De-risking policy administration platform conversion
The right administration solution can provide companies with competitive advantages for years to come due to the significant improvements in the speed of bringing new products to market and lower costs.
A policy administration system replacement decision has many far-reaching organizational impacts. The right administration solution can provide companies with competitive advantages for years to come due to the significant improvements in the speed of bringing new products to market and lower costs.
Right platform, right capabilities
Insurers looking for the right administration system typically seek out platforms with certain capabilities:
- Technology flexibility with ease of integration
- A fast, flexible product introduction process
- Straight-through processing
- A strong, configurable user experience
- Access to analytics and insight on the customer base
- Low IT costs and with strong cost predictability
A strong vendor assessment is a critical component of any platform selection. However, insurers often don’t pay adequate attention to some of the key implementation project success factors that are directly in their control. It is important that insurers consider more closely whether their organization is really ready to jump into a project with such far reaching implications. For better indicators of project success, insurers must look beyond the vendor and assess their own organizational readiness.
Assess your organizational readiness
Runners don’t tackle a marathon without carefully considering their training plan, overall health, support strategy, and many other factors. However, companies considering replacing their policy administration system often start the vendor selection process by seeing what’s available in the market.
Looking at vendor options is, of course, an important part of the process. However, conducting an internal organizational readiness assessment of the organization’s capacity to conduct a search and implement a new administration solution can better help position the insurer for choosing the right vendor and introducing a new platform.
An overall health check can spotlight questions such as:
- Do you know the right questions to ask in your vendor search?
- Is there unified organizational buy-in for the search goals?
- Have you considered all of the many stakeholders in your organization that will be impacted by the project?
- Are there factors that could impact the project that need to be spotlighted in the search process?
A common vision
It’s essential to approach vendors with a strong, unified vision of what defines a successful platform choice and its key considerations. Are initial costs and the eventual administration cost per policy the final driver? Is the business and IT aligned on the top selection criteria? It’s not unusual for companies to enter into the process with somewhat conflicting goals and priorities. However, organizations must ensure alignment on such a critical initiative.
Consider the following while making your preparations:
It’s essential to approach vendors with a strong, unified vision of what defines a successful platform choice and its key considerations.
Charter and project change control: Do you have an overall charter for the selection project and success criteria? Do you have a clear buy in from key organizational leaders regarding objectives? If different leaders have different project goals, someone is bound to be disappointed.
Change control process: Do you have an established change control process? Any project of this magnitude will rely heavily on change control and a clear decision path to keep moving. When there is no clear path for a decision, projects can be mired in the decision making process, resulting in no decision at all.
Product portfolio: Do the key decision makers understand your administration needs within your current product portfolio? What about your needs five-to-ten years from now? Answers to these questions are critical both to the vendor search, cost estimation process, and the actual implementation.
Other questions to consider include:
- Do you have a clear picture of your business by product type?
- Is your growth strategy clear?
- Do you have any older blocks that are unclear in terms of their features?
- Do you have a structured repository of this information? What will the effort look like to gather all of your product information, forms, statements, and business rules?
- Are your business processes well documented?
Organizational capacity: What is the organizational capacity to support a new system implementation? Are you positioned to make the investment in talent that it takes to make your project successful? Key considerations for this area include:
- What will the team look like?
- Will you be able to leverage your key team members and thought leaders and still run the business during the search and implementation process? Including the right individuals that will take you forward in your business is critical for success.
Legacy system considerations: What is the current state of your administration process? A few items in this area to consider:
- What specific pain points are you trying to address?
- Are these issues thoroughly document and summarized in an organized fashion?
- Are there any known data anomalies that could impact converting to the new system, such as bad data or lack of history?
- Do you have organizational expertise in the current data structures?
Long-term vision: It is critical to consider the long term vision for the new platform. It’s easy to focus on the near term and the business goals around a new administrative solution, but organizations must consider its impact ten years down the road.
- Will this new solution simplify and eliminate administration challenges, or will it simply add another system?
- Is there a clear upgrade and renovation strategy for the solution to ensure long term health and relevance?
Is your organization ready?
Insurers considering making the switch to a new platform should begin by taking several steps. Before commencing a formal search, consider creating a readiness dashboard including the aforementioned criteria and other items. Applying a grade for each area can drive an important internal conversation on the conversion process.
This sort of effective health check will provide a brutally honest rating to each area and highlight areas of potential risk. For example, could the lack of client resources on the project result in an extended project timeline or higher vendor costs? Is there an older block of business that is not well understood that could cause problems in the conversion phase? A less-than-stellar rating in any one area can impact the search, and ultimately the project’s success.
The stronger the grade on the health check, the more accurately your vendor can estimate your potential project cost and support needs. A strong health check means fewer surprises down the road.
Vice President / LifePRO® Product Owner