Core system transformation — such as replacing policy, claims or billing systems — is a bit of a misnomer because teams end up building projects backward and as a result, take too long and cost too much. Most importantly, insurers lose some of the benefits of moving to the new system(s) because the team has spent too much time in the past instead of looking toward the future.

Current 'Agile' approach

Core system replacement is often undertaken with a systems integration (SI) partner with experience in the selected software package. As such, there are important commercial constructs. One way to structure this is to define the scope of work during contract negotiations. The frame of reference is the carrier's perceptions of need paired with the SI partner's perception about how the software meets those needs (or not). Sometimes, the software vendor is part of the discussion, especially in those cases when they are the SI partner.

From there, high-level Agile sprint plans are created, which fill the gap between what the carrier believes they need and what the SI partner believes the selected software package can deliver. This process is sometimes referred to as "as-is" compared to "to-be." Also included in this plan are data migration and integration plans; these workstreams are critically important, and you must sequence them correctly, but functional requirements can often overshadow them.