An article in Money Marketing on 29 January highlighted the challenge facing providers and platforms when it comes to maintaining and replacing their IT infrastructure. As the market they service expands, the strain on these systems grows and this has attracted interest from the regulator with the article stating the 'FCA is set to probe the underlying technology that powers platforms'. The challenge facing these organisations is how to:
> Ensure continual system availability (near 24 * 7 * 365)
> Meet the growth expectations of the business
> Support the changing propositions of the business
> Minimise the risk presented by ageing technology
While at the same time reducing the overall cost of administration.
Core to the IT infrastructure is the policy administration system or systems. Given their complexity and the perceived difficulty and cost in replacing them, they can often significantly outlive their original expected lifetimes. Many providers are still relying on mission-critical systems that were originally implemented in the 1980s. The IT architecture is further complicated by systems inherited through mergers and acquisitions.
When faced with a 'replace or sticking-plaster' approach to meet new requirements from the business, the latter is often selected based on a short-term business justification. Even when they are using modern solutions, providers and their vendors still invest in far too much bespoking to meet short-term business demands.
This type of strategy leads to a 'death by a thousand cuts', with the overall cost of administration ballooning over time and the risks the systems present to the business increasing incrementally. Often the final port of call for these books of business is with an outsourcer on the hope of running the 'mess for less'.
So how can providers avoid these problems and specifically address some of the concerns raised by the FCA?
Key to this is to acknowledge the competing priorities and develop a strategy that addresses them. Implementing an upgradeable packaged solution such as our administrator platform, enables organisations to deliver regulatory change and functionality to support additional business demands in parallel with refreshing the technology stack it is delivered on. This helps to avoid the costs and risks associated with supporting ageing software and hardware.
Modern business models require systems to have an open architecture enabling information and processes to be consumed and shared with third-party applications. Standard interfaces delivered with the package enable easy integration with other systems, reducing the need to build bespoke interfacing solutions that are difficult and costly to maintain.
As the Money Marketing article highlights, delivering upgrades presents its own challenges. Too often the bespoking of processing leads to complex and risky upgrades. Applications such as our administrator platform minimise this by enabling providers to maintain client-specific rules separately from the core application, reducing the complexity of upgrades.
Key to successful upgrades is having well-thought-out and well-documented procedures in place to minimise the risk. Organisations should look for software companies that have a structured approach to release management and whose processes conform to international standards such as ISO9001 regarding quality and ISO27001 for security. A dedicated testing team is also a good indicator of a resilient low-risk approach to upgrades.
Of course a good solution from an experienced provider only solves a part of the puzzle. Ensuring the other sides are complete relies on a strong implementation team and a clear strategic direction when it comes to maintaining and evolving their IT estate.
More of our views on addressing the challenges of legacy systems can found in our Whitepaper: Heritage Transformation – do or die.