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Ensuring the long-term sustainability of the IT estate

A unique hybrid approach to core product platform transformation

OVERVIEW

Most life, pensions and investments (LP&I) providers face huge challenges with their legacy IT estates: Five or more product platforms are the norm, but some providers have more than 10. Managing blended platform portfolios like these creates a whole range of problems. It’s a heavy millstone around the industry’s neck and it’s getting heavier all the time.

The silver bullet, craved by everyone, is a "big bang" migration of the existing book from the current platform portfolio onto a single, new, low-cost and future-proofed platform. Unfortunately, most of these migration attempts either fail or fall far short of expectations.

The solution? A unique hybrid approach that combines modernisation with migration. It’s an approach that’s already been deployed across several industries and realised some impressive results:

  • 30-50 percent savings in IT operating costs

  • 20-40 percent reductions in IT cost of change

  • Up to 40 percent improvements in agility

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Take a look at our insurance blog for more industry insights from our insurance managing directors

A MILLSTONE AROUND THE NECK OF THE LIFE, PENSIONS & INVESTMENTS INDUSTRY

LP&I product providers are burdened with a millstone that impacts the long-term sustainability of their IT estates: The majority have a portfolio of at least five product platforms built up over time, while many have over 10 platforms to operate and sustain.

The challenge facing LP&I product providers is finding a solution to the legacy “millstone” that is sustainable over the long term in cost of ownership, change agility and underlying risk, while simultaneously delivering the right platform(s) to power the future needs of the business.

To identify the right solution, companies should look through two lenses:

  • Active—core platform(s) capable of supporting current and future propositions

    Key features: flexible, agile, low and variable cost, modern technology, digitally enabled

  • Closed—sustainable and rationalized set of product platforms to drive value in the existing book

    Key features: low-risk, low and variable cost, quick to change

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THE CHALLENGES

1


Establishing a target platform capable of supporting the diversity, complexity and structure of existing products

2

Maintaining new revenue generation priorities alongside the migration programme.
3

Managing operational and risk levels on the new platform.
4

Preserving data quality and supporting minimum data
5

Testing the new platform, functional development and migrated data at the end of the project life-cycle. This is the moment of truth for a migration.
6

Coordinating stakeholder contributions from across the business, including operations, actuarial, finance and propositions.

AN ALTERNATIVE APPROACH

Accenture has developed an alternative approach designed to solve the millstone challenge. Far from being one-size-fits-all, we tailor our solution based on each client’s investment and risk appetite, taking into account the existing IT estate and any relevant business drivers.

CONTACTS

David Hughes

David Hughes

Senior Manager, Accenture Life,
Pensions & Investments
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Neil Ratcliffe

Managing Director, Accenture Life,
Pensions & Investments
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