Product deployment delays continue to plague life insurers, and there seems to be no end in sight for this painful trend. We consistently see the majority of insurers take longer to rollout new products than they originally planned. There are several underlying causes for these delays including organizational conflict, insufficient resourcing, or inflexible or legacy systems. An informal survey of our networks suggests that, while other factors do play a role, the complexity of the existing system environment is primarily to blame for product rollout obstacles. Here are the top three sources of system complexity and some solutions to help you battle your own challenges.
Source of complexity
System complexity comes from several sources, including:
- The number of systems – When rolling out new products, insurers must deal with the sheer number of systems in need of modification to support the new product. Mergers and acquisitions, too many specialist rather than generalist systems, and failure to decommission legacy systems, all contribute to an increase in the number of systems impacted by new products. This staggering amount of systems contribute to the complexity of the environment and demands extra time for business definition, code changes, and testing.
- Misaligned architecture – Older systems are often complex because they were not designed for the current product environment. Even fantastically designed systems cannot take into account all of the product and market changes that they will face over the decades. As a consequence, many insurers have been forced to create work-arounds, make customizations, or force systems to support products for which they were not designed. For example, today’s insurance companies conduct more product introductions than the creators of older administration systems thought was likely. Hence, the proliferation of plan codes in many older systems for product variations, state variations, and unique distribution channels.
- Poor past decisions – Many insurers have made system decisions in their past which seemed best at the time but failed to maintain the organization’s strategic system direction. Decisions made based on time or cost constraints have forced many IT departments to defer their strategic goals in order to meet some tactical objective, such as a go to market date. When new products are introduced or updated, changes must be made to each system that that product touches, leading to longer release timeframes and an unnecessary amount of work hours. Repeating this process for each new product creates additional complexity that will render a system weak in a short amount of time.
Solutions of complexity
Relieving system complexity can seem daunting, but there are methods to alleviate the negative effects of complexity on new products. If complexity plagues your organization, you should consider taking the following actions:
- Create realistic implementation schedules – As unrealistic dates have added to the complexity problems, deploying products using realistic dates can help to keep new elements of complexity from being introduced. By realistically planning your projects, your teams will be able to properly integrate updates and new products without patchy work-arounds. Furthermore, creating realistic schedules may even provide opportunities to simplify and correct past mistakes. IT departments may find that they can deploy products in a more efficient way, if they are given the appropriate time to invest more strategically, rather than simply meeting a product rollout date any way they can. It will also help develop trust in the project milestone dates that are published.
- Know your risky systems – Understanding where your risks lie is a key factor in being able to mitigate those risks. Evaluating and documenting possible system problems that consistently hinder product rollouts will be invaluable. This will help your product team anticipate challenges and complexities, giving them an opportunity to craft solutions before the project even starts.
- Create repeatable product implementation processes – Document challenge areas, complex systems, and past successes to create repeatability. Knowing what was done correctly, and passing that information on to team members will help foster a positive momentum. Additionally, documentation from post mortems, project planning, and other steps in the process will help incorporate best practices into your organization. You should invest in comprehensive enterprise architecture best practices to effectively manage the needed changes for new products across the IT ecosystem.
- Create a product road map – Too often we see companies that decide to get into the simplified issue, variable, or indexed market seemingly on a whim. Creating a product expansion and innovation road map allows your organization to make a plan and move toward creating a service and system environment that will meet product needs. This allows IT departments to consider where the organization is going rather than focusing only on the immediate product requirement. This will help your organization be more strategic, as well as delivering more efficient product rollouts in the near term.
By addressing the costs and issues of complexity head on, you will make your product implementations smoother, and more likely to be on time and on budget. Leveraging these strategies will help you generate positive outcomes when it comes to your product deployments and help you discover your unique system complexity antidote.