Mastering Financial System Integration Post-Merger: Proven Strategies for Success
Mastering financial system integration post-merger: Proven strategies for success
Mastering financial system integration post-merger: Proven strategies for success
The key to streamlining financial system integrations post-merger
Mergers and acquisitions (M&As) among insurance firms can be fraught with difficulties, especially when it comes to the finance department. Finance leaders drawn into an M&A face unique challenges, not the least of which can be integrating two disparate financial systems.
When a large insurance firm acquires a smaller one, the integration process can be particularly problematic. Large firms are known to rely on front-end legacy systems containing policy data scattered over various global ERPs and operating systems. The interfaces established therein have usually been emplaced over time. When a smaller firm gets absorbed by a larger firm, transitioning those legacy systems to work with the new system (typically a local ERP with associated applications) can bog down post-merger progress indefinitely.
EXL recently worked with a North American global property and casualty (P&C) insurer that acquired a smaller insurance firm. The task of integrating the newly acquired firm’s data into the larger, central reinsurance system posed a number of immediate challenges.
- The client had limited knowledge of the acquired business, leading to high dependency on the incumbent vendor that was tasked with the initial system migration.
- There was risk associated with certain knowledge held by the existing vendor team.
- Attrition on the vendor's end caused transition and migration challenges that delayed progress toward functional operations.
- Managing the system migration concurrently with other organizational process transitions further complicated a smooth hand-off.
- Not understanding the nuances of the incumbent vendor’s migration approach impeded mission success.
EXL began the engagement with an end-to-end assessment of the systems, processes, and data structures currently involved in transition, identifying trouble spots and documenting the findings as part of a comprehensive integration roadmap. From there, the plan was executed using EXL’s proprietary migration approach, SMARTX, representing a Systematic Methodology, Approach, and Rigor to Transitions Excellence. The step-by-step plan resolved technical issues, including data mapping, data cleansing, validation, system operations, and security matters across the merging platforms. End-users and stakeholders were engaged in a change management program that ensured widespread familiarity and adoption of the transformed environment. Backup, recovery, and other contingency plans were put in place, along with testing, monitoring, and audit procedures, to keep the program on track and minimize risk. As well, a full sweep of applicable regulatory requirements and industry standards was conducted, to maintain proper governance throughout the transition.
In the end, the integration of financial systems between the two merging entities was completed seamlessly, with zero surprises, according to the agreed timelines. All final processes were documented to ensure continued, streamlined operations. And EXL remained onboard to support the migration across all affected regions, leading to a successful system integration.
There is no need for the finance department to lose sleep over the details of a major M&A. EXL has the proven industry domain experience, tools, and expertise to help you get the job down, on time and in budget.
Read our whitepaper to unlock the insights on post-merger integration in the insurance sector. Learn from real-world case studies and industry insights to address the top financial integration challenges.