Platform consolidation seems like an obvious thing to do. Having two or more systems performing the same function increases operational and maintenance overheads, makes change more difficult, and introduces risk. And yet, platform consolidation is one of the greatest challenges facing organisations today.
There are many reasons that companies end up with duplicate systems:
- Mergers and acquisitions.
- Changes in vendors or service providers.
- Legacy systems.
- Shadow IT and other organisational dysfunctions.
And there are many reasons for them to consolidate when they do:
- Support and maintenance costs.
- Operational overhead.
- Data inconsistencies.
- Integration challenges.
- Improved customer experience.
Platform consolidation projects have the potential to make or break organisations. The Australian superannuation industry bears some residual trauma from the failure of Superpartners in 2014, when what was supposed to be a $70 million project ended up costing over $300 million and led to the distressed sale of that company. Despite the substantial cost-overrun, the project was still a long way from done. Juxtapose this with the Commonwealth Bank’s core banking modernisation completed in 2013. Notwithstanding its own considerable cost blowout — CBA spent roughly $1.5 billion against a budgeted $580 million — the initiative is widely lauded as a success. Commonwealth Bank’s enduring lead in technology on the rest of the Big 4 can be in part attributed to the fact that they undertook it.
So, how do you ensure that your platform consolidation project is more CBA than Superpartners? Novigi staff have been involved in dozens of major platform consolidation projects. Drawing on all that experience, here are our top tips for success.
Planning
If you don’t compile a plan for your platform consolidation project, you won’t be able to cost it. If you can’t cost it, the board will have no basis for crucifying you when the project blows its budget by a factor of three. Because there was no budget.
Tragically, uncosted business cases tend not to get approved, so plan we must.
In the planning phase, we find that a few (perhaps) non-obvious things help a lot:
- Scope on a page
The benefits of having a pretty picture that summarises the scope of a project can hardly be overstated. In superannuation mergers and administration transitions, we’ve found that having a single visual is the best way to prompt a large cast of subject matter experts to tell you what you’ve forgotten. With the focus on registry systems in superannuation, many other aspects are commonly overlooked: like historical data requirements, correspondence, workflow, complaints and incidents, and financial operations.A scope on a page is also an effective tool for referring back to the original scope when the project starts creeping away from it — which it invariably will. - Taking Day 2 planning serious
Deferring activities to “Day 2” is an inevitable part of any planning exercise. Taking Day 2 seriously means being conscious that these activities cannot simply be dumped on business-as-usual operational staff once the consolidation-proper is complete.It’s common for Day 2 to be uncosted and under- or unresourced — this prevents already eye-watering funding requests from looking even worse. However, doing this can result in a long tail of issues that persist years after a platform consolidation project finishes, eroding the benefits of consolidating in the first place.
Delivery methodology
It may be a hard pill to swallow, but platform consolidation projects often required fixed scope and timelines. While we support agile methodologies, they are not always suited for these types of projects. It may sound old school, but platform consolidation projects necessitate thorough documentation and meticulous project plans. Agile methodologies, while optimal for subsequent activities with evolving requirements needing flexibility — such as data migration — introduce too much uncertainty and variability for a process that requires a strict control and precision.
Data integrity and reconciliation
Ensuring data integrity and accuracy through reconciliation is crucial in platform consolidation projects. Robust governance should include clear data ownership and repeatable validations that provide a trackable measure of quality for each iteration of the data migration. It should also foster collaboration between project, technology and operation areas to address any data discrepancies.
Effective communication and transparency among stakeholders are vital for addressing any data issues promptly. Regular updates, reporting of discrepancies, and collaborative problem-solving ensure data quality is not compromised and sponsors understand the impacts when approving “go-live” positions. By prioritising data integrity and reconciliation, organisations can achieve a seamless transition to a unified platform, minimising operational disruptions and maximising the benefits of consolidation.
This article was produced as part of The Quarterly – Data and Technology in Superannuation, Q4 FY24
For more information about anything you’ve read here, or if you have a more general inquiry, please contact us.
Key Contributors:
Kevin Fernandez is General Manager, Market Strategy and Propositions at Novigi, and is based in the Melbourne office.
Sophie Bowen-James is an analyst in the Market Strategy and Propositions team at Novigi, and is based in the Sydney office.