The running of any L&P business depends on a range of IT systems, built up over decades.
Each individual system has a specific role to play – one for which it was specifically developed be that in the 1970s, 80’s, 90’s or 00’s.
They represent a complex coalition, sometimes uneasy, of technologies, languages and standards.
Legacy systems were written to enable organisations to compete in a life and pensions industry very different to that of today. That is why they struggle to cope with new and increasingly complex; products, channels and markets.
In particular, they struggle to speedily launch new and more innovative products.
There are 3 reasons why legacy systems struggle in terms of bringing new products to market:
1. Bringing a new product to market on legacy systems is slow and expensive because it requires complex custom development, testing and integration.
Moreover, such projects are, as is the case with any software development project, prone to delays and over-runs.
How much is expensive? Well, it is not unusual for such projects to take more than a year and result in seven figure costs!
A classic 1970s Jaguar sports car is a wonderful thing, but you can’t expect it to accelerate, handle or corner like a modern day executive saloon. The same applies to legacy systems - trying to get them to perform like a new system is not practical.
2. Because legacy systems are inherently inflexible, they generally require a compromise in terms of; administrative efficiency, service quality levels and degree of management control (information, compliance, reporting, etc.).
That means they are likely to fall short in terms of business expectations, particularly in terms of process automation and optimisation.
Anybody with enough training and instruction can dance Swan Lake, but that doesn’t mean they are going be graceful or elegant at doing it. The same applies to legacy systems, perhaps they can be re-written to handle new products, but clearly with less than optimal levels of sophistication and efficiency.
3. As is the case with code based procedural systems, once software changes have been made, they can quickly be rendered out of date by the moves of a competitor, or the changes of a regulator.
In a continually changing marketplace flexibility is a major challenge.
In too many organisations simple tasks, such as; changing the rates of calculation, or the fax number on a template requires writing, or re-writing code. But, it shouldn’t need to involve IT at all.
At Exaxe, we enable organisations to launch new products and administer them more efficiently, but without an overhaul of existing IT systems. That means significant saving in terms of costs, with solutions implemented in as little as 21 weeks.
Norman Carroll, CEO, Exaxe