How to increase your value through the Software Development Lifecycle with the support from EY

Insurance companies are increasing their efforts toward digitalization to provide clients with exceptional digital products and services, sometimes with scarce results due to quality issues

In brief

• Insurers are increasing their investments in technology transformation to provide clients with exceptional digital products and services.
• Quality throughout the Software Development Lifecycle is too often underestimated by insurance companies.
• EY teams are helping insurers shift their focus to quality, putting the emphasis on company value increasing through targeted software development quality enhancement actions and continuous operational improvement.

With the latest developments in technology, digital transformation, and the disruption caused by COVID-19, insurance companies have become more eager to offer their customers simple, faster and easy-to-use digital products, tools and services. This is leading to an increase in the investments toward digital transformation programs, new emerging technologies and ecosystems.

About two out of ten companies have increased their investments in technology in 2022 to raise economic productivity by automating manual processes, enabling innovation and reducing costs.

Today companies’ challenge in dealing with digital transformation is to keep quality at high level throughout their Software Development Lifecycle (SDLC).

The SDLC is a framework that defines the various steps involved in the software development at each phase. It covers the detailed plan for software creation, distribution and maintenance, defining all the activities involved in planning, creating, testing and distributing a software product. The Software Development Lifecycle itself defines a methodology for improving the quality of the software and the overall development process; its goal is to produce quality software that exceeds customer expectations, meets deadlines and reduces costs.

Adherence to the SDLC process leads to software development in a systematic and disciplined way, allowing for value creation.

The SDLC is composed by six main phases, often defined more in detail by companies:

1. Needs identification and prioritization and requirements’ collection

During this phase, all relevant information regarding customers’ and company needs is collected to develop a product according to their expectations. It is fundamental to define who will be the end user, what is the purpose of the product, what needs to be developed and with what priority. Once the requirements have been collected, an analysis to verify the feasibility is performed, and detailed documentation regarding the product or feature is created.

2. Design

In this phase, the requirements collected in the analysis documents are used as input, and the software architecture used for the implementation of the system development is derived.

3. Implementation and coding

Implementation begins once the developer gets the design document. The software design is translated into code. All software components are implemented in this phase.

4. Testing

The test phase begins once the coding is complete, and the modules are released for testing. The functional test, integration test, no regression test, etc, are performed to ensure that the product/ features have been implemented according to requirements. The performance test, stress test, penetration test, etc, are executed to ensure that the software conforms to the pre-defined standards.

5. Delivery

Once the product has been successfully tested, it is deployed for production.

6. Maintenance

After the launch of a product in the production environment, the maintenance team takes care of it in case any problems occur and provides fixes or improvements to the product.

As of today, many insurance companies are struggling to be systematic and to correctly adhere to all the SDLC phases, and consequently to provide quality along their Software Development Lifecycle. A siloed organization, lack of a single vision on the product, unclear processes and the absence of an overall governance on their operations lead to less attention on the SDLC, inefficiencies and poor quality of the delivered solutions.

In EY we have conducted several assessments of the SDLC topic on insurance companies and we claim a wide experience along each step of its value chain. According to our research, the main reasons for poor quality throughout the SDLC in insurance companies are related to:

• Lack of a compelling strategy and vision of what must be achieved, company initiatives often are not linked to the strategy
• Unclear processes, roles and accountabilities throughout the organization and lack of automation
• Inefficient test strategy and techniques and lack of automated testing
• Lack of effective delivery tools and pipeline automation
• Ineffective communication throughout the organization and lack of knowledge and best practices sharing
• Ineffective agile organizations unable to benefit from reiteration and continuous improvement
• Poor governance and monitoring of the SDLC, processes, metrics and KPIs

In EY we have built an observatory to monitor market developments and companies’ maturity throughout the SDLC, determining best-in-class tooling, metrics, KPIs, routines and controls..

We have developed a proven methodology to help Insurers to:

• Assess the Software Development Lifecycle state to understand the effectiveness of current processes and spot weaknesses.
• Define a compelling strategy and vision of what must be achieved and ensure each identified initiative is linked to the strategy.
• Redesign standardized processes across the organization and leverage their simplification.
• Provide market insights and industry updates on new technologies and guide them to take the right investment decisions.
• Define an actionable process automation plan to increase simplification and ensure delivery quality.
• Enhance testing techniques and set up a portfolio-based test strategy.
• Empower agile organizations to allow for reiteration, velocity and continuous improvement.
• Set up effective communication plans throughout the organization to improve internal knowledge and best practices spread.
• Strengthen governance functions to ensure continuous monitoring of the SDLC, processes, metrics and KPIs.