Choosing the right insurance or reinsurance software platforms and tools can be a challenge in itself, but it’s vital to approach this in the right way, Dmitry Mnushkin, President of Treefrog Consulting writes.
Part 1 in a 3-part series of articles dealing with how people can help their companies survive during the pandemic and ultimately help themselves.
It’s hard to listen to the news these days. Death statistics, forced social distancing, soaring unemployment, businesses shuttering their doors – tough not to feel frightened, depressed and powerless. We don’t know if the groceries will keep coming, we don’t know who is going to get sick next and we don’t know if our job will still be there in the next few months.
While the insurance and reinsurance industry has not been particularly affected yet, there is no guarantee this will continue. The world as a whole has not faced an economic challenge this large since the last world war. How people, governments and investors react to the ever-changing situation remains uncertain and uncertainty is both bad for business as well as a tremendous opportunity for early movers to gain an advantage.
The company you work for is now vulnerable. It has spent its formative years adapting to a business and regulatory environment that is now at risk of dramatic change. How quickly your organization anticipates and reacts to this will determine its survival over the next 12-18 months. On the forefront of this change will be new ways of doing insurance and reinsurance business, new regulations affecting how that business can be done and new market dislocations to service.
What is certain is that the old way of doing things will no longer suffice. Processes, tools and workflows will all undergo rapid change. To prepare for this eventuality and ensure your job is not a casualty of it, one must carefully evaluate what your company does well, what it does poorly and where it is vulnerable. This will inevitably lead to modernizing and replacing broken, inefficient and static processes/tools/workflows with superior alternatives.
We don’t have the luxury of making bad decisions right now. A shrinking economy sheds jobs and getting a new one may take some time. Follow these steps to make sure your company (along with yourself) leads the recovery.
In my 25 years working in the software development industry I have seen a lot of missteps made when it came to acquiring or building software tools to boost business productivity. Most of these poor decisions stemmed from the same underlying cause and it had very little to do with how many vendors were evaluated, who was driving the process or how many stakeholders saw the sales deck.
Usually the process of acquiring or building new software begins with a business need. Something isn’t working with the existing process and the existing tool or process can’t be updated enough to fix it. Some companies will let their IT department drive the selection process, others form committees of business users, yet others bring in an outside consultant to help. All of these approaches are 100% valid and can work.
Any failure encountered is most often caused by not knowing what the software actually needs to do. It is easy to be sold on a product/service when a vendor razzle dazzles with their shiniest widget while leaving unmentioned what they cannot do well. After all, we are visual people and the sales folks understand this well.
The result of all the slick demos is that people vote based on how flashy some feature was and not on the software’s ability to perform some critical but mundane task. Fast forward to 6 months after the purchase when the shortcomings of the application have finally been understood forcing additional investment to overcome them. The final product is then delivered late, over budget and missing key functionality.
So what should be done differently? How can the people making the selection remain unmoved by polished presentations, cut through the misdirection and make the best possible selection? The answer is simple in intent but non-trivial in implementation. You must compile a document that clearly identifies all the critical functionality the system MUST be capable of before seeing any demos and make sure each candidate offering satisfies those requirements.
Putting together such a document takes time and expertise – something we at Treefrog do well. It should be done by someone with business analysis experience who understands both the business needs and the technical requirements behind the scenes. The devil is in the details here. Something that seems relatively small can be a giant wrench in the works if it creates an incompatibility with other in-house applications or forces the business to adopt a suboptimal workflow.
The requirements document created can cover many topics – some that are specific to industries and others specific to companies. Areas to cover can include:
- What current business processes and workflow must be fully supported?
- What other applications does the software need to interact with and what is the nature of that interaction?
- What critical performance requirements are there and how much data/throughput are these based on?
- How will organizational short to medium range goals impact the application?
- What should the remote-working capabilities of the software be?
- Where and on what platform must the software run? Internal deployment vs Cloud, Windows vs Mac, any hardware requirements, etc.
This document serves to crystalize an organizational need into specific action items which helps the business focus on what is important. It can act as a filter to quickly eliminate offerings that don’t tick all the boxes. It can serve as the basis for a build cost analysis if you are considering developing the system in-house. Finally, it helps reduce operational and keyperson risk by teasing out technical requirements that have likely been stuck in the minds of a few individuals and never properly written down.
By starting with a good requirements document you can dramatically increase the chance of project success. There is nothing wrong with being decisive and moving quickly to seize an opportunity – just make sure the selection criteria are well understood and include all the things that matter. A job well done here will help your insurance or reinsurance business succeed in the long run.
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This article was contributed by Dmitry Mnushkin, President of Bermuda-based insurance and reinsurance software specialists Treefrog Consulting, a supporter of Reinsurance News.
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