Whenever I can, I ask CIOs and program leaders what vision drives their enterprise core system replacement project. Not surprisingly, the answers are almost always vague, internally focused and stated in actions rather than outcomes.
Startups that are working to deliver new capabilities to disrupt, extend or expand the insurance industry start with a vision. HISCOX and FIGO insurance are P&C examples of new companies with specific visions of customer experience that have entered and succeeded in both crowded and new markets. Carriers can use this same thinking to inject that kind of drive and creative energy into their projects. Some skeptics dismiss vision statements as unimportant and liken them to company mission statements that are posted on a wall but not institutionalized. This contradicts research done by Steve McConnell which directly measured the correlation between well understood vision statements and success criteria with the predicted success of a project. Mr. McConnell recognized that that vision statements and success criteria helped to establish alignment, energize the team, and drive scope decisions.
What should your vision statement be? This is an age when trade publications talk about being consumer focused. That is not a new concept. In the early 1990s Peter Lewis, then CEO of Progressive, told his management team he wanted to delight his customers and claimants with a new approach to claims settlement. He was passionate in communicating and debating this intent. His ideas were met with skepticism by some very smart people. Ultimately, his vision drove years of innovation, IT investment, reduction in cycle times, and significantly contributed to the brand image.
Most vision statements I have heard talk about internal change. Straight through processing usually focuses on reduction in handoffs between Agents, CSRs and underwriters via rules engines. Establishing a vision of customer experience leads to leveraging outside data sources. Compare that to Suncorp’s recently announced partnership with Trov to reinvent insurance for the mobile generation by itemizing and valuing personal property via the phone outside of their systems as part of their homeowners underwriting process. IT driven projects often discuss replacing legacy systems with modern technologies that are responsive to change. I agree that core systems replacements do in fact accomplish this, but is this motivating and does it reflect the future state? In fact, the very fact that we generically call them “core system replacements” reinforces the thinking I am trying to prevent.
Vision statements that suggest business transformation do a much better job of predicting the magnitude of change and overall impact. I often ask if a project is meant to be a platform replacement or business transformation project. But is that enough? The organization needs to have a clear understanding of that expectation to guide scope decisions. A statement of intent to transform the business does not suggest the future state that is desired nor the customer impact. Insurers that offer programs or market to affinity groups need to think of how to add value and engage their targeted community.
One of the most important things companies can do to get ready for core system replacement is to define the future state of each business process. Doing this during the project often unnecessarily delays decision making and ultimately the project. A clear statement of overall vision can expedite this and guide the program owner. Vision statements also need to be bolder and look further out into the future. Too often companies focus on addressing current, internal pain points rather than looking out to establish the competitive capabilities needed three to five years from now. Leaders should not be lulled into complacency when establishing targets or goals. The industry is evolving too quickly for sequential tactical projects to close gaps.
If you asked the leaders of your cores systems replacement program to succinctly state the vision for your program, would their answers be:
- Stated in business terms?
- Stated from a customer perspective?
- Helpful to define the future state?
If the answers to any of these questions are no, your project is at a much higher risk of failing to deliver the expected benefits of the new system capabilities than you may think. An interesting team building exercise that can help define and clarify the vision driving a core system replacement project is to have the team design a box which represents the new system. Think of a leading consumer products company designing the packaging for a new and improved version of a cleaning. On one side, you list the benefits of the new system in customer terms. This needs to be at a high enough level to fit on the box, but powerful enough to attract a customer. On the other side of the box, you need to list the specific features that will be delivered by the new system in terms. You do not need to list of the core system features, you highlight the additional features that justify the project. Many teams establish a name for their projects but not a shared vision. This exercise goes a long way in creating the sound bites needed for communication meetings and to help focus the delivery team on critical functionality.
Vision statements and related success criteria significantly increase the success of core system replacement projects. Do you have one? How well is it understood? Is it accepted by the team and by the company or dismissed as unrealistic. These questions should be asked by the people responsible for driving organizational change related to the program. It the answers are no, we recommend CIOs address this at the governance level within their organization.
This blog has been reprinted with permission from Novarica.
The opinions expressed in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access