In the last article, we discussed Application Modernization and the steps that should be taken to ensure a successful Modernization project. In this article, we will discuss which systems are viable candidates for Modernization and the reasoning behind it.
Regardless of company or industry, when considering application portfolios for modernization, only systems that hold valuable business functionality should be considered for modernization. In the P&C industry, specifically, it could be said that there are three high-level classes of software worth considering for modernization:
- Core Processing Legacy Systems (Policy, Claims, Billing)
- Non-Core Processing Legacy Systems
- Systems that may not be legacy systems in the classic sense but would benefit from standardization
Each class has its own rationale for modernization:
Core Processing Legacy Systems:
This class includes systems like PMSC, Paxus, Huon, and so on. Some may argue that such systems are so old from an architecture point of view, and/or that they have been so heavily modified, that there is little hope for redemption. However, if a replacement project is forecasted for the future, these core systems can often be ideal candidates for an Assessment, which is the first phase of Modernization.
The result of a Modernization Assessment is holistic documentation that identifies exactly what the system is doing, as well as how the system ties together with other systems, with internal and external feeds and linkages. This offers significant value at an early stage of a replacement project.
Non-Core Processing Legacy systems:
Most insurance companies have dozens of peripheral systems – systems that do not perform core processing, but instead do a myriad of other things, from payroll to commissions, staffing, purchasing, and so on. These systems have accumulated over many years, and often have a wide cross-section of technologies and databases.
You can Modernize these systems without necessarily doing any modifications to the logic at all, you just port the system to a standard server-based language and database. Or you can take advantage of the Modernization process and make some, possibly long delayed, changes. If these systems run on a mainframe, the savings in MIPS cost alone probably drives the business case.
“Non-Classic” Legacy Systems:
These are systems that may not be “classic” legacy systems, but would still benefit from standardization. Relatively modern systems are often prime candidates for Modernization, because languages and databases seem to be experiencing increasingly shorter lifecycles.
Does it matter if your system is written in a non-supported language? The answer to that is a bit like the answer to the question: ‘does it matter if you do not have air in your spare tire?’ The answer is: ‘not at all, until you need it’.
Modernization is a relatively simple way of keeping your peripheral systems on fully supported software and databases. If all you are doing is moving from Language 1.4 to Language 2.1, it is a straightforward change that can be done quickly and at a relatively low cost.
Modernization is a viable low-risk alternative when looking to reduce the risks of out-of-date programming languages and databases, or when looking to reduce the risk of a very large replacement project.
As stated at the beginning of the first article, Modernization has not been widely used in the P&C world, but perhaps it is time to have a look and see for yourself if the advantages are worthwhile.
Peter Symons (Peter.Symons@marinerinnovations.com) is vice-president Insurance Services at Mariner Innovations. an innovative IT services company, as well as Canada’s leading supplier of Application Modernization Services.
Headquartered in Saint John, NB, with regional offices in Regina, Toronto, Fredericton, and Halifax, Mariner Innovations provides professional IT consulting services to Insurance, Telecom, Healthcare and Government organizations.