By Dave Punter-Oracle Insurance-Oracle on Jun 04, 2015
I spend a lot of time talking to a range of individuals within various financial services institutions (predominately Life & Annuity Insurance carriers in fact), directly and indirectly, about the “fun” aspects of maintaining and modernizing their business processing systems, especially when faced with the prospect of having to comply with new and ever-evolving regulations requiring companies to
- Maintain a regulated level of charges and demonstrate it
- Reveal your audited processes to the outside world
- Change how you remunerate your distribution network – for future business only, that is
- Start providing enrolment services for your corporate clients
- Be prepared for unannounced visits from compliance staff
- And so forth
Actually, these tend not to present themselves individually but seem to be a constant part of doing business. Companies’ responses to these requests from regulators are comfortably reliable and familiar as they rely on the resourcefulness of the in house team to adequately “polish up” the existing estate. In essence, companies are dependent on a group of long-term employees who are passionate about the systems they support (and may have built) for quick fixes instead of developing a strategy for modernizing.
Having been in this situation in the past, it’s not surprising to me that companies turn a blind eye to “how” things get done as long as 1) it gets done and 2) doesn’t interrupt business life as usual.
So how long have businesses left themselves in a vulnerable position by relying too heavily on in-house software maintained by these types of passionate teams? Well I forget personally, but my sources have recently informed me that this has been perpetuated since the early nineties. This historically tried and tested development regime has a cumulative “agility strangulation” cost, as I learned from personal experience and regularly try to communicate to the aforementioned financial services institutions.
Being an Insurance industry expert helps when trying to convey this, but coming from a vendor they sometimes assume that I am biased. Imagine my joy when I came across the following from those nice people at McKinsey
- Related article: Transitioning to standard software: Lessons from ERP pioneers
I couldn’t have put it better myself, as Oracle is in an ideal position for many reasons to be an active partner in the transformation programs McKinsey so articulately and knowledgably describe as the “5 T’s” in the “Lessons in standardization” section of the article. I recommend you read the McKinsey article as well as the most-recent Gartner Magic Quadrant report to anybody finding themselves caught up in this dilemma of how to transition to standard software.
- Related Report: Gartner’s Magic Quadrant for North American Life Insurance Policy Administration Systems
You may also want to read a recent blog post on core system vendor selection.
- Related Blog post: Oracle’s Dave Shively Offers His Thoughts on Core System Solution and Vendor Selection
If you want more information on Oracle’s comprehensive set of solutions for insurers and how they apply to individual parts of the business, visit oracle.com/insurance.