Enterprising Developments

The Importance of Bringing the Right Mindset to a Legacy Upgrade

Joe McKendrick
Insurance Experts' Forum, April 17, 2013

In a recent post, Richard Clarke, head of business development at Xuber, discusses how B.F. Skinner trained rats to respond in certain ways when promoted by positive reinforcement and stop other behaviors through negative reinforcement.

He extends this analogy to the learned behavior enterprises develop toward legacy systems upgrades. That is, a lot of negative reinforcement occurs when an upgrade is attempted.

The problem is a matter of psychology, he observes. And that psychology has a lot to do with the organization's attitude toward IT.

“If an enterprise experiences the negative impact of legacy systems enough times, it is likely to instigate change to avoid it happening again, the alternative being that too much pain ultimately loses business,” he writes. “If an enterprise realizes that there is a positive benefit to be had by enhancing its systems, it then has the business case for replacement to achieve advantage.”

Organizations that view IT as cost centers will see any upgrade efforts as money poured down the drain just to keep the status quo. However, taking the view of IT as a business driver means upgrades are essential and even preferred.

Insurance IT managers need to impress the urgency of having a solid digital foundation to the business. For years, many upgrades meant adding cleaner front-end interfaces, a more consolidated and less buggy code base on the back end, or better consoles for the system administrators. They often were more beneficial to IT departments than anyone else.

Now, however, upgrading means keeping pace with the industry, in which many players are operating nimble and fast with cloud-based systems, or doing incredible analytics with their data stores.

Clarke describes why upgrades have such urgency:

“It's not just about avoiding pain; it's also about losing ground to those that invest to succeed or to the new kids on the block with no legacy systems in the first place. It's about investing in open systems versus closed systems, and creating an environment that flexes with change rather than breaks. It's about uniting disparate business units with reference-able sets of data to exchange management and customer information more freely. It's about uniting customer touch points using technology to enhance the customer experience. It's about sticking up the periscope and harnessing big data to look at a panoramic view of the market. Most importantly, it's about understanding the changing customer, and staying one step ahead of them before competitors do it first.”

In today's insurance business, IT doesn't just support the business, IT is the business.

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at joe@mckendrickresearch.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

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