You know your legacy IT system is rapidly becoming obsolescent at the same time as stiff competition and disruptive forces demand you play a new game with new rules.
Even that platform you invested in 5 years ago is proving a barrier to change. Fine for Auto but just too expensive and inflexible for Home. Organisations must remain focused on creating a competitive edge which must be honed by a laser-like focus on the customer.
“Today’s technology platforms are not just new versions of legacy systems. They allow you to design a completely new digital enterprise — if you follow these guidelines”
Leon Cooper and Milan Vyas in “strategy and business” Feb 21st, 2019
1) Put Customer Value First
Your key IT goal is delivering value e.g. better UX, effective & faster customer journey, higher NPS, collapse claims costs. You must be able to point to and demonstrate key metrics.
Test your own goals at " Are your digital claims goals ambitious enough?"
Cross-functional teams including claims handlers, business analysts, fraud, underwriting, HR and change management, new digital & transformation officers must plan and design this modernisation effort which requires having an agile “sandbox” environment to design and test changes around coordinated goals.
Questions for putting customer value first:
- Why must we enhance/transform our technology now?
- What problems are we solving?
- How will solving these add value to our customers?
2) Simplify your Architecture
It is not unusual to be reliant on core systems of record 10 years old ,and often 15 or 25 years, forming a complex network of inflexible technologies patched together with sticking-tape.
Modern modular platforms have changed that but even many of these have turned out as complex leviathans whereas digitally transforming platforms feature APIs to allow inter-operable components to be added, or discarded, at will.
Data can be shared across the whole enterprise. Cooper & Vyas state “Instead of assuming a trade-off between simplicity and the features you need look for platforms that give you both”.
Questions for simplifying your architecture
- How can we optimise & simplify our technology systems environment?
- Where is the modularity today? Is it flexible enough for future needs?
- What data and functionality must be accessible by customers, business & supply chain partners and operations?
3) Design for Flexibility and Speed.
Legacy systems structures and processes hold the organisation back when it needs to change its focus. They cannot accommodate a wide range of “plug-and-play” functions. Develop your capabilities and adopt platforms for the deployment of future-ready IT that can flex as needed for innovation.
Questions for designing with flexibility and speed:
- What aspects of our current systems are constraining our speed with respect to change?
- Are they necessary? Are there better ways to change direction whilst managing risks?
- What kinds of unexpected changes must we anticipate with modernised platforms?
4) Engage with your Workforce and Culture
“Culture eats strategy for breakfast “is a tenet of business. You must align new systems with the company’s culture. You may have to change culture which will take time- do you have that time? There is a wealth of experience on what customers need to help identify the gap between that and your offering on your customer frontline. E.g.
- Claims Team
- Customer Service
- The multiple touch-points between the enterprise and customers.
- White papers from consultants, technology partners, trade press
Use this evidence to help plan IT strategy. Provide a strong mandate for simplification and delivering value. Communicate it consistently. Rally teams around a common set of priorities, decisions and behaviours.
Questions for engaging your workforce and culture
- What do people need from new IT platforms to be productive and effective? How do you know?
- How technologically savvy is our existing workforce? What new skills do we require?
- What kind of cultural change needs to occur and how to we create this?
5) Adopt a Services Mind-Set
Treat technology as a set of services the enterprise can consume and integrate as needed. Adopt platforms that can integrate services from a range of “best-in-class” providers. You should not have to care about the source of a service but rather how well it serves your needs and creates customer value. Know how your investment help you become the type of supplier your customers and business partners need.
Questions for adopting a services mind-set
- What are the essential technology services we must provide the organisation?
- Are we organised and funded according to desired outcomes?
- What new services should we offer to be a market leader?
6) Plot the journey before starting
Iconic companies achieve success through a fully coherent and differentiated strategic identity. Think Apple, Amazon, Uber, Netflix and IKEA. They can explain this identity and strategies so customers, business partners and employees can understand them. No more meaningless Bla Bla phrases but inspiring strategic statements. Then develop the capabilities and business models to deliver the vision and achieve the transformation. It is a journey of twists and turns so inculcate a culture of "fail fast fail often" if you learn along the way.
Questions for plotting the journey
- What are the critical steps to migrate to the new system?
- Who will be bring together to achieve these?
- How will we handle the plan when things don’t go as expected?
- How will we encourage failure that we learn from fast?
7) Organise by Capabilities
You cannot do everything at once. Looking down from the heights of The Shard in London I observed the shining brand-new London Bridge Station- one of the busiest in the world. The trick of transforming London Bridge was keeping passengers and staff moving even as the whole station and systems were completely rebuilt.
Your most distinctive capabilities are the combinations of people & skills, systems, processes and functions that deliver customer value in a way that no other enterprise can. Make your systems modernisation the opportunity to dramatically improve those capabilities.
Don’t worry about all the different layers of the technology stack. They are ALL IN SCOPE. Accelerate digital transformation by applying principles like mobile access, customer self-service, micro-services, API-based design, cloud-based infrastructure and modular IT.
Questions for organising by capabilities
- What are the most critical capabilities that differentiate our company and provide value?
- How will out IT modernisation enhance these capabilities?
- What technology solutions and partners are a best-fit to achieve our vision?
8) Be Agile and User-Centric
Divide the modernisation plan into discrete delivery increments. Deliver a minimal viable product faster rather than a bloated product too late. Apply iterative development and junk the waterfall approach beloved of IT project management.
Use agile frameworks to design and develop. Avoid plans that predict detailed functionality more than a few weeks out. If it is that detailed and precise it will not be innovative and future-proof. It will just be a “faster horse”.
Remain user-centric i.e. responsive to customer and employee responses.
Questions for taking an agile and user-centric approach.
- Who will benefit most and how are they engaged in the modernisation approach?
- How do our analytics improve our knowledge of their experiences?
- How do we pivot when feedback tells us we must?
9) Invest in Resources that make Change stick.
You need the depth, breadth and diversity of resources for success. Choose people with a strong bias for change, will and ability to learn, ability to face uncertainty and complexity and a strong collaborative streak.
Make sure you are not locked into a single vendor. Insist on a practical API architecture so you can connect and migrate to other systems. Make sure you can link, access, join and analyse multiple and disparate data sources.
Plan for funding to decommission and retire the old system whilst at the same time seeking new platforms that mean you can do that at a time convenient for operational and financial goals. Beware of vendors that insist you must throw out the core systems straight away to enjoy world-class digital transformation. Shortlist up to four technology partners for the RFI process and seek a partner that can demonstrate a customised working model in two or three months to prove agility.
Always run the new minimal viable product (MVP) alongside Business as Usual (BAU).
Questions for investing in resources that make change stick
- Which investment delivers the highest value/outcomes?
- How do we re-align resources to support transformation whilst still serving current customers?
- What skills will be needed to plan and deploy the new systems? How do we acquire them?
10) Technology Partner based on Shared Values and Trust
Modernising technology systems is not a short-term project and is key to your future. Get it wrong and you will not be a leader and suffer the pain of sharing a dwindling pool and long tail of revenue and profits. You therefore need long-term technology partners. Able to support you across all regions and markets. Cooper and Vyas state:
"If you don’t get this right, not only could the project fail, but the switching costs could be substantial. Therefore, use informal as well as formal ways of gathering information. Seek out companies whose values you share and whose leadership has proven trustworthy. Evaluate the credibility of their work by looking at the technology systems they have built for themselves. Think about how well those systems support their own distinctive capabilities, especially those that would benefit you as their customer."
Questions for selecting a trustworthy partner with shared values
- What are we looking for in a technology partner? What values are important for us?
- What criteria will we use to ensure our partner has similar values?
- In committing fully to a partner how will we build mutual trust?
We have discussed how modernising your organisation’s technology involves far more than just technology. Learning, culture, leadership, alignment with the organisation’s goals and values are all critical. It is not just about designing new systems but also about engaging individuals to help implement constructive change throughout the enterprise. Change as fast or faster than the leading disrupters in your industry and markets.
Use these ten principles to guide you on the journey. Need any help then try 360Globalnet
The life cycle of information technology is becoming shorter every year. New competitors are disrupting industries by leveraging state-of-the-moment digital practices and processes. Customer expectations are constantly evolving in an accelerating race for the most advanced, hyperconnected, seamless experiences. IT functions are under unrelenting pressure to support leading-edge capabilities such as data analytics, cybersecurity, automated processing, and integration with third-party systems. The easiest way to do this is through platforms that connect everyone to the same cloud-based cross-industry digital infrastructure.