7 Strategies for a Successful Core System Transformation

If you are staring down the barrel of a core system replacement project and it has you feeling a little uncomfortable in your work-from-home desk, take a deep breath and relax. While core system transformation projects are complex, they are manageable when the right parameters are in place. 

Core replacement projects become necessary for a variety of reasons. Many medical professional liability (MPL) insurers have kept legacy systems running through quick fixes, homegrown workarounds and focused solutions. However, the pain caused by these legacy systems is growing, as they inhibit organizational efficiency, effectiveness and flexibility. If your organization has decided to embark upon a core system transformation project, keep these seven strategies in mind.  

These steps are designed to help get your project off to a smooth start and keep it running well if you encounter challenges along the way. While core system replacement projects are complicated, time intensive, and require substantial financial investment, they can be successfully completed on time and on budget. 

Step #1: Build a project team 

Well before the project begins, start thinking about whether you have the resources available internally or will need to hire to build a project team. If you select internal team members, make sure the team has time carved out from their day-to-day jobs to focus on the project; backfill and don’t expect your team to simply make time for the project—that is a recipe for disaster, burnout, turnover, and project delays. 

Step #2: Embrace change 

Out with the old, in with the new. Set the stage internally that the project will bring change to the organization and business processes. You will not be rebuilding your old system, but rather using the new system the way it was designed to complete your work.   

The collective focus should be on the business need and desired outcome as opposed to trying to get back to “the way we have always done it.” Project managers may find it challenging to get team members to break out of their old routines, so investing early in change management to get that message across is key. 

Step #3: Configure don’t customize 

Customizing introduces risk, project delays, and complexity. That means customization should be saved for must haves and make sure there is governance around how customizations can be approved.  Project leads and key business stakeholders must have approval power over customization requests before the request hits your policy admin vendor.  

Configuration, on the other hand, allows you to leverage existing core system functionality to maintain the configuration in-house moving forward. Positioning your organization to maintain your own configuration allows you to reduce your ongoing support costs and diminish your dependency on vendor resource availability and cycles. 

Step #4: Facilitate agile product delivery 

Big gaps of time between project deliverables lead to surprises, misunderstanding, and rework. Get both teams together on a regular basis to review progress, provide feedback, make sure requirements are understood, and the deliverables are on track. This keeps your vendor transparent, your project team engaged, and limits the chance that a major milestone misses the mark. 

Step #5: Calibrate your data conversion strategy 

There are many ways to approach a data conversion—it doesn’t have to be a big-bang conversion where all data from all previous years is converted over a single weekend. You certainly can choose that approach, but there are alternatives.

Leveraging a data warehouse, converting on renewal, or manually converting data are all approaches that can be considered based on your situation. Whatever the approach, it’s not uncommon for conversions to be the most challenging part of the project.

In the case of a big-bang conversion, you are mapping data from your old data structure to a new one, but the new one isn’t immediately available-–not until the product configuration is well underway. This nearly guarantees your conversion will be the critical path of the project. 

Lastly, the quality of your legacy data determines if you need to clean things up before converting, how much money to set aside, and how much risk the conversion brings to your project timelines.  Speaking of risks . . .  

Step #6: Create transparency around project risks 

Core system replacement projects are not easy! They have inherent risks as they are long, challenging, and complicated projects.   

The longer the implementation, the more risk involved. Acknowledge risks up front, prepare a strategy to mitigate the risks and measure your progress regularly to see how you are performing.  Bad news doesn’t get better with age; make sure there is a mechanism in place to talk about project risks openly, honestly, and regularly with key project stakeholders. 

Step #7: Celebrate milestones 

You’ve heard people say, “The team that plays together, stays together” right? This is also true for core system replacement projects. 

Build comradery early in the project, as early as you can. It doesn’t have to be fancy or expensive, just make it interactive, inclusive and focus on getting the teams to get to know one another in a non-work environment.   

There is no doubt that core system replacement projects are stressful and can include difficult moments—no conversion ever runs perfectly 100% of the time. But if your teams have built personal relationships, they will be well positioned to handle anything that comes their way without pointing fingers. Over time, core conversion projects truly become a single cohesive team effort. 

Like most things in life, if there was a short cut to executing a successful core system replacement project, everyone would be taking it. No matter what approach you take, you are in for some hard work, some surprises, and some difficult choices.  If you can apply these seven key strategies, you are likely to have a much better chance at having a successful core system replacement project to deliver to your company.

Casey Kretz is President and CEO, Insurance Systems Inc.