7 Best Practices for Replacing Legacy Systems

In 2006, Canadian P&C insurer Desjardins General Insurance Group (DGIG) began a four-year journey to completely migrate its systems from a multiple-virtual storage/integrated database management system platform to a new Windows/Oracle platform. With help from consultant Blue Phoenix, DGIG successfully migrated to a platform that promoted the convergence of distribution channels and enabled performance and scalability improvement over legacy systems both on time and on budget.Based on their experiences with what has been hailed as the largest successful modernization project done in both North America and in the history of the insurance vertical, on the following slides, DGIG and Blue Phoenix identify some best practices that may help insurers when replacing their legacy systems.

1. Executive Buy-In

1. Executive Buy-In: DGIG followed a management approach that relied on the accountability of those responsible and IT resources and involvement of managers and upper management, which ensured the mobilization of resources throughout the project.

2. Proactive, Participative Management

2. Proactive, Participative Management: Throughout the duration of the project, DGIG mobilized stakeholders by setting up interactive means of communication management committees, newsletters and master plans as well as during the transition period. DGIG also implemented change strategies (communication, transition and training plans), which allowed new business projects to be developed on the new platform before the end of the migration work.

3. Strategic Evaluation of Legacy Functionality

3. Strategic Evaluation of Legacy Functionality: DGIG applied extensive resources and timelines to assess the projects impact across the business. Legacy artifacts and logic were measured for relevance to future business goals and requirements. Business logic and relevant business processes were added to the project plan while those no longer essential either were refined or removed.

4. Proof-Driven Vendor Selection

4. Proof-Driven Vendor Selection: While extensive proofs of translation and concept were required to validate vendor technology, the process also identified aspects of the project that would require internal DGIG resources. It was important that DGIG resources maintain aspects of the environment during the project, and a straightforward process of delivery, testing, refinement and training was developed to ensure proper transition.

5. Committment to Timeline

5. Committment to Timeline: To prevent change requests during the late stages of a modernization initiative from delaying or derailing the project, DGIG imposed a three-month freeze on business project deliveries during the migration implementation period. During the various implementation phases, escalation management procedures ensured alignment around critical issues, which helped to avoid ambiguity and misalignment.

6. Thoughtful, Exhaustive Testing

6. Thoughtful, Exhaustive Testing: Cross-departmental representation was essential for DGIG when developing test cases/scenarios for integration and system testing. Testing was started early and involved end users. This proactive approach helped to reduce risk by identifying and solving unexpected integration challenges, underestimated efforts and undetected functional gaps.

7. Committment to Performance

7. Committment to Performance: According to DGIG, a core tenet of the project was the seamless migration experience for users. The requirements went beyond duplicating legacy functionality and business logic; the target system had to meet or exceed performance benchmarks of the multi-virtual storage environment. The solution architecture prioritized performance, paying specific attention to redundancy, recovery and database availability, which helped to enable the implementation of Agile software development and created opportunities for IT to deliver new, value-added services to the business.

Desjardins General Insurance Group and Blue Phoenix suggest following these guidelines to bring legacy replacement projects in both on time and on budget.