Anil Chitale is senior vice president and leads the p&cdivision at MajescoMastek.

There are six remotes in a bowl on your coffee table, if youinclude the gaming joystick. Five of the remotes operate specificunits (surround system, cable, Blu-Ray, TV, etc.) and one is auniversal remote.  When you're ready to watch televisionyou can juggle three of the remotes, or pick up the universal.

The universal remote is a clever gadget, but has its own issues.First, it has 52 buttons and a knack for reprogramming itself everymonth or so. You realize you never use 95 percent of the functions,making it counter-productive to weed through all the buttons justto find "record" or "mute." While the universal remote was builtfor everyone to be able to use it, it was not specifically designedfor you (the one who matters).

Insurers face a similar conundrum when looking at core systemreplacement. There is a plethora of core solutions in the markettoday with functionality stacks akin to a universal remote.However, the best, new, all-in-one, universal, one-size-fits-allcore system ends up stereotyping insurers rather than addressingthe uniqueness of each. Oftentimes, third parties join in tocustomize and implement the system, while the core solutionproviders take a "hands-off" approach when the rubber meets theroad.

What insurance organizations need is something that is right forthem, not everyone else—right for now as well as the times tocome.  And, a system backed by an unrelenting commitmentto service an insurer's needs throughout and after theimplementation.

What works, isn't always what works best.

Consider the vast differences between p&c insurers as youthink about a one-size fits all approach. First, there are tiers.Is your organization a tier 1, 2, 3 or 4? What kind of business doyou write? Commercial lines? Personal lines? Both? Have you beenselling the same niche product for decades? Are you anopportunistic, aggressive insurer, good at trend tracking andtaking advantage of short-term opportunities? Is your target marketas narrow as a particular affinity group or is it as broad as theentire U.S. population between the ages of 18 and 85? Do you needdeep analytics or is blanket marketing continuing to work for yourcompany?

Considering these perspectives, the idea of a universal coresystem working well for everyone seems virtually impossible. No twocompanies are exactly alike, even companies that seem to be closecompetitors. Each organization, yours included, has its ownfingerprint, DNA, processes, and varied needs. Just because sixbuttons on the remote work well for you, doesn't mean that the restof the buttons are applicable to your needs. Likewise, investing ina new system based on features and functionality alone may offer aninsurer a lot of functionality, but not necessarily the rightfunctionality.

Does this mean an insurer should start with nothing andcustom-build a core solution to exacting specifications? Probablynot. You wouldn't want to build a remote from scratch either. Thereality is that there is a spectrum of core systems as well assystem providers. A quick look at the broad picture can helpachieve a balanced perspective on what might work best for a giveninsurer.

Thinking in Global Terms: The BroadCriteria for Evaluation

Key areas to consider when replacing a core system mightinclude: commitment, expertise, capabilities, and the maturity andflexibility of the system.

Buying a commitment

Investing in a core system also means buying into a 10-20 yearcommitment with a system vendor. What will that relationship looklike in 10 years? Is the vendor just as committed to the industryas you are? Will they "have your back" when the industry shifts orregulatory needs change?

Large IT providers, especially those who specialize in ground-upsystem building and business process outsourcing (BPO), have atendency to gravitate to underserved industries, resulting in theirinvestments and resource serving a wide range of industries. Abetter fit might be an organization committed to the insuranceindustry, demonstrated by their successful, long-term relationshipswith other insurers.

Investing in expertise

Are you looking to invest in software writing expertise,insurance-focused technology expertise or a company with apre-built framework allowing for the application of your ownexpertise?

All of these types of provider companies exist in the insurancemarket. But a solution that comes from an insurance-focusedtechnology vendor will likely be the one that requires the leastamount of transitional work to make it fit.

A vendor that is investing in insurance-specific R&D may beable to more readily grasp the uniqueness of each insurer'srequirements. Their system will typically have pre-programmedexpertise common to most insurer environments, the flexibility toadjust to unique needs, and the ability to 'organically' improveover time with new releases and upgrades.

Judging capabilities beyond system features

You might be well served by considering the entire IT picture,identifying specific needs, then applying these criteria to theRFP. Once the new system is in place, will the organization be ableto service and support it? A true partner will be able to providenot just a system, but also the services that will be neededbefore, during and after the implementation. A solution providerwho has made investments in the industry will offer proven softwareassets as well as a broad range of services, such as domain-awaretesting, data extraction, configuration capabilities, and more.

You may discover you don't really need a new core system at all,and might be best served by a hosted service offering. Does thevendor under consideration also offer a proven SaaS/Cloudmodel?

Analyzing the maturity and flexibility of the systemoffering

Sure, there is always some insurer willing to be the first toimplement a new solution, but for most insurers the ideal system isproven and mature, offered with the bulk of the functionality thatis needed. 

A proven and mature solution will also have a history of beingregularly modernized with new capabilities, and support of newtechnologies. It is also flexible enough to be "sized" to fit eachinsurer's needs now and "resized" to fit the future. Onceimplemented, the organization should feel like the system wascustom-made, even if it is using a common core system as theframework.

Remember that it's all about you (and yourcompany).

In a day and age where customer-centric focus is the norm, coresystem replacement is a process where it can pay to be a littleselfish for the sake of your organization. Evaluate well and makethe solution fit your unique criteria, and your organization willenjoy the benefits for decades to come.

(Anil Chitale, Senior Vice President, leads theP&C division at MajescoMastek. He was the Co-founder of STG anda principal architect of the STG suite of products. He can bereached via email at [email protected])