When Legacy is a Good Thing

Ask a person about the legacy they want to leave, and the conversation will turn reflective and sincere.  They may tell you about their commitment to making sure that their work is solid, delivered with integrity, and enduring. 

They'll talk about the responsibility they feel to the people they care about, from the strangers that their work touches to loved ones who rely on them. They'll talk about pride, thoughtfulness, and planning.  A legacy is a deep and grand endeavor that is built over time—something that can take a lifetime, something not accomplished in a year or even a decade.  In this context, a legacy is something to strive for.

In a field like technology, time has become synonymous with diminished value—and “legacy” has become as distained as a four-letter word.  A technology generation may be no more than a few years, with obsolescence just a version or two away.  The past no longer refers to a time long ago, but the time when the last big idea was popular.  According to the EPA, in 2009 over 4.7 billion pounds of electronics were thrown away.  When a person's cell phone is considered old in just two years, it's easy to understand why insurance software that's been around for much longer than that can be labeled with a bad name.

Unfortunately, “legacy software” has come to refer to any software that is old, whether old in perception or reality.  The term can evoke images of DOS screens, dot matrix printers, and batch processing.  It infers to insurance business leaders that the systems they have in place are inflexible and may be expensive to support.  However, replacement has been challenging due to the intimidating cost, risk to the business, or work effort and time involved.  For an IT department, legacy software can mean hours spent exception programming and developing technology workarounds to overcome limitations.  For the end user, older systems may be painfully slow or unable to support the desired work process. 

In the insurance industry, core processing systems are often referred to as legacy software because many haven't been replaced since they were installed in the 1980 or 1990s. Policy administration system replacement is a daunting process that many carriers have been undertaking in the last decade, but which has become even more pressing in the 2010s as new technology introduction continues to accelerate.  Carriers have to respond to the expectations of both customers and potential customers, not to mention employees and distribution channels, with greater speed and flexibility.  To do so, they need to have modern software at their fingertips.

While legacy in terms of software typically translates to a negative, legacy when describing a software vendor may, in fact, be a good thing and a vendor attribute to search for when considering new solutions.

Unfortunately, some policy administration vendors have been labeled with the same ill-meaning “legacy” term simply because of their longevity in the industry, without taking into consideration how modern their software may actually be.  In fact, just like an insurance company, an insurance software vendor that's been around for more than a few years brings with it experience and reliability that the new player on the block doesn't.  And, when an insurance company with a legacy to protect is evaluating insurance software vendors, they may want to look at technology and solution providers that have been around long enough to actually have a legacy.

Sure, there's always that exception to the rule and the carrier buyer who is willing to take a risk on the new and unproven software vendor and their respective unproven solution.  But, let's face it, insurance is a business of mitigating risk and the majority of the insurance carriers are looking to minimize the risk when it comes to technology and software investments.

Just as the majority of people wouldn't hire a newly licensed builder to build their dream house, most insurance carriers will want to protect their infrastructure by looking at software vendors with a track record of success. First, a vendor should have a substantial number of legitimate implementations under its belt, and customers who will share how their implementations went and how the software has performed year after year.  Second, core processing software must have rich and proven functionality that can only come from having been used over a long period of time and improved by carriers in partnership with the vendor.  Third, any software that integral to the business should come to the table with a great deal of content already established.

Like a house, no two software implementation projects are the same. An experienced vendor with a good legacy approaches its projects on a case-by-case basis, adjusting the project and the deliverable as needed. And when a project doesn't go as planned—often the case in implementations as complex as insurance core systems—that vendor does what it takes to get the jobdone because it has a reputation to protect and a client commitment to fulfill.

An insurance company that has spent decades developing its business has gotten to know its marketplace, territory, and demographic in a deep and intricate way that a newcomer to any of those areas cannot. Any customer approaching a reputable carrier does so with the expectation that that interaction will mean a quality customer experience through both service and product. The same holds true for a software vendor who is going to be successful for the long term.  They must have both a legacy of satisfied customers and positive impact on their businesses, as well as consistent innovation and improvement to its services and products to ensure they stay at the forefront of technology.

The mislabeling of all core processing systems in the insurance industry that may be more than a few years old as “legacy” does a disservice not only to the software vendor, but also to the insurance carrier looking to replace or enhance a vital system.  The dream software and technology is much like the dream house mentioned earlier.  In the end, it's the foundation and structure of the house that makes it a viable home for the long term, not the shiny new fixtures.  And when choosing the right software vendor, like choosing the right home builder, a good legacy may very well be a key decision criterion.