Core System Strategies for the Fintech Age: LEGACY MODERNIZATION IN INSURANCE INDUSTRY, Part 5
LEGACY MODERNIZATION FRAMEWORK
Since its inception, Celent has helped host countless events to facilitate financial institutions selecting the optimal next-generation core system.
Sometimes as a project management office (PMO), other times as a third party advisor, Celent has long been deeply involved in working with financial institutions on processes to optimize core systems.
Rooted in this wealth of advisory experience spanning countless projects, Celent has formulated and suggests using the theoretical yet practical framework in this table.
In the modernization project, three things you should know before starting a tender are:
1. VISION AND CONCEPT
- Initial motivation and direction
2. CHALLENGE AWARENESS
- Management, systems, products and services, business process and its priority
3. EXPECTED CAPABILITIES
- Quantitatively, qualitatively, need to measure the ability of your organization
FIG5-1: Legacy Modernization Framework
The next three things you should need are Methodology for the best project execution:
4. SELECTION PROCESS AND POLICY
- Usually, it is the Constitution of the project, the project charter to be a live document, these seven items are described.
5. SCOPE DEFINITION
- Not only the solution to be implemented (the new system and the new organizational structure), all of the things that the organization is involved up to its realization, without omission, rather than duplicate, each other without contradiction, MECE (Mutually Exclusive and Collectively Exhaustive) is essential.
6. REVIEW PROCESS
- Especially in its project members, evaluation team, it is necessary to ensure the cross-organizational human resources:from both sides of the solution evaluation and commercial evaluation.
FIG5-2: Legacy Modernization Framework (cont.)
When selecting a next-generation core system, the important thing is not to depend on industry-specific differences or degrees of complexity, but to establish a methodology that is versatile.
In other words, the essence of legacy modernization is a comprehensive framework.
That should highlights top-priority business strategy challenges, includes architecture design, and fully reflects the scope definition in light of a firm’s capabilities and strengths to assess the feasibility of the project, all while making sure that it is a good fit.
The KFS are Scope Definition; Understanding Your Risk Tolerance and Organization’s Priority Challenges.
FIG5-3: Scope Definition
Factors that will be crucial to determine the success of system modernization projects include firmly understanding your organization’s priority challenges and appetite for risk coupled with a good project scope definition.
This involves determining priority areas, what to procure and build, and what to cut — all within the scope of your risk tolerance.
Maximizing the use of limited business resources to respond to increasingly diverse and sophisticated digital users’ needs cannot be achieved by simply letting things take their natural course; rather, this requires intent and taking the initiative.
FIG5-4: Legacy modernization is a strategic move in digital innovation
To be continued – Click to read more