Actuarial and Finance Modernisation: The Essential Steps

In this second instalment of our actuarial and finance modernisation series, we'll guide you through the practical steps to help you get started on your transformation. 

While each organisation's modernisation journey is unique, there are common factors and considerations that can set you on the path to success. Let’s take a look…

1. Define your target end-state

Before embarking on your project, defining your target end-state is crucial. Consider your organisation's strategic objectives, capacity for change and budget constraints. Assess the following:

• Data management. Are you looking to establish a unified data platform and architecture with robust enterprise governance? Such a platform ensures data consistency, reliability and security, enabling accurate reporting, informed decision-making and enhanced compliance.

• Core applications. Are you migrating to a single set of core applications, and will you leverage cloud computing capabilities? Streamlining your technology stack and embracing the cloud will enhance data accessibility, reduce complexity and improve collaboration.

• Build vs. buy. Will you procure or construct your core applications? Our recommendation is to procure so you can reduce development time and costs, which, in turn, will benefit timelines and budget. Plus, vendors typically support pre-built solutions, ensuring ongoing updates and support.

• MVP vs. the perfect solution. Prioritise achieving a Minimum Viable Product (MVP) to deliver tangible value to the business quickly. Striving for perfection is time-consuming and expensive. Plus, your organisational needs will likely evolve during the project. Park perfection for phase two.

• Process optimisation. Tailoring processes to your systems and target operating model streamlines operations, reduces errors and enhances adaptability.

• Machine Learning (ML) and Artificial Intelligence (AI). Incorporate ML and AI as integral components of your toolkit to enhance predictive analytics, improve risk management, automate reporting and compliance and drive efficiency.

• Operating model. Consider making changes to your actuarial and finance operating model, such as redefining roles and responsibilities, implementing shared services or leveraging managed services to optimise resource allocation and increase agility.

• Talent acquisition and management. Evaluate adjustments to talent acquisition strategies to ensure you have the right people equipped to work with advanced technologies and drive innovation.

2. Conduct a Current State Assessment

An honest assessment of the current state of the organisation is essential for understanding its capabilities, identifying improvement areas and prioritising your modernisation initiatives. You should cover:

• Data management. How is data currently collected, stored, managed and used?

• Core applications. What applications are currently used for actuarial and finance functions? What are the key strengths and weaknesses of these applications?

• Processes. What processes are currently used for actuarial and finance functions? How efficient and effective are these processes?

• People. What skills and experience do your people have? How well prepared are they for the changes that come with modernisation?

3. Develop a Project Roadmap

A project roadmap outlines the key steps in your modernisation journey that have been agreed to by the business and project delivery team in and should include:

• Major milestones (defined interim states delivering value along the way) that mark progress towards your target end-state

• A realistic timeline for completing each milestone

• The resources required to complete each milestone

• Potential risks to the project and mitigation strategies.

4. Identify Your Execution Team and Key Stakeholders

The execution team is the group of people who will be responsible for implementing the modernisation roadmap. The team should have a mix of skills and experience, including:

• Actuarial and/or finance expertise

• Technology expertise

• Project management expertise

• Change management expertise

It’s also crucial you take into account all stakeholders who will be impacted by the project at any stage, from the project sponsor to end customers/users. 

5. Implement Robust Project Governance Measures

Project governance is the framework and processes used to ensure the modernisation project is executed successfully. Key elements include:

• Clear roles and responsibilities for all members of the project team

• Regular communication and reporting between the project team and key stakeholders 

• The identification and mitigation of any potential risks to the project 

• A plan in place for managing change throughout the project

By following these steps, you can kickstart your organisation's transformative journey, positioning yourself and your team for success.

Modernising your actuarial or finance function

If you're looking to modernise your actuarial or finance function, Brighter Consultancy can help. Our experienced consultants can assist in assessing your current state, developing a modernisation strategy, implementing it effectively and supporting your employees during the transition. Contact Immy Pandor today to learn more about how we can help you modernise your actuarial or finance function.