Consider this when configuring and customizing insurance technology

What’s driving the need for customization and configurability in the insurance technology space?

As a philosopher once said, “The only thing that is constant is change.” And this is certainly true of the insurance industry. Mix a dash of market forces, a cup of product launches, a sprinkling of new countries, a handful of fresh business lines and a measure of industry regulations, and you’ve got a recipe for transformation.

This constant state of evolution requires insurers to grow, expand, globalize and diversify with agility, and they need truly adaptable software to realize those goals and beyond. After all, the future often serves up ways of doing business that were inconceivable at the outset.

Buyer beware

Despite the attraction of customization and configurability, such flexibility is not necessarily the panacea one might be led to believe. In an effort to meet the ever evolving needs of complex trading environments, there are distinct opportunities for things to go wrong – quite drastically wrong, in fact – when adapting software.

Those who invest in customizable software as a future-proof investment have to realize that, despite the allure of agility and flexibility, instant gratification is rarely attainable.

Best practice in customization and configuration

So how do you avoid pitfalls? A number of simple guidelines can help:

  1. Don’t go two steps forward, one back.
    It’s all too easy to be dazzled by promises of agility, only to find out what wasn’t broken in the first place is suddenly and negatively impacted. Any customization or configuration needs to follow stringent and trusted software development lifecycles – with standard rigor and robust testing applied — to ensure that existing environments are not adversely affected.
  2. Put the tools in the right hands.
    First things first: You need to control who is responsible for driving any new configurations. You simply can’t place such consequential change into the hands of your general user community. This will almost certainly end up in chaos. Instead, ensure you have the right skills in-house, or work with a partner with the right experience in adaptive software. As they say, if you think it’s expensive hiring a professional, wait until you hire an amateur.
  3. Find a middle ground.
    One of the dangers of choosing highly customizable software is that when you are initially faced with a ridged and inflexible project requirement, you can easily be driven in one direction, limiting what you can do. Conversely, if you present people with a blank canvas, specifications can very quickly spiral out of control, inviting inevitable expense and complexity. Customize and configure to add value, yes, but undertake it judiciously and within parameters to get the best out of it.
  4. Be honest with yourself.
    It’s all too easy to believe that you need the latest, shiniest, most customizable software out there. But do you really? There are many incarnations of software preconfigured for certain sectors of the market. If you don’t have the size, investment or expertise to get heavily engaged in the activity of customizing implementations, a suitable “out-of-the-box” solution will suffice. Standard insurers often require limited configurability, whilst highly competitive organizations in complex international markets need to differentiate. Think clearly about who you are, where you want to be and invest wisely.
  5. Prepare for the knowledge transfer.
    One of the huge benefits of customizable software — after you go live -– is that you are now empowered as a customer to become masters of your own destiny. Suddenly, your reliance on vendors reduces, and you don’t need to go back to them when you want to enter a new market, for example. Yet capability like that doesn’t just happen overnight. You need to adopt the right skills to leverage the tools and utilities now in your grasp. You need to understand the holistic ramifications of what is being changed, and ask yourself the question — “Are we capable of taking on that responsibility once the implementer has gone?” Investing in adaptive software requires investing in your own skills base as well – a fundamental factor that is integral to ongoing ROI.
  6. Know discipline is everything.
    When you get down and dirty into a complex software implementation, it’s easy to make big promises to an excited bunch of stakeholders. For sure, you need executive sponsorship and user buy-in from the outset, but it takes disciplined project management and a steely focus to avoid internal “scope creep.”
  7. Ask the right questions
    In the same way software is adapting, the way people purchase software needs to evolve as well. The challenge with traditional RFIs and RFPs is that they are often rigid by nature. If you only ask certain questions, you’ll only get certain answers. The true scope of customizable software can be left unevaluated with unforeseen scenarios rarely explored. Consider both what you do know, and what you don’t. If your refresh cycle for insurance software is 5 to 10 years, then your specification should look to the same horizon.

Change is omnipresent – and the complex scenarios you thought were once only heard about in insurance conferences are becoming a reality for many.

Fully customizable and configurable software is attractive, but be sure you’re implementing it for the right reasons. With a clear vision of where you want to go and what you want to accomplish, combined with a pragmatic view of the unknown and a measure of your own capabilities, a future of possibilities lies ahead.


richard-clark CSC BlogsRichard Clark is the Head of Business Development for Xuber, a DXC company. Richard has been a key player in our insurance software business since 1997. Connect with him on Twitter.

 

 

RELATED LINKS

The vision of a global digital insurance marketplace

The 4 pillars essential to insurance technology success

Is this Asian insurance market primed for a tech transformation?

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