Pension administration system implementation projects are long and complex. It’s natural to focus narrowly on the readiness of the system; that’s why the project is undertaken. However, there are many non-system areas of readiness work that are just as essential to success as the readiness of the system itself. Often these preparations are given low or no priority, but if any one of them is not ready or simply overlooked, the whole project may be put at risk.
Some of these areas include aspects of staff member and internal stakeholder readiness, data readiness, user support readiness, external stakeholder readiness, plan sponsor readiness, management of deferred functionality, and decision-maker readiness (at the Go/No-Go decision point). We will address four of these critical areas, the risks associated with them, and present some possible mitigation strategies.
Staff members need more than just system use training. Software vendors will typically provide that in their scope of work. But what they usually cannot provide is the development of and training on new operational processes in which the system will play a part. Your staff members must be ready to use the system in the context of the new business operations model, which goes far beyond navigating and clicking buttons. Transitioning from an older legacy system to a new, automated tool introduces new processes; you do not want your staff members to be unable to complete a task because they do not understand its context within a larger business process. Without the development of end-to-end business processes and proper training, staff are likely to have difficulties, especially under stress, and then lose trust in the new system, impacting productivity.
Developing a future state target operating model is an important migration strategy. It is paramount that staff members are given operational process training in conjunction with system training. The best time to start developing new operational processes is in the very beginning of your project, based upon your business objectives. These processes are then carried forward as early models, and they are modified and expanded throughout as the new software is developed. When your system is ready, so is the operational model in which it will be used.
Many difficult data decisions must be made in the course of pension administration system (PAS) projects, and your organization needs to understand the full operational impact of each one in the context of your new system’s operation. The only way to make an educated choice is to have a clear and detailed understanding of your data. If data is not complete or accurate enough to support business functions (which is typical, as newer automations usually require data points that may not have existed in your legacy system, or greater levels of detailed historical completeness to function well), your system may not work as expected. Imagine the ramifications of inaccurate benefit calculations that impact a portion of the population that aren’t immediately recognized.
Data validation and cleansing should start in the early stages of a project. It is your responsibility to ensure that the legacy data is correct, not the vendor’s. This is time-consuming, critical work that must be complete before the data can be converted.
Members and employers are the most important external stakeholders, but external business partners like actuaries, auditors, custodial banks, and third-party administrators must also be ready for go live. If you do not communicate to these business partners what’s changing because of your project or you don’t understand the impact on these stakeholders, they may be unable to support your future vision and your project may be perceived as a failure. By not engaging these stakeholders, you run the risk of recreating the legacy process in the new system, thereby missing an opportunity for optimization.
Your organization’s entire implementation may be put at risk if needed optimizations cannot be realized because external stakeholders’ needs are poorly understood. For instance, you may want to take advantage of a banking service that you did not previously use. Banks will typically need significant lead time to participate in testing, and vendors will need to incorporate this testing into their implementation plan. If you fail to communicate clearly and early with banks, you will run the risk of incorrect integration files potentially delaying your project schedule.
The formation of working groups that bring external stakeholders to the table early in a project will both help you understand what constraints these partners have and help them to understand the how your project may improve their operations. Employers and actuaries are two good examples of external stakeholders who will benefit from system modernization and improvements to the data sets.
“We’ll deal with this after we go live.” This sentiment is prevalent on many projects because of deadlines. In these situations, required functionality will be delayed to a future release and workarounds will be defined when necessary.
Delaying “go live” vs. delaying functionality can be one of the most important questions in any implementation project. It is not unusual that certain functions such as large annual processing will be deferred with enough lead time before the functionality is needed. However, processes that must be executed regularly cannot be deferred without a viable workaround and significant impact analysis.
The management of mid-stream cases, called “work-in-flight”, is further complicated by the need for temporary workarounds. It is critical to consider these temporary processes when planning the work-in-flight strategy. Not doing so will adversely impact member service and frustrate staff.
Going live with a workaround is not as simple as it may seem. It requires complete design, detailed documentation, and staff member training on the temporary process. You will also need to plan the sunsetting of the workaround when functionality is ready to be implemented after “go live”, including another round of work-in-flight planning. It is also very important to have a realistic understanding of the total staffing required to support the workaround. Failure to do so can result in the accumulation of backlogs and further frustrations.
PAS projects are challenging. Going live with a new core system is a project that pension administrators generally face only once in a career. Remember that although your new automation system may be ready, there are many parts that require careful planning and work to ensure a successful “go live”.
Linea Solutions has been providing strategic guidance that has improved our clients for over 20 years. We would be happy to meet with you virtually to discuss what type of assessment would be ideal for your organization. If you have questions about the best way to improve your organizational efficiency, contact us to see how we can help.
Linea Solutions has been providing strategic guidance that has improved our clients for almost 25 years. We would be happy to meet with you virtually to discuss what type of assessment would be ideal for your organization. If you have questions about the best way to improve your organizational efficiency, contact us to see how we can help.