Legacy Modernization and Lipstick on a Pig

One of the most common phrases uttered at last week’s Insurance Accounting and Systems Association (IASA) show was “legacy modernization.”  It was the central topic in many of the educational sessions and a common talking point on the trade show floor.

But what was missing from these conversations was recognition that modernizing an IT system without rethinking the way your organization gets work done is only a few steps above “putting lipstick on a pig.”

For example, some vendors touted their built-in “workflow management” capabilities for adding great flexibility, but that flexibility exists only within the confines of their software which is distinct and separate from all other applications in use.  What they add does nothing to break down the silos that prevent good information flow.   Yes, their software is more modern, but is it really that much better?

The whole insurance community is missing an opportunity to dramatically improve their processes and performance.  Carriers today have lost pricing power to buyers who can compare quotes with a click of a mouse.  Better execution of processes, enabled by social communication provided in context, may be the only path to regaining pricing power and improving profitability.  To this end, I challenge everyone in insurance IT to retrain their thinking from “legacy modernization” to “work social.”

Here’s what I mean by that.  Ask any insurance company C-level executive what they want and I’m sure you’ll hear responses like these:

  • Improve customer satisfaction
  • Stop claims and underwriting “leakage”
  • Settle claims faster
  • Make us the #1 choice for independent agents

Here’s what’s common about these types of goals:

  • They usually can’t be owned entirely by any one department
  • Achieving them requires communication across different functional organizations
  • Significant success has proven to be elusive

So what’s holding insurers back from achieving these goals?  Legacy IT systems are frequently cited as a major problem.  But without changing the structure of work, legacy modernization will only lead to incremental improvements.  To achieve a quantum leap in performance over the competition, insurers need their IT systems to directly address the challenges that have held them back.

Here are the three things every insurance C-level executive should ask before approving any new IT project:

  • Will it bring processes under control or improve existing controls?
  • Will it break down silos and facilitate rapid communication across groups and departments?
  • Can it be changed quickly in response to market conditions or internal improvements?

Some companies are attempting to achieve these goals by adopting stand-alone social business software.  While these packages offer the possibility of improved communication, the big question is when do you use them and what do you use them for?  If they are not intimately tied to our work, they are just another disconnected collaboration stream like e-mail.  Where is the social advantage?

What’s missing from social business software is context.  People will collaborate to great effect when they are presented with events that stem from work processes in an environment that allows for rapid, shared communication.  For example, an alert of a claim rejection for a high value customer seen simultaneously by the head of the business unit, his staff, and the independent agent who brought in the customer will spur action and shorten response time, reducing the chance of customer defection.

Stand-alone social business software can’t do this because it doesn’t have process context.  Off-the-shelf insurance applications with integrated Twitter feeds don’t foster the right kind of social collaboration.  But a modern business process management software suite with integrated mobile and social capabilities like Appian has context and can facilitate quantum leap breakthroughs.

Here’s just one example of how this capability can change the insurance business.  With Appian’s BPM, a carrier could easily build a software process for their independent agents to take an application while sitting in front of a prospective customer.  Before they leave the meeting, the application has been submitted to the carrier and assigned to a specific underwriter based on pre-set rules.  A post to the social interface notifies the agent which underwriter has been assigned and makes immediate direct communication possible.  The agent adds a comment about a unique aspects of the customer’s business which should justify a better than standard rating.  The agent is happy because they are immediately communicating with a specific underwriter and know they have a much better chance of coming up with a winning quote.  If the agent or carrier recognizes a way to improve this process, it can be quickly implemented by the carrier with no wait for an upgrade by a software vendor.  Who do you think this agent’s favorite carrier is now?

More and more insurers are recognizing the value in rethinking work and rebuilding their applications on BPM.  They see the benefits of “work social” and want all their applications running on the same BPM platform so social communication can be tied to processes broadly.  They are making quick strides by simultaneously using Appian to add mobile and social interfaces to applications that are working well and rebuilding others from the ground up in our BPM platform.

Want to join them?  We’d love to show you how.

Evan McDonnell

Vice President of Solutions