Modernization Myth busters!
In my view, top three reasons why modernization initiatives in Insurance organizations do not go well
1 What you want is what you get- More often than not, future needs are not articulated well enough from a business vision, strategy and relevant capabilities needed
2.Misalignment of stakeholder objectives - Business strategies and IT goals have a divergent view as early linkage is not established
3.Value is not visible and perceived - Modernization initiatives are either not prioritized based on value generation potential for the business or such value is not visible enough through the program
What are the best practices?
• Capability Driven Approach- Identify the future capabilities that are aligned to business vision, strategy and drivers and then the relevant technology enablers (e.g. – “Going direct "is a key strategy for many carriers to capture the Generation X. This translates into enhancing channel capabilities and effectiveness; from a technology perspective, this leads to investments in initiatives like SOA, Web services etc.)
• Prioritization through value - Identify the business value potential of each capability and prioritize the change initiatives based on value. Yes, we know the capabilities- but do we know which of them produces the best value for the carrier, their partners and clients? For example, enhancing online quote and new business capabilities will benefit both agents and direct customers; straight through processing for new business underwriting will enhance operational efficiency and hence impact cost per policy issued. Value based prioritization can help decide on the right one to go after.
• Stakeholder involvement- Ensure key stakeholders from business and IT are involved and engaged throughout the program. This is an important criterion for the success or failure of the program. Many a legacy modernization initiative has fallen through the cracks either the right stakeholders were not participating or not involved on a continuous basis.
• Governance and Change Management- Establish a governance process that guides, monitors and promotes progress of the modernization leveraging a metrics driven approach. Communication at the right level and frequency, continuous monitoring of risks to the initiative and deploying mitigation steps are critical to governance. Any modernization initiative brings in change and change is difficult to accept- Insurance modernization programs are not an exception to this rule and deploying appropriate change management program is critical to the success.
Any other thoughts on best practices which Insurance organizations should be adopting on the path of modernization initiatives.
