Many core platform vendors overpromise during the sales process, only to end up underdelivering and leaving insurers over-budget and beyond deadlines. Insurers invest huge amounts of manpower and money in these systems, only to end up being dependent on them. Carriers in this situation often end up allocating large portions of their annual budget to major legacy system fixes and upgrades that could easily be avoided by integrating with a modern, cloud-native platform. When considering a vendor, carriers can watch out for three telltale signs that a vendor won’t meet their expectations.
Three Ways to Tell Your Core Platform Vendor Can’t Deliver on its Promises
According to McKinsey, large IT projects run 45% over budget and 7% over time, while delivering 56% less value than predicted.
We’ve all heard promises from salespeople and even engineers. Glossy pamphlets and presentations can impress even the most seasoned executive. But the reality is that IT projects rarely deliver what they promise. The good news is that there are certain red flags to look for when choosing a core platform provider—telltale signs that most likely the project would end up a part of McKinsey’s statistics on large IT projects.
Their platform relies heavily or fully on no-code software
“Low-code” and “no-code” are hugely popular buzzwords in the insurtech space right now, and for good reason: no-code software offers myriad benefits, including democratization of software development and a very low barrier to entry. But for the complex world of insurance, there’s good reason to be wary of basing your system on low-code software.
Here are two problems that typically arise:
- An insurer designs their system using the low-code/no-code software. They make changes, customize the look and feel, and make the solution their own. But the platform fails later when an upgrade releases—or something breaks and the vendor doesn’t code a fix for the customization.
- The insurer needs to expand functionality beyond what the no-code solution can provide. In this sense, no-code software limits the creativity and development needed for innovation and often makes scaling prohibitively expensive if not impossible.
If your core platform vendor says it can build an entire product from user experience to back-end operations using no-code design, this is a sign it probably won’t deliver on its promise. In insurtech, the required back-end operations are simply too complicated for this to work.
Their platform has a gorgeous front end but a shoddy back end
The front-end user experience is a key feature of any platform. But without a fully or properly developed back end to power this experience, it will soon fail in the face of complexity and the need to scale. Many core platforms quickly deteriorate once pushed past basic functionality because the vendor hasn’t yet solved the problem of handling the data first.
Your core platform provider needs to have a robust framework to support integrations and front-end features. Without this, the platform will break once stressed with peak usage volumes and multiple users.
They lack a formal sprint schedule
Your platform vendor will provide a schedule of releases and deployments. But use caution if the vendor doesn’t have a disciplined sprint schedule. Without a predetermined schedule, it’s easy to waste time planning the process rather than taking action to implement a new core platform.
Ask about how your core platform vendor plans to deliver on its promises to meet deadlines. If they don’t have a disciplined and clearly laid out sprint process, it could be a sign the vendor can’t deliver on its promises.
Don’t Ignore the Red Flags
Resist ignoring these warning signs just because you’ve already spent a certain amount of time getting stakeholder buy-in for a particular vendor — or you’ve already progressed in the negotiation process.
If your core platform provider is promising to meet unrealistically tight deadlines while also providing a great user experience with a simple, no-code platform, chances are this vendor can’t deliver on its promises, which will harm both you and your stakeholders
Carefully consider the claims your vendor makes. If they seem too good to be true, they probably are. And if they don’t have any success stories to share, that’s another sign that this particular core platform provider isn’t the best choice for you.
Insurance back-office complexity is challenging, but Socotra can handle it. In fact, we’ve partnered with other core platform vendors to provide their back-end support so they can grow and scale easily—no over-promising, no under-delivering.
To find out more, schedule a demo today.
