Digital acceleration and the problem of legacy

Tech innovation features prominently on many insurers’ 2021 strategic agendas, and it’s no wonder why. When Covid-19 emerged as an unrivalled disrupter in Q1 2020, insurers pivoted to remote working, increasing their reliance on virtual interactions and digital solutions in unprecedented numbers.

But insurers’ drive to digital started years ago, focused on improving the client experience and achieving operational efficiency. One of the challenges insures have faced in embracing digital is legacy apps. The tech is often too old to integrate with digital solutions, or prohibitively expensive. This has led to digital enablement featuring strongly in the ‘business case’ for replacing legacy systems.

Yet, making a clean break from legacy apps is, well, messy. The intention is to move away from the old platform quickly. The reality is that decommissioning often faces obstacles and delays. We can all think of a system in our organisationslated to be replaced one, five, 10 years ago, that is still in use today. As digital apps and modern core systems have come to the fore, legacy platforms have not disappeared. In many cases, they’ve remained lurking in the background like shadow systems, growing technical debt and draining resources. It’s worth pointing out this has little to do with IT, who could switch off an app with minimal work but at the expense of business users.

Challenges for app decommissioning include bad planning and poor or incomplete data migration. In the next section, I’ll focus on an important issue which get less attention – the culture of ownership.

The clue is in the name

Retirement of legacy apps is the least sexy part of system replacement, but unavoidable for project success. Often, decommissioning doesn’t feature prominently in the project scope. Not enough time is spent understanding the current processes underpinning the incumbent system, the users or the outputs. If functionality and capabilities of the replacing app do not align with what users do or need, the ease and convenience of old systems will be a siren’s call. Overt or covert resistance, and inability to make the mental shift from old to new, have thwarted a fair share of system replacements.

"Challenges for app decommissioning include lousy planning and inadequate or incomplete data migration"

Avoid pitfalls by planning what will migrate to the new system in parallel with how the complementary attribute will be turned off in the old. Do this early and seek a broad range of impacted stake holder input. This includes the people doing the work, and the people depending on the output of the work. Timelines that set out how and when the decommissioning of the legacy application will occur, component by component, are as important as the implementation schedule of the new solution. Giving product owners more accountability for the migration turns their role from passive to active. The responsibility shifts from a transient project team to those inheriting the future solution, or problems.

Managing operating costs has never been more important, and retiring legacy applications is low hanging fruit with big bang-for-buck. It can have a fast and direct positive impact on the expense ratio, reducing run costs, maintenance expenses and SME investment. The digital agendas of tomorrow will mean more new tech for insurers. With a proactive plan and the right people owning app decommissioning, the retirement of legacy platforms can reduce costs and result in meaningful efficiencies for organisations.