Insurance Networking News

Divining Insurers’

Migratory Motivations

A new survey assesses the state of application modernization and migration.

Cost containment and a need to ensure future technology compatibility are the driving factors behind modernization and migration efforts, a new study finds. Cary, N.C.-based BluePhoenix Solutions commissioned Forrester Consulting, Cambridge, Mass., to survey the attitudes of 100 North American firms in a broad range of industries, including insurance, about their migration plans.

With ongoing operation and maintenance costs (66%) far outstripping the costs of new software initiatives and projects (35%), the survey found IT leaders anxious to excise waste from their application portfolios and to create more homogeneous technology stacks. As the specter of the labor costs for maintenance becoming costlier as babyboomers reach retirement age and certain skills become scarcer, the overall cost of servicing legacy technology going forward was prominent in respondents’ minds. Indeed, fears about the current (27%) and future (29%) availability of skilled resources were cited among top drivers for migration efforts.

The current economic climate was also a motivator, with IT leaders indicating that maximizing the value of existing software assets is now a top priority. Respondents cited the economy as a primary driver for increased emphasis on migrating from languages, platforms and databases, and on retiring duplicate/obsolete applications.

The numbers also revealed that modernization budgets remain healthy, with 86% of firms queried indicating that they have allocated 10% or more of their IT budget for modernization. INN

What percentage of your IT budget is earmarked for both modernization and migration activities?

14% 5-9 percent

20 percent or more 25%

10-19 percent 61%

Less than 5 percent 0%

Migration from languages, platforms and databases Will reduce: 21% Will increase: No impact: 25% Development of new custom-built applications Will reduce: 32% Will increase: No impact: 19% Retirement of duplicate/obsolete applications Will reduce: 28% Will increase: No impact: 25% Existing packaged-application upgrades Will reduce: Will increase: No impact: 20% New packaged-application implementations Will reduce: Will increase: No impact: What effect will the economic downturn have on IT initiatives?

54%

48%

47%

34%

46%

29%

25%

46%

Reduce overall operating cost or redundant licenses Reduce time/effort/cost to add new functionality Eliminate obsolete technology Risk of future technology compatibility Desire to reuse business logic as part of SOA Current availability of skilled resources Fear about future availability of skilled resources Loss of knowledge about applications