Many, if not most, insurance companies bear the scars of costlyand unsuccessful system replacement initiatives. The implementationstories for both custom development and packaged software solutionsoften have the same unhappy ending - millions of dollars spent,with no or only partial systems to show for it.

Over the past several years, the market for property/casualtyinsurance packaged software has matured. More and more carriers areturning to packaged software to enable more flexible processes andtake advantage of more advanced IT solutions to replace their agingsystems. Our experience is that with solid software solutions andan Agile implementation approach, carriers can heal their woundsfrom past failures and better position themselves for success.While the Agile approach may be better known in the customdevelopment arena, the increasing popularity of packaged softwaresolutions creates an ideal opportunity to take time tested Agilemethodologies and apply them to packaged softwareimplementation.

An Agile approach can take many forms, but there are a few coretenets that should always be followed.

Iterative and incremental cycles

Traditional project lifecycle activities such as requirementsdefinition, design, development, testing, and business acceptanceare completed within time-boxed cycles (ideally 2-4 weeks induration), whether the project is custom development or packagedsoftware implementation. Each cycle results in a working iterationof the solution, which is continually refined and improved uponwith each subsequent cycle based on business priorities. The beautyof this approach is that progress can be monitored throughout theproject's lifecycle and improvements made when needed.

A working system

A working system that meets or exceeds the business goal(s) isthe primary means of measuring progress. Frequent delivery of aworking solution via the iterative and incremental cycles alsohelps to reduce the incidence and impact of major requirement ortechnical changes. Packaged software easily facilitates an Agileapproach since the software presumably already has comprehensivebusiness functionality and an architectural foundation to buildupon.

The packaged software itself can be used as a requirementsdefinition tool. It is usually easier to validate or further definea requirement, especially a complex one, by interacting with aworking system that conceptually supports that particularrequirement. When identifying requirements, a business valueapproach is recommended to ensure that the effort to modify apackaged system to fulfill a requirement is commensurate with thebusiness value it provides.

Team collaboration and visibility

The entire team is encouraged to participate actively in theAgile process and to have unhindered visibility into projectstatus, deliverables, and plans. This includes constantcommunication between the implementation team, as well as theend-users of the intended system. It is important that the virtualwalls between traditional role silos, such as business analysts,developers, and quality assurance analysts, be removed to ensurecollaboration between business and IT. In general, collaborationand visibility helps to engage the team and encourages theircommitment to implementation success.

Embrace and anticipate change

With Agile, changes are an expected and natural part of theprocess. With a more traditional Waterfall-based approach, allrequirements are expected to be identified upfront, at which pointthey are designed, built, and tested in sequence; making it muchmore difficult to make changes along the way. Unchangingrequirements are usually not realistic, especially for large,complex system implementation projects. Using an Agile approach,teams are better positioned to adapt, based on additionalknowledge, experience, and shifting business priorities.

Characteristics of Successful AgileProjects

The anatomy of an organization that is successful in adoptingAgile practices varies, but it typically demonstrates the followingcharacteristics.

Leadership support

The leaders of the organization and of the implementationproject must support the Agile process and be engaged to ensure itsadoption by the implementation team. This includes the IT andbusiness owners of the system, and the project and programleadership. Without proper leadership support, project teams canflounder, resulting in troubled projects and weak acceptance ofAgile.

Defined Agile process

It is a common misconception that Agile practices foster anunstructured implementation environment. To the contrary, thesuccessful adoption of Agile practices actually requireswell-defined processes and the diligence to ensure these processesare being followed. The team needs to understand the process andwhy each step is important. When Agile is new to an organization orif there is resistance to using it, a common practice is to followseveral of the core Agile practices to start, and then incorporateadditional practices over time. It is important for companies totailor the Agile process to meet their organization's needs andculture.

Implementation team support

It sometimes takes courage to try something new. This may berequired of project team members new to Agile and/or packagedsoftware, especially if they have become entrenched in otherimplementation approaches and/or custom software development.Trying something new also introduces some level of risk, so we havefound that project teams who have courage, curiosity, anddiscipline are most successful with Agile. The team can be furtherincented by each successful iteration cycle and positive feedbackfrom key project stakeholders.

Cross-functional teams

Cross-functional teams aligned by functional area tend toperform best when using an Agile approach. This allows teamrepresentation of all roles required to complete a functional area,ensuring a broad perspective is applied. For larger implementationteams (>10 people), it is best to have multiple, smallcross-functional teams, rather than one large team. In this case,as one might suspect, communication between teams is essential.

Testing focus

Although many Agile projects include a Stabilization phase atthe end to finalize testing and acceptance of the system,successful companies also invest heavily in Quality Assurance (QA)during the iterative cycles. Many times, the creation of test casesand automated test scripts are included in the completion criteriafor requirements. This allows for test cases and regression testingcoverage to be built over time. Utilizing a high quality packagedsolution allows companies to focus their testing efforts on theareas where they change the base application, although providingsome test coverage for the entire application and architecturalcomponents is still important.

While the Agile methodology is not new to the world of softwaredevelopment, it has only recently been embraced by the P/Cinsurance industry as a viable option for the implementation ofpackaged solutions. As more insurers utilize Agile processes todeliver successful implementations, we expect to see the adoptionof Agile increase. In today's world where most insurers need to 'domore with less' while fostering an organization that can changequickly to remain competitive, Agile methodologies (whether forimplementation of software development) offer a proven path toproject success.

(Barrett A. Brooks is consulting director,professional services, for Guidewire Software. He can be reached at[email protected].Aaron T. Howell is senior consulting director for Guidewire. He canbe reached at [email protected].)