I have the unique privilege of engaging dozens of our clients and understanding their business goals and how they are looking to wield technology to meet those goals. Many insurers are looking to accelerate the pace with which they innovate with products, optimize pricing, enter new geographies, and expand distribution channels.

They are looking to realize more value from their underwriting, claims, and customer service processes, with greater focus on speed, accuracy, automation, and applying advanced analytics to drive better decisions. And they are looking to drive delightful customer, partner, and employee experiences. Insurers who have moved, or are in the process of moving, their core systems to the cloud see this transition as a means to accelerate the timelines for these initiatives and bring greater agility.

To achieve this greater speed and improved performance and reliability of core systems, insurers are investing significant time and resources into the cloud transition process. But navigating large-scale, complex cloud migration projects successfully requires insurance IT leaders to balance their business priorities with technical needs to avoid any business disruption.

In the session I moderated at this year’s Guidewire Connections conference, insurance IT leaders opened up about lessons they have learned on their own cloud transition journeys.

Best Practices for Cloud Transition Projects

No matter where on the cloud journey an insurance carrier is, it is vital for the organization to optimize the rich functionality cloud platforms and the digital ecosystem provide to drive maximum business value.

1. Align your cloud strategy to your business goals.

One of the most appealing business benefits for insurers just starting their cloud journey is increased efficiency. Rather than waiting for the right time to conduct a core system upgrade, being on a Software-as-a-Service version of a platform enables organizations to adopt new capabilities and upgrade to new releases with limited, if any, business interruption.

Adopting new features and versions more rapidly helps carriers stay more efficient overall, better supporting strategic, growth-focused roadmaps. If expanding into new markets and adding new products are at the top of the roadmap, ensure that those priorities are reflected in the company’s cloud strategy. These priorities may determine the scope of the cloud migration, for instance, or impact the order in which ancillary systems get migrated as well.

Don’t forget to prioritize the technical capabilities like cloud architecture or application engineering that will impact the organization’s ability to leverage cloud capabilities effectively to achieve its business goals. Actively engage with partners from the business to avoid any misunderstandings about timing or which capabilities will be available when. It’s crucial to maintain a two-way dialogue during complex projects.

2. Implement a phased roadmap — and be prepared to adapt.

Be prepared to expand the project timeline to match the business needs the migration uncovers. The strategy and timeline will depend on how many core systems are being migrated, whether there are customizations, and more.

For example, one panelist mentioned that their cloud migration plan, which involved policy, claims, and billing centers as well as a producer and customer portal, was originally estimated to take place across 12-16 months. However, the complexity of the user interface front end involved more rewriting than anticipated, leading to schedule overruns.

Even when things go according to plan, it’s critical to have a plan for — and communicate across the organization — the various phases of a cloud transition. Include phases for initial discovery with business users to learn about existing customizations to ensure no features are lost or unnecessarily abandoned for out-of-the-box capabilities.

3. Ensure you have a plan for data integration.

Minimizing customizations and building scalable systems is a top priority for many insurers. Data integration plays a big role in enabling organizations to be ready for future business needs and additional technology capabilities. But modernizing data capabilities can be its own large-scale effort.

It’s vital to have a plan in place to complete the necessary data integration successfully. This plan should cover reconciling data, mapping data effectively, making sure financials line up, and ensuring there is seamless data flow from all systems. Data strategies can be especially complicated for organizations with some systems deployed on-premises and some deployed on cloud.

One of our panelists noted that it is important to make sure there is enough time invested in a data migration strategy — that it isn’t as simple as moving data from on-premises to the cloud-based platform. There may be version compatibility issues that require upgrades prior to migrating to cloud, and it’s crucial to consider how any existing data warehouses will connect to the cloud platform as well as how existing reporting structures will function.

4. Plan for change management.

Knowing a cloud transition is coming and beginning a cloud migration project are two very different stages. There can be hesitancy on teams and concerns from business stakeholders about what it might mean for keeping processes running as they should. Devoting time to change management is an important tool to help internal teams not just survive a cloud migration but thrive on the other side.

Many cloud-based insurance core systems providers offer certification programs for their platforms as well as training opportunities, which can help insurer team members feel more comfortable with the new technology powering their workflows. In addition, introducing internal stakeholders to systems integrator (SI) partners can help encourage them to learn more about cloud initiatives.

One panelist urged other insurers not to solely rely on written exercises for training, but to engage in the labs available and to let even their most experienced engineers operate in sandboxes to apply what they’re learning and have adequate time to test their skills. This helps teams feel confident with the many phases of a migration project and the numerous changes contained therein.

5. Communicate early and often with your partner(s).

Core systems providers and SI partners have gained extensive experience with cloud migration projects over the last few years. For insurers, the cloud transition is unfamiliar territory; for those partners, it’s their area of expertise. While no two insurers’ systems and architecture are exactly alike, SI partners and core systems providers have experience navigating these projects and can help insurers figure out how to balance business needs with major technology investments.

The key is to establish early on what the insurer team will be responsible for and what the partners’ role will be. For instance, it may make sense for the insurer’s in-house team to handle all integrations while the SI partner completes all necessary testing. Whatever the appropriate workflow, having a clear sense of accountability and working as a unified team helps ensure the project will be successful. A constant communication flow paired with a clear integration and data strategy will lead to success.

transition from on-premises systems to cloud-based core systems is not a simple undertaking. But following the five best practices shared directly from insurance IT leaders can help the migration process be as painless as possible.

To learn more about how braving the cloud transition can yield major business benefits, read our case study “Pekin Partners With ValueMomentum for Multi-State Expansion on Guidewire Cloud.”