Enhancing Your Legacy

Q: What are the pros and cons of legacy migration? Why is it a good alternative to a "rip and replace" approach?

A: Dick Simon, AMC Insurance: Legacy migration allows some reduction in the conversion problems associated with rip and replace. Change can be better managed, current data integrity can be more easily assured, the use of current staff and its knowledge can be maximized, and lower initial costs can be realized. However, integration issues can be more complex, acquisition of full state-of-the-art functionality may take longer to achieve and the long-term cost might be greater.

A: Marc Cicere, Forrester Research: Many migrations consist of extracting business logic from mainframes - this can be done incrementally, allowing the mainframe to do what it does well and exploit new options in Web services. A migration allows a carrier to incrementally choose external services as needed. Rip and replace is high-risk, requires hard-to-find project management and technical skills, and usually doesn't result in the near-term benefits that can be used to justify funding the project.

A: Don Goodenow, Fiserv Insurance Solutions: The pros are that you can achieve many of your IT objectives without wholesale disruption of current processes, existing data files are left undisturbed, conversion concerns are minimized and initial cost is reduced. The primary con is the complexity an organization must manage when integrating legacy systems with new components written in different languages and operating on different platforms. Legacy migration is a good alternative if elements of current systems will provide acceptable processing capabilities for a few years, or as part of a phased system replacement.

A: Jeff Hughes, Partner, DiamondCluster: Migration of existing legacy systems generally allows companies to bypass the thorny issues of migrating customer information and mapping them to new data models while still improving functionality. However, not replacing legacy platforms generally limits the benefits that might be achieved from new technical capabilities, process improvements and other secondary effects.

Q: What steps should insurers follow to initiate a legacy migration project? How should carriers evaluate and select legacy migration solutions and partners?

A: Simon, AMC Insurance: The first step is to know where you are going and what you want. Without that, a migration effort can wander. The steps to be taken are: Define organizational needs, both today and for the next three to five years; determine the current system's capability to meet these needs; identify options for migrating specific functions to new modules interfaced with the current system; and determine vendors' expertise in your business and their qualifications and ability to deliver the required component modules, including their ability to assist in any conversion effort.

A: Goodenow, Fiserv Insurance Solutions: Identify strategic needs, then tactical needs. After documenting needs, see what's available, but be careful developing the request for proposal. Be specific about requirements, but don't be overly specific in how things must be done. Detail specificity assumes you know all of the available options, and you probably don't. As for vendor criteria, consider insurance business experience, technical expertise, financial strength and customer recommendations as important indicators of success. Go with one that isn't just selling software.

A: Hughes, DiamondCluster: Build a business case. Legacy platforms, though generally restrictive, oftentimes have been optimized such that the business case cannot be made purely upon reducing operational costs. However, the length of time to implement simple changes - and the restrictions this places upon new product introduction or even accommodating regulatory constraints - generally provides measures that resonate with business clients that must fund the transformation. Any solution should be able to illustrate how cycle times from innovation to market distribution are reduced, and this should be built into the initial business case for making the change.

Q: What are the challenges of pursuing a legacy migration project? How can insurers address these challenges?

A: Simon, AMC Insurance: You must identify additional hardware and software needed to support any new processing modules, and any staff training or additions that will be needed, and budget for them. But the primary challenges are not necessarily system-related. The challenges are: to resist the impulse to reinvent the current system; prepare the staff for an extended period of change; make the user personnel understand the amount of work they will have to do to successfully implement the changes; identify and begin the training/retraining of current staff; and add new staff with different skills, if needed.

A: Cicere, Forrester Research: The biggest challenges include data migration. The primary problem with this is the need for business analysts for data validation, mapping, etc. Another challenge is managing services vendors. Other challenges are business participation, particularly around data, and scope creep, when a project starts out as a system replacement and ends up as a business transformation.

A: Goodenow, Fiserv Insurance Solutions: First, position the organization to embrace and support the changes being made. Second, understand how the changes impact the operational infrastructure. Third, recognize that things will go wrong - glitches will occur.

A: Hughes, DiamondCluster: One underestimated challenge is the degree to which arcane rules and procedures have been codified into legacy platforms. Complicating matters is the fact that business segments will want these procedures replicated in the new platform to accommodate their local business practices even when they do not align with new processes. IT areas need to secure involvement from business units early in the process, not only to ensure proper development of requirements, but to address conflicts as they arise.

Q: How can insurers guarantee that new systems are designed for the future?

A: Simon, AMC Insurance: Design flexibility into the system - make sure the system can integrate with the latest technology. Resist the urge to develop enhancements in the technology the current staff knows, unless that technology is what you think you will be using and building upon in the next few years. Also, implement components that are user-configurable, requiring fewer programmers to maintain. Finally, constantly monitor functionality and performance, rather than waiting until it's outdated - plan to replace or enhance before the need arises.

A: Goodenow, Fiserv Insurance Solutions: After the new system is installed, changes will be needed. The design and implementation of these changes must be managed so that, as much as possible, they are modular, configurable, reusable in structure and built in a manner that makes the best use of any new technologies you installed. To make sure the migrated system (or any system) is designed for the future, think where the needs will be, not where they are today. If your goal is to solve today's problems, that's all you'll accomplish.

A: Hughes, DiamondCluster: Given the effort to evolve these platforms, companies should be realistic and assume these systems will survive 10 or 15 years. At a minimum, the architecture should support externalized and easily accessible rules repositories, highly modular construction where services are separated and interchangeable, and enforcement of consistency across all areas interfacing with the system.

The Experts: Legacy Migration

Dick Simon
VP of Operations
AMC Insurance
(Conway, Ark.)

Don Goodenow
Director, Product Management
Fiserv Insurance Solutions
(Brookfield, Wis.)

Marc Cicere
VP, Principal Analyst
Forrester Research
(Cambridge, Mass.)

Jeff Hughes
Partner
DiamondCluster
(Chicago)

Peggy Bresnick Kendler has been a writer for 30 years. She has worked as an editor, publicist and school district technology coordinator. During the past decade, Bresnick Kendler has worked for UBM TechWeb on special financialservices technology-centered ... View Full Bio