Seven Lessons from a Successful Platform Transformation

The Case of Phoenix Life UK
by Jamie Macgregor, August 21, 2012
Case Studies
EMEA

Abstract

This case study looks at a five year, seven month transformation programme to create a new outsourced business operating model based upon variable costing at Phoenix Life UK. In doing so, the firm decommissioned 11 lines of business systems and approximately 150 supporting satellites down to one non-mainframe platform. This programme saw the successful migration of 3.7 million policies onto TCS BaNCS and a further 5.2 million policies archived, across a thousand life product variants in the UK.

In the report, Seven Lessons from a Successful Platform Transformation: The Case of Phoenix Life UK, Celent provides an overview of the programme, which included the outsourcing of UK closed books to TCS Diligenta, the important lessons learned, and main achievements. The Phoenix Group operates mainly in the UK, with a small presence in Ireland, and specialises in acquiring and managing closed life and pension funds. The Group looks after the protection and retirement interests of over 6.5 million policyholders and has assets of approximately £72.1 billion (as of 31 December 2011).

The seven lessons explored in this case study include:

  • Maintaining continuity in leadership.
  • Creating a shared purpose between you and your partners from the outset.
  • Recognising a false start when you see it, and then being bold enough to take action quickly.
  • Not underestimating the level of poor data quality in your source systems, and also the quantity of documentation that needs to be rebuilt.
  • Predicting the bottlenecks, especially in the actuarial department.
  • Anticipating the need to reverse-engineer some products in order to rebuild them on the target platform, because the source system owner retains the intellectual property rights to the code.
  • Avoiding the temptation to replicate the past for short-term gain in the migration plan as opposed to long-term gain in a more efficient business operation.

“In recent years, the UK life and pensions industry has lost confidence in its ability to tackle complex migrations of closed books, preferring instead to let them run off naturally on their legacy infrastructure,” says Jamie Macgregor, Senior Analyst with Celent’s Insurance Group and author of the report. “This transformation demonstrates that it is possible to have success with a large-scale migration onto a modern platform and, in doing so, achieve the desired business outcomes of a lower cost operation with a reduced risk of technology obsolescence.”

This report provides an overview of the transformation programme, the lessons learned, key achievements, and next steps for both Phoenix Life UK and Diligenta.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Erica Ferguson
eferguson@celent.com
Tel.: +1 617 262 8225

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

3

Introduction

4

About Phoenix Life

5

Transformation Overview

12

Lessons Learned

20

Achievements and Next Steps

25

Leveraging Celent’s Expertise

28

Related Celent Research

29

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