The pension sector is facing fundamental changes. On the one hand, the new Dutch pension agreement has recently been finalized. On the other hand, we see that the current legacy systems have trouble transitioning to the new pension agreement.
91% of pension providers need to switch systems or change IT solutions
As the sector prepares for the future, we see that 91% of pension providers need to switch systems or change IT solutions . Why is this? The functionality of these systems is built to serve extremely specific functions. The present-day functionality won’t be able to adequately address the needs of the new situation.
Pension providers are now confronted with three main options:
Transform their current, self-built pension IT solutions
Choose a new (package) solution or
Build a platform, solution, etc. with other parties or suppliers. For example, pension providers joining forces
5 common pension IT pitfalls to look out for
When you are selecting a path to follow for decades to come, the stakes are high. It is understandable that providers may feel more secure focusing on systems they already know or begin to build things from scratch.
However, this desire for involvement can lead pension providers to overextend themselves as they underestimate what these endeavors end up requiring. How can the pension sector achieve success in its IT projects? First things first: Acknowledge the current context and the necessary changes ahead. Next, prioritize both people and technology. In this blog, we first zoom in on the technological missteps -and opportunities- for pension IT projects. Below are five observations made by IG&H that prevent IT projects in the pension sector from achieving their full potential.
1) Technical distance – IT and technology are not seen as the heart of the organization, but as an issue from the IT department. Meanwhile, pensions are a fully digital product.
Tip: Start at the top of the organization. Realize that IT is the backbone of the organization. Create structures that ensure alignment between business and IT, since this is crucial for a successful transformation.
2) Aimless IT – Without an IT strategy and target architecture, organizations will experience a wild growth of systems that do not connect well with each other or overlap in terms of functionality.
Tip: Put in the effort and gain a bird’s eye view now. This will save you a lot of resources down the line. Make sure you have guiding principles that you use as a measuring stick when you make IT choices and understand where your current applications stand in their lifecycle.
3) Underestimating integrations– Integrations are almost always the most difficult part of these kinds of projects due to the systems’ dependencies, especially with legacy parties.
Tip: Identify what integrations you need and which parties are connected. Involve these parties in your plans early on. This way, you have capacity reserved on their side but also have a clear understanding of what can and cannot be done. Work smarter, not harder. Explore options like low-code and/or API’s.
4) Testing is an afterthought – Not only is there often not enough capacity to test if it works but there is no plan created beforehand.
Tip: Create a test plan that specifies what you are going to test. Include which measures and which test results are considered unacceptable. Determine who needs to perform these tests. Regarding time management, take into account that sometimes changes need multiple iterations
5) Doing everything at once and over-complicating things – Simultaneously changing the pension schemes, migrating data to a new platform, implementing new IT, reorganizing the company and running the current business is an enormous challenge. When you add overcomplicating by integrating all exceptions of the ‘old world’ into the new system, it becomes an almost impossible task.
Tip: Reason back from the target situation and assess whether it is possible to move certain activities forward or backward. Also make a distinction between the desired scenario and the minimal scenario, so that choices can be made when necessary.
Scalability and flexibility help IT projects achieve their full potential
Whether you are transforming, choosing a new solution or building from scratch: scalability and flexibility are paramount to making this epic IT transition a success for the pension sector. IG&H offers cloud-based administrative software for the pension sector, called AllVida. This solution is both scalable and flexible. We differentiate between functionality and configuration. The functionality of AllVida is ready for the new as well as the old pension schemes, we only need to add the specific configuration.
IG&H uses Low-code technology to make sure we can integrate easily into every IT-landscape. That means you benefit from flexibility and reliability. Whether you are looking for a specific component to compliment your existing IT setup or would like the full end-to-end solution, our product IG&H AllVida will fit into the picture. Finally, regardless of which IT approach your organization takes, factoring in humans is vital.
Pension IT projects are nothing without adopters and users
Ironically, unsuccessful IT endeavors often have more to do with people rather than technology. When pension providers switch systems or change IT solutions, the organization must take this into account. Aligning business with people and technology is the solid foundation to make these IT projects a success. In our next blog, we will cover five important points for successful IT projects in the pension sector from an organizational perspective.
Would you like to find out more about successful IT projects in the pension sector?
You can reach out to
T: 06 12 88 74 72