the IT toolbox are actually practiced. Good examples of this are IT disciplines like enterprise architecture and agile software development.
Nearly all insurers have these functions, but the difference maker is really how mature they are at practicing these functions. In its most basic forms, architecture will help to define the “what” in the question of “what are we trying to accomplish,” and an agile approach will help to address the question of “how will we do this” while using a flexible and incremental approach.
Beyond the basics though, the use of enterprise architecture principles as a way to keep the complex simple by defining, describing, and communicating the business goals, organizational structure, and technology objectives of the project are not wielded effectively at most insurers. A mature enterprise architecture practice will push to ask the hard questions, enabling the insurer to get deep into the operational models and practices, where the real changes often need to occur.
The same is true for using agile development approaches. Of course nearly every insurer will proclaim its use, but having everybody stand during a morning meeting only to go back to doing things the way they`ve always done them is not agile. Agile has been twisted into different things over the past several years, but at its core it engenders adaptability, openness to change, and flexibility, along with learning quickly from mistakes. Those are exactly the kind of simple-to-say but difficult-to-practice principles that are essential to the successful implementation of modernization efforts.
So, we know it is not enough to just say that we use architecture and agile. It`s really about how we use these capabilities and approaches to do things differently (even the opposite) than we`ve done them in the past. That`s where the one-two punch of mature architecture and agile practices within insurers becomes a powerful force.
Agile was created with small teams in mind, and in larger initiatives it`s difficult to scale the characteristics of agile to the size needed for large, complex programs. However, by applying some principles of architecture to agile, large teams can be organized as a collection of several smaller and more effective teams. This allows loosely coupled teams to stay connected and organized across functions and disciplines, while also allowing an agile development approach to scale to meet the needs of large projects and programs.
That said, this is no magic wand. Such an approach still requires months and even years of practical application, allowing the time for making the mistakes required to induce learning and make real progress.
Many insurers believe they have the wherewithal to tackle large modernization efforts, even when they don`t have a successful track record for delivering even smaller efforts. Call it overconfidence, optimism or just plain ego; so many insurers try to deny the simple truth that it`s difficult to be good at anything without practice and experience.
Tennis serves as an instructive example. It`s a fairly simple game in concept, and is almost trivial to describe, but it takes years of commitment and practice to develop any kind of proficiency. For professional tennis players, who actually earn a living playing the game, the learning curve can be even longer. The same is true for modernization programs, and the underlying business and technology methodologies and disciplines required for success.
That`s why it is critically important for insurers to honestly assess their own capabilities, and if necessary combine their own experience with the experience of others, to optimize the chances for modernization success. When looking for expertise in these areas, insurers should not look for the least expensive hands they can find through large staff augmentation companies. Instead, they should look for professional services firms that have a deep experience and maturity around delivering large complex programs by leveraging architectural disciplines with an agile approach.
The best of these professionals know how to ask the right questions, how to organize for success, and how to identify the resources necessary for achieving desired outcomes. These architects and project leaders know how to decompose complex programs and projects into easier to understand and more manageable pieces, all the while keeping the macro level view of the entire undertaking in everybody`s field of vision. In this context, they “do the opposite” by implementing large, complex modernization initiatives by not running them as single all-consuming programs.
Article courtesy of X By 2.