Legacy software may slow innovation — but building from scratch is risky.
Backend bogging you down? There’s a smarter way for insurance brands to modernize legacy software.
If your insurance company has a long, storied history, no doubt your backend does, too. And it’s probably slowing you down.
After years of business change, haphazard additions, and patch fixes, your teams may find themselves blocked by the backend at every turn:
- It’s difficult to service existing products — and innovating processes or adding new products is nearly impossible.
- Your teams do things manually, take redundant steps, and devise painful workarounds to get by.
- Your IT group is inundated with feature requests — but they’re so busy fixing current functionality they can’t address evolving business needs.
- Adding IT resources might help — but finding developers who work with the code your system is built with is getting harder and harder.
When you’re falling behind the competition, facing growing security gaps, and dealing with dwindling support, you know it’s time to do something about your legacy software.
But starting from scratch may be too risky.
We know. When everyone hates the old system so much, it’s natural to dream of building a brand new one using all the latest technologies and best practices. Wouldn’t it be wonderful to replace your legacy software completely?
But we also know it’s time to think twice. Your legacy software handles the heavy lifting for your business. It has functionality your teams don’t know about. It holds data your stakeholders have long forgotten.
Likely built over a period of 10 to 25 years, replacing it would be a huge development project. And you’d face completely unrealistic pressure to complete a re-build in 6 to 24 months!
The facts speak for themselves: 90% of large software projects are challenged or cancelled — and 40% of them never launch at all. Do you like those odds?
Nope. If you work in the insurance industry, your risk-reduction instincts should be kicking in about now.
Beware the tear-down mentality.
Your legacy software is critical to your business — sort of like your house is critical to your life. If you were unhappy with your house, you might consult a builder to figure out how to fix it.
What if that builder — without even stepping foot inside your house — tells you it’s a tear-down. Would you hire them? Probably not.
But all too often, we take that risk when what we’re building is software. Rather than modernize legacy systems, developers want to design custom software from scratch. Why?
Because it’s easier. But it’s not necessarily better.
Let’s say you hire that builder after all. You wait patiently for 24 months for your brand new dream house to be built. The risks you’ve run may not become clear until move-in day. Suddenly you realize:
- There aren’t enough bedrooms.
- Your furniture doesn’t fit into any of the rooms.
- And come to look closer, there’s no kitchen at all!
What went wrong? Your builder didn’t accurately assess your existing house, that’s what. The huge scope of the project overshadowed important details. This is why so many large software projects fail. It’s why CIOs and CTOs lose their jobs.
Now, huge amounts of money and time are tied up in a shiny new system that doesn’t work. You’re left with the prospect of limping along with your painful old system, or trying to make-do with a new system that is incomplete.
In these situations, a deadly resource race can develop — between maintaining and fixing up the old system vs. reworking and adding onto the new.
Time to change your mindset.
Ok, so you definitely need to face the issues with your legacy software, but building a new system from scratch isn’t the answer. So what is?!
The answer is legacy software modernization — it’s the smart way to reduce risk and get results.
Definition: Software modernization is an approach that transforms what would be a huge software development project into a series of smaller projects that deliver continuous improvement.
While 90% of large software projects fail, just 24% of small projects end up that way. By embracing a modernization mindset, you can plan and prioritize a series of smaller, more doable software development projects.
Though it may seem counter-intuitive, modernizing legacy software step-by-step gets you further towards your goals faster, while reducing the risk of major budget or schedule overruns.
What does modernization look like?
To stick with our house metaphor, the modernization approach means listing out and prioritizing everything you dislike about your house. Once you’ve done that, let’s say upgrading the kitchen is a high priority. Great.
Your builders must thoroughly examine the existing kitchen to understand each asset it holds, every feature it offers, and what needs improvement. In light of your old functionality, existing data, and new business requirements, they design an improved kitchen while leaving the old one in place.
Because the kitchen is just one room of the house, development is relatively quick. Once the new kitchen is ready, small groups of users are invited to test it out. Their feedback helps the builder iterate and work out all the kinks.
Now, all users can decide for themselves: Will I keep using the old, painful kitchen I know? Or am I ready to learn to use the new kitchen? Over time, all users migrate. And finally, the old kitchen can be safely shut down.
In the meanwhile, the builders are sprinting ahead to upgrade the other rooms in order of priority. At then end of a year, your insurance company has enjoyed a string of successful software improvements — rather than waiting a full year or two to move into a new house full of unpleasant surprises.
Time to do some modernizing?
If you’re convinced that it’s time to modernize, great! But what can you say to stakeholders who can’t stand your legacy software for one more minute?
Tell them that a modernization approach can deliver improvements to the business continuously rather than having to use that old system unchanged until a new system can be built.
More, tell them that from-scratch development is too risky for massive, mission-critical systems. Educating your stakeholders with a clear-eyed risk assessment will help you avoid large project pitfalls like these:
- All-or-nothing stakes: The new system everyone’s dreaming of will take a long time to develop. Any miss in definition, communication, or implementation will delay launch of the entire platform. And no system is perfect right away. Failure to deliver on time can cost a company millions — and a CIO or CTO their job. An agile modernization approach allows prioritization, iteration, and continuous improvement that builds trust with users AND executive decision-makers. Legacy modernization reduces risk, creates less work stoppage, and allows you to deliver more value in the same timeframe and budget.
- Requirements gaps: Your stakeholders may be frustrated by a backend that’s out of step with today’s insurance business practices. But remember: your old software has functionality your stakeholders have long forgotten. In a massive software project, requirements will slip through the cracks. Meanwhile, requirements change. Even as a new system is built, features may be added to the old one. This can create a vicious cycle where the new system can’t catch up to the ever-expanding scope of the old — and the budget soars out of control. Requirements gaps can keep a big project from ever launching at all.
- Data migration gotchas: Many software development companies are only too glad to estimate a from-scratch platform build. Building from scratch lets developers create clean, streamlined code. But the old, patchwork system may hold hidden data your business depends on. Moving data to its new home can reveal big problems: the new software doesn’t house it all correctly. Issues with the database schema upon which a new interface was built means workflows break, frustrations mount, and delays become inevitable.
- Bumpy transitions: Whether your existing software is well-designed or not, the fact remains that current employees know how to use it. Introducing a built-from-scratch system over the course of a weekend plays havoc with your employees. Even if the software is perfect — which it never is — basic tasks that used to take seconds now take minutes and even hours. Even with extensive training, asking employees to change core tools and processes too quickly is a recipe for service issues. When your teams are stressed and frustrated, your customers will feel it.
Instead, invite stakeholders to adopt a modernization mindset. Rather than trying to replace legacy software all at once, think in sprints. Break your wish list into a prioritized set of projects, then build each part right. Your insurance company can avoid costly missteps and gain real value, faster when you:
- Retain control: A modernization mindset puts you in control. Focusing on the features that matter most to your agent, support, or underwriting teams allows you to deliver powerful value to those who need it most. Build momentum and get kudos quickly — without making the entire company wait until the entire platform is rebuilt.
- Manage change: Step-by-step software redesign empowers your employees. A roll-forward, roll-back strategy helps manage the pace of change, smooths out spikes in the learning curve, and protects productivity. Modernization gives everyone ample time to learn and level-up as the platform improves.
- Realize Value: Modernization reduces up-front investment and speeds you to returns in a fraction of the time. With step-by-step software redesign, you also avoid a big write-off by depreciating your software capital investment over time.
Modernizing mission-critical software can unlock new growth for your insurance business. Go into any software project with eyes-wide-open to the risks, and set yourself up for success. Be sure stakeholders agree on:
- A budget that will allow you to modernize the features your teams, customers, and partners need to succeed.
- A project champion who is empowered to lead and make decisions along the way.
- Ready access to development resources with the right skills for the job.
If you don’t have experienced developers in-house, choose a software development partner with a wealth of experience in legacy modernization.
We’re out here.