In the insurance industry, a lot rides on a single decision. Choosing the core software system may be one of the longest-lasting and most large-scale decisions an organizational leader may make.
Unfortunately, selecting the wrong software architecture or implementing a solution incongruent with business needs occurs too often. These preventable missteps inevitably lead to significant rework, marginal realized benefits, failed projects, and potentially millions in additional costs.
Poorly thought-out decisions contribute to 70% of major projects failing.
Large-scale projects can seem overwhelming and take many years to complete. Complex software transformations require significant resources and capital requirements that are frequently underestimated. A focused mindset during the early stages of software evaluation is one way a leader can distinguish their projects from others.
Many factors drive the need for a software solution, each with unique challenges. The reasons for considering the transition to a new system vary. Your company may need a software system to support growth into new business segments; an aging Enterprise Resource Planning (ERP) system may need replacing; new financial reporting or compliance challenges may require better solutions for several reasons.
Each of your needs provides a compelling reason to pull the trigger on a new system. And sometimes, multiple problems combine into a perfect storm. Knowing there is an issue to address is often the easy part. The next steps become complicated quickly.
Challenges Business Leaders Encounter with New Software Projects
Leaders generally consider three scenarios when faced with the question of what kind of software solution to implement:
- Upgrade an existing platform to a more modern version of the same software that may be generations newer.
- Consider alternative system solutions to replace existing legacy systems.
- For new business segments, consider all potential solutions in the marketplace.
While these options may seem straightforward, the devil is in the details. Understanding the best long-term options for a company requires thorough due diligence that relies on an experienced team of project managers and subject matter experts (SMEs).
Trust the Process
I once heard a business leader on a project say, “You can’t skip steps.” Time and again, this mantra proves true for large, complex, technical projects–and it demonstrates the value of devoting considerable energy to selecting suitable software systems from the onset.
Cutting corners to make decisions based on prior experience with a system, or on general market insights to save time and money, ends up hindering the project due to costly shortcuts.
3 Poor Reasons for Bypassing Project Due Diligence
- Misplaced trust in the status quo and comfort in a limited solution review
- Concerns or constraints regarding time and money needed to conduct a complete systems review
- Simply not having the experience and knowledge to see the importance of a thorough systems evaluation
A Solid Foundation for Evaluating Software
A high-performance core software platform is only as valuable as the underlying business processes and cultural buy-in that support it. At this stage, it is crucial to identify business requirements and find the right solution instead of uncovering risks or issues after the foundation is poured.
A powerful tool regularly used in software evaluation and selection is the Request for Proposal (RFP). An effective RFP digs deep into all aspects of an organization’s software solution needs and a potential implementation partner’s capabilities.
Depending on the scale of the project, preparing an RFP may involve months or more of work. Like a guide for a wilderness journey, an experienced project manager or subject matter expert (SME) knows the dangers and how to prepare detailed requirements and the selection process. Heed the sage advice: “You don’t know what you don’t know.” Acknowledging the complexities and experiencing shortcomings early can mean the difference between success and failure.
Creating a software selection RFP can be much like navigating a minefield. To avoid disaster, experienced decision-makers consider all facets of the project, from physical servers to executive culture and everything in between.
Too often, teams reach a decision based on a partial assessment of needs or simply looking at the project narrowly as an IT initiative. Begin with the notion that the software decision impacts the foundation of business operations and strategic planning for years or decades.
Solutions Are Not A Silver Bullet
Working under the assumption that a new software system will solve the world’s problems leads to unintended consequences and eventualities.
Businesses fall for the belief that software vendors align a new system to your existing – and often unique – business processes. After all, they were hired to implement the business tool, right?
Sure, but remember: The vendors know software. Their expertise does not generally extend much beyond their system.
Comprehensive evaluation of business requirements, change management, strategic planning, and cultural alignment all fall outside their sphere of expertise, yet they are the nexus of an enterprise software implementation. Call it “the why” of the project. A knowledgeable project manager leads your team to achieve that full potential, from project planning and system selection to a successful transition into a prosperous future.
After Software Evaluation, What’s Next?
Squeezing every ounce of opportunity from the software requires an honest organizational assessment. Know thyself. Acknowledge the comprehensive needs of the organization, not just specific solution areas. Software is a tool. Knowing why you’re using software and leveraging that to your advantage is a true skill.
- Start with a top-to-bottom review of existing processes
- Document the stakeholder needs
- Develop an evaluation matrix to more easily compare vendor solutions against potentially hundreds of requirements
In addition to providing a comprehensive understanding of the company’s needs, documentation of requirements through the RFP process frames the project’s goals, progression plan, and an audit trail for decisions.
Lack of Due Diligence Causes Unnecessary Delays
A recent TAC4 project highlights the importance of due diligence: A new client was experiencing considerable angst and frustration with their project before bringing our team in to help. A primary struggle involved internal stakeholders voicing concerns over requirements not being adequately collected or reviewed at the project’s onset, leading to several months of additional work to gain clarity and outline a better approach.
The Benefits of Due Diligence in Software Selection
Consider the due diligence that involves a thorough evaluation of solutions as an investment opportunity and a tool for success, not as a project delay or expense. Due diligence establishes the foundation for your project success and provides a deep understanding of the organization’s workings.
With the help of an experienced RFP manager and project leader, the software evaluation phase captures deep insights into the organization’s processes and culture, positioning the company for success long after implementing the new solution.
Contact TAC4 about leading your insurance system transformation with a true partner that knows successful projects and specializes in vendor selection and management.