According to a 2014 Gartner survey, only 42% of legacy modernization initiatives at life and P&C insurers meet the original budget, and 82% take longer than expected. Is there a way of improving this dismal batting average?

Absolutely! Years of experience suggest there are five key principles that can dramatically increase your chances of on-time, on-budget legacy IT upgrades.

1. Secure boardroom buy-in

The new system implementation process must start in the boardroom. Why? Because it is essential that the system support overall business strategy. What is the business trying to achieve in the short, medium and long terms? What is the business case for why IT system transformation is needed, and how it supports overall strategy? What does success look like? Without an unequivocal and universally held mandate from the C-suite, the business case will flop and/or the program will falter.

2. Garner stakeholder buy-in through involvement

Nothing derails a project faster than a user community that is not behind the transformation. Successful implementation relies on both people and systems. All relevant department heads should be consulted, different user types and their requirements defined, and the benefits and impact of change clearly identified. Identify the skills you need to succeed, and map where they lie within your organization. By getting the right people and skills on board, you can create a capable and dedicated 'A-team' to facilitate a successful implementation.

3. Be flexible

System implementations don't happen in a vacuum. Changes in the market and your business will occur during the course of the process. You must be prepared for circumstances and the environment around you to change. Any project, like your business, should be flexible. The key to ensuring progress is to build agility into your planning processes. Before you begin, document current processes and map them to the new requirements. Identify gaps and incorporate process change as required. It may be necessary to accommodate some scope creep to win the 'hearts and minds' of your people, but make sure it doesn't detract from your ultimate ROI.

4. Develop a system integration/migration strategy early

Data from legacy systems will need to be accurately transferred, and a robust data migration/integration strategy is a vital element of any system implementation. Think of new system implementation as an iterative process. The general rule is that 80% of your data–generally the simpler or more standard records–will map across automatically with little need for human intervention. Roughly 20% of your data–the more complex or customized information–will require a more hands-on approach.

However, data migration no longer has to be the Achilles heel it once was. Insurers can employ a data migration tool to identify and separate the simple from the complex data, and put the hard to handle data in the hands of a technical data analyst. This expert will help avoid the need for hard-coding one-off 'fix' solutions to engineer data into its new home.

5. Measure and report ROI

ROI and outcomes achieved should be tracked back to the business case as a regular exercise. CIO's should report on the activities which support, run, grow and transform the business, linked with the business objectives first identified. Should these objectives not link or become outdated, revisit the business case and work out what processes need to be put in place to achieve them. By monitoring ROI and making necessary adjustments, you can help build the case for future projects. As positive outcomes are clearly demonstrated, you will reinforce why periodic system transformation is a worthwhile exercise.

Adherence to these five principles won't guarantee on-time, on-budget results every time, but they will improve your implementation process and ROI success significantly. What do you think?

Special Reports /

The 5 keys to a successful legacy IT upgrade

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