A spotlight on IT migration projects at insurers
- 91 percent of all IT projects fail completely or do not meet the set targets.
- As a result, 94 percent of all IT projects restart at least once.
- Challenges and (temporary) setbacks to a project are therefore not uncommon. A professional approach to the situation is particularly important.
Review and recovery following our PURE approach
Modernization of IT has gained significant importance for insurance companies in recent years. This can be seen in particular in the fact that companies are now putting their words into action and numerous modernization initiatives have already been launched. The complexity of such projects is the reason why institutions have delayed their activities for a long time. After all, system implementations and migrations are the most complex and costly IT projects.This also explains the frequent, diverse challenges that occur during the course of the project, which statistically at least four out of five projects have to deal with. (Temporary) setbacks are therefore by no means uncommon, but can also occur on well managed projects. This makes it all the more important to handle the situation professionally in order to get the project back on track as quickly as possible and not to jeopardize the success of the project.
System implementations and migration projects are the most complex and costly projects within IT. For this reason, it is not surprising that challenges arise quite frequently in the course of a project, and sometimes they are even accompanied by complications. These are by no means isolated cases. Setbacks do not necessarily have to put the whole project back to square one. Professional and determined handling of the situation is crucial for the progress of the project.
What are the reasons for the special challenges? In addition to the inherent complexity of the topic, the challenges are primarily due to the complexity when managing such projects. It results from working together with software providers and often other specialized providers.
In addition, the providers often engage highly specialized technical experts. However, they do not necessarily have sufficient project management skills. Generally speaking, bottlenecks in staffing are not uncommon among providers. One reason for this are the many migration projects running at the same time in the market.
In addition, providers often show too little initiative of their own to make their efforts and progress transparent. Some insurers try to meet these challenges with general contractor arrangements and partner concepts. However, experience shows that even such approaches do not relieve the client from the active control and driving role. In any case, the complexity of management is the insurers’ responsibility. Insurers have no choice but to proactively face this complexity by establishing appropriate governance and control mechanisms.
However, insurers often lack the relevant experience. Without this experience, however, it is very difficult to assess the effectiveness of such mechanisms in advance. It is often only in the course of the project that it becomes apparent which control mechanisms are proving worthwhile and which are not. Readjustments become necessary to ensure the controllability of the project in the long term.
Conclusion: Insufficient controllability and a lack of transparency are the most frequent causes for the special challenges that occur in the course of a project.
If the (potential) setback of a project is identified early on, then challenges can usually be overcome at short notice and the project can be put back on track. If this is not recognized, important time will pass before the project can be stabilized. In these situations a reset of the project is often necessary: The previous planning assumptions need to be scrutinized. Even a rough extension of the original planning by +15 percent is not very realistic in such cases.
Reviews and recoveries have become established in practice for the independent evaluation of projects. Their aim is to independently assess the situation of a project and, if necessary, to define appropriate measures.
The aim of reviews and recoveries is to critically examine whether a project is able to achieve the goals set at the beginning under the current conditions and to make any impacts on time, quality and budget transparent at an early stage. An equally elementary component is defining and introducing appropriate countermeasures to ensure the success of a project despite any temporary setbacks.
zeb offers the PURE approach (= Prepare, Understand, Recover, Ensure) for reviewing and recovering IT migration projects. The approach evaluates projects in four steps along the five dimensions Scope & Objectives, Solution & Functionality, Organization & Governance, Planning & Execution and Business Value.
For this purpose, interviews with experts and stakeholders are conducted to assess the current status of the project as well as possible problems and challenges. In addition, the project plan is reviewed and deviations from the plan are analyzed. This also includes a realistic estimation of past and future project costs.
This is followed by an analysis of the respective causes, including a definition of specific implementation measures, in order to resolve possible problems at short notice and to prevent them in the future. Any residual risks are processed transparently and presented to stakeholders.
The approach has already been successfully used in numerous reviews and has helped to identify and resolve project setbacks at an early stage.