“The time you want the map…is before you enter the woods” – Brendon Burchard
GPS navigation technology has spoiled us. It provides step-by-step directions that sometimes make it difficult to understand where you came from and where you are heading. They only show a slice of the journey; it can be disorienting when the tech fails, especially while traveling at high speeds.
The same can be said for legacy transformation programs. The ecosystem required to support an insurance company is comprised of many moving parts. These parts are connected using disparate integration methods, with many shared functions across multiple components. Very few people understand the full breadth and depth of the environment or which components are the authoritative source of the truth for specific business processes and information.
Insurers built these ecosystems over many decades; they contain systems that insurers developed using technologies that have evolved over that time. Most companies started with monolithic mainframe administration systems that performed all the functions necessary to run an insurance company. Over time, insurers rebuilt parts of their systems using the technology du jour to replace underwriting, agent compensation, billing, and claims functionality. These replacements were usually incomplete.
As products evolved, insurers added additional admin systems, increasing redundancy across many functions. The resulting environment represents a patchwork configuration that includes multiple admin engines and numerous robotic-assisted, quasi-automated, and manual processes.
The advent of cloud-enabled digital technologies and a focus on enhancing customer experience have inspired insurers to transform their operations and systems. An important first step is to develop a map of the current environment to understand how the business traverses the components of the ecosystem.
We did this as part of the Enterprise Business Architecture team that I managed at a large life insurer. We developed a functional component representation of our operating environment as a prelude to a series of strategic initiatives. The representation only included business terms, drilling down into each functional area (e.g., new business, product, billing). Doing so provided a structure for us to map our systems and databases to a sub-function level.
We developed a poster-sized chart or roadmap that contained two levels of functional decomposition. It became one of our most useful tools for working with the business areas: helping develop a common language to refer to areas of complexity and define, in business terms, the requirements for new enhancements. It shifted the discussion from talking about system names to talking about business capabilities. We built a knowledge base that mapped relevant systems information to each of the sub-functions in the map. Doing so allowed us to create heatmaps that uncovered areas of overlap and identify options for reducing the complexity of the ecosystem.
Once we understood the current state, we focused on developing our optimal end-state for our strategic transformation–again, mapping the components of the future state against our component roadmap. We then defined a series of projects that we could implement at each step, bringing us closer to our strategic goals. In addition, we were able to communicate to the business sponsors what functionality to include with each step.
The Novarica Core Systems Map provides a common frame of reference for insurer executives to discuss their application portfolios. Insurers can use it as the starting point as they pursue digital transformations.
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