In my recent client engagements, I’ve discovered that increased flexibility (in product development / deployment, mobile capabilities, back office integration, etc.) is still top of mind. But, as organizations weigh options for meeting their specific business needs, tailored, custom build efforts may be required when system replacements or refacing/modernizing front ends fail to meet long term business objectives.
Often times, proposed modifications are defined to bolster existing systems as a short term, quick win solution, until a more permanent solution can be afforded.Carriers who elect to undertake custom build efforts in-house are faced with balancing the following resource challenges:
- Retaining full-time resources with sufficient expertise in both initial custom development and ongoing maintenance efforts.
- Enlisting external consultants who have both System Development Life Cycle (SDLC) expertise and significant industry expertise.
Either approach drives the carrier to consider the cost of ensuring quality design and development practices against tight budgets and competing business priorities.
Although a quick fix enhancement may seem to be the cheapest route, a Software Productivity Research study from 2010 found that a patch is only less expensive through the early rounds of coding. After that, it is significantly cheaper to code — and significantly more cost effective to maintain — for the longer term solution.
Most concerning is the tendency for organizations to prioritize the short term objective without fully considering the potential long term ramifications. I can see the value of targeted modifications to existing systems for a short term, short expected lifecycle goal. However, it seems that regardless of the intended short term lifecycle for these “Band-Aids,” the modifications are exercised years longer than planned. The term “technical debt” has been top of mind in many discussions I’ve had recently, where we face the challenge of helping carriers fully scrutinize their options and understand the consequences of their decisions. Carriers performing more internal development need to understand that any short cuts made for an immediate patch MUST be structurally reworked in order to repay the technical debt instigated to get the fix up and running.
For example, in one instance, an organization has been weighing options to achieve a business goal given several unknown future factors. Options included expanding an internal system – which evolved through bolt-on requests and had become a critical system – or building these capabilities within a new system. The technical debt factor was paramount in this case, as the expected lifecycle of the selected solution weighed in heavily. Given the uncertain future state, a short term solution may work for a year or two, but the probability of a three+ year expectancy drives a far more strategic approach. Any short term patches made to the existing system would become exponentially more costly to support as the system remains in use.
This doesn’t mean that there can’t be quick fixes applied to meet an immediate need, but carriers should look beyond the next quarter and evaluate their debt repayment plan before making the decision to implement a quick fix. Nearly every carrier I’ve worked with has an internal system that grew to be a critical platform and now requires full time business and IT resources purely for maintenance alone. As the cost to maintain such a system grows, so does the cost to replace it. Carriers must consider the true long term benefits and ramifications of their development efforts and make strategically sound decisions to meet both short term needs and long term business goals.