Benefits of losing your legacy system

What are legacy systems & why are they bad?

The term legacy system gets bandied about a lot. Exciting new insurtechs view any technology not created in the lasts 5 minutes as legacy. But that’s not the whole truth of it. A legacy system should describe any technology that consumes lots of time in processing workflows or general administration and is difficult to update. In the language of insurance, a legacy system is one that holds a broker back from finessing their existing products or launching new ones.

There’s actually some older tech out there that works very well and doesn’t really need to be updated. Legacy tech just describes systems that don’t work well, not systems that are old.

It should be easy enough to see why legacy systems are bad.

So why not change them?

Changing systems is perceived to be a major headache and business risk. This in itself is quite a dated view. Not only has technology improved in the last 10 years but so has project management and migration. The process of change is much easier than it is often thought to be.

Legacy systems, by their very definition, are holding businesses back. So changing them, and finding the bandwidth to change them, is critical. There are two key elements to consider:

1. What do you want from your new system?Answer this by considering where you’re held back at the moment, but also looking to see what is out there. Try to be led as much by what new systems are designed to do (and find one that fits your business) than moulding the system around what you want to achieve.
2. Data migrationData transfer is only as difficult as access to existing data makes it. The chief problem with data is not getting it into a new system, but getting it out of your old one. Even before you consider your new system, ensure you have good access to your existing data and do a data cleanse exercise to make sure you have key information such as email addresses for every record. Make this part of your client interaction scripts for a year beforehand to ensure you’re as ready as you can be.

Moving systems also doesn’t have to be a big bang approach. Pick a product or area that you want to change and do it gradually if that makes more sense.

What are the benefits of changing?

When you’ve implemented a new system to replace your legacy system you’ll have new challenges to focus on.

Your processes will be much more efficient and automated so staff that were engaged in admin will need to be repurposed and sometimes retrained. This can bring a renewed focus on quote-to-policy conversion to maximise marketing budget, or improved customer service. The end result will be better renewal retention and brand perception.

Your business development resource will also be freed up from BAU firefighting and can begin to look at new product lines and business expansion. Plan for this as part of your longer terms software strategy.

Replacing a legacy system is a daunting process but often easier than it first appears. If you’re being held back by tech then take advice from systems providers and start the transformation process.