After establishing that IT systems have cycles, we now want to understand when the legacy systems reached their declination point. At this point, a modernization of our systems is no longer possible or economically sensible and the time for replacing the core insurance platform has arrived. The following factors indicate that your legacy platform needs replacing:icaigfactors
Indicating factors | Category |
Declining data quality | Cost and Risk |
IT platform is the bottleneck during the product development process | Cost and Risk |
Business needs can no longer be met | Cost and Risk |
Supervisory measures can no longer be met | Cost and Risk |
Legacy systems architecture prevents a modernization · Blocking new technologies/requirements · Initial architecture did not foresee new requirements · Patchwork of previous modernizations hard to maintain | Cost and Risk |
Maintenance becoming too expensive · Big effort to create new insurance products/product generations · Hard to find people with the skill set to maintain your IT systems | Cost |
Modernization effort bigger than replacement effort | Cost |
Performance issues | Risk |
Security risks | Risk |
Etc. | |
Table 1 - Indicating factors for replacing the Legacy Systems
Broken down into the underlying categories, this means your insurance platform has to be replaced when either running the operation with the platform becomes an operational risk or when keeping the platform becomes a financial risk.
Figure 2 - Costs and Risks for replacing the Legacy Systems
Analysing the various indicating factors, we can see that the overlap between the cost- and risk-related issues in your IT landscape are mostly to be found in the system architecture area (product development, business processes, time to market, etc.), leaving us with the conclusion that a significant amount of architecture work will be necessary in any case.
In fact, every factor identified in your legacy systems will have various impacts during the execution of the IT transformation. We have to take note of the present issues for our future project scheduling and planning. Architecture issues in the legacy systems will impact the effort for the architecture analysis and especially the cross-platform processes. Additionally, it creates a need for resolving them during the transformation and adapting the underlying business processes. Issues in the current system with data quality will impact the project during the abstraction process, the product definition, and will require further analysis and effort during the data migration process.
The necessary activities are specific for every company and making a generic statement of the needed analysis steps is impossible. The project teams who are responsible for the execution of the transformation have to draw the applicable conclusions and schedule the necessary tasks.
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