Part III: Insurers Focus on Legacy Modernization
So… maybe replacement isn’t the answer, but what is? Should you build something new in house or maybe even buy a component and scale out when needed? Both are viable options that several insurers have chosen, but have different benefits and risks to consider.
Option 1: Build a Solution
Business Control: When you build a solution internally, you have complete control to match your organization’s exact processes and expectations.
Data Control: An internally-built solution also guarantees strict control over your data and corporate intelligence as it existed in the past and going forward.
Time Intensive: Like any other major IT project, building a solution yourself will take a lot of time, but for this undertaking you will be responsible for every last detail.
Staffing: Meeting minimum staffing requirements can be a problem for many insurers who opt to build their own solution – after all, if it’s difficult to find enough people to maintain existing technology, it may be impossible to dedicate enough people to build a new solution.
Cost: Although you have internal control of every element, this can sometimes overcomplicate needs and requirements, which drives up cost.
Option 2: Buy a Component and Scale
Potentially Inexpensive: Depending on the scope and severity of your most urgent problem, buying a component could be inexpensive in the short-term.
Quick Fix: Also depending on the issue at hand, you may have a solution to a simple problem up and running in weeks instead of months or years.
Scalability: Depending on what product and vendor you select, future growth and integrations may be severely limited – if at all possible.
Increase Silos: If every department is permitted to purchase a product to solve their most immediate needs, an organization may wind up with a bunch of point solutions that can neither accommodate growth nor interface with each other.
Potential Extensive Coding: Assuming the goal is to not only solve an immediate business need, but to reduce the data from existing legacy systems, the necessary interfaces are often built as one-offs and require extensive custom development and testing.
Performance Issues: If an insurer relies on its ability to weave together a collection of unrelated solutions, performance troubles are ultimately going to surface. With multiple products and solutions from multiple vendors, it is likely that the ultimate system will not result in a trusted, high-performing enterprise solution.
So if these options aren’t the right fit, what is? Next week I’ll share the answer in the fourth and final piece of this series on legacy modernization for insurers. Stay tuned…