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Modern Technologies and Legacy Systems

In the world of core P&C systems the most common approach to modernization has historically been the 'big bang' replacement.

By Dan Sobotincic | Updated on July 25, 2010
In the world of core P&C systems the most common approach to modernization has historically been the ‘big bang’ replacement. The goal was to replace the entire legacy system in one aggressive move and one large project in the hopes of solving all of the legacy woes. While the intentions were good, the results weren’t always as expected. The gap between the objective and reality has too often left the project in ruins and sponsors licking their wounds.

Similar to the young, green behind the ears, hot-shot professional on the fast track to replace the seasoned veteran, a major drawback of the big bang implementation mindset is underestimation of the number of years of knowledge and process nuances that have been built into the incumbent system. For example, the exception to the rule that is typically specific to a jurisdiction and data combination is often not even considered during the new system implementation since the exception was identified and implemented long ago, most likely never documented, and forgotten over time. Multiply the one exception to the rule by years of exceptions and the legacy replacement project just got a lot more complicated.

The new system that was selected to provide the company the flexibility to compete in the new insurance world often doesn’t even get out of the starting blocks. While the system may promise ultimate flexibility to quickly implement any rule, it typically lacks the real world education and the system equivalent to street smarts to know just what those rules should be. The years of knowledge, rules, and exceptions built into the existing legacy system need to somehow make the transition from the old to the new in order for the project to be successful.

Rather than the big bang, once and done approach, any core system replacement should be a controlled migration with a well thought out transfer of knowledge from the old to the new. And as insurers move more of their corporate knowledge and management to automated systems, the ability to preserve and share that knowledge between IT solutions becomes even more critical.

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