{"componentChunkName":"component---src-templates-news-article-index-tsx","path":"/latest-insights/article/migration-from-legacy-common-challenges-best-practices","result":{"data":{"cmsNews":{"id":"a0a58de9-3daf-52b6-8665-398b9dfed41d","slug":"migration-from-legacy-common-challenges-best-practices","type":"default","title":"MIGRATION FROM LEGACY: COMMON CHALLENGES & BEST PRACTICES","excerpt":"What prompts institutions to finally replace their legacy systems and what are the success factors when embarking on that journey? asks J...","body":"<p><strong>What prompts institutions to finally replace their legacy systems and what are the success factors when embarking on that journey? asks Jo Triest, Ohpen Belgium&rsquo;s managing director </strong></p>\n<p>What is it that finally prompts financial services companies to replace their legacy systems? Tough decisions have often been put off; old systems have been patched up and given a stay of execution. However, today&rsquo;s sector is faster moving than ever before. Customers expect the same convenience and speed as they experience in the rest of their lives. The high costs, lack of resources, manual workarounds and limited functionality of those old platforms, plus their closed nature, make them ever less suited to this digital era.&nbsp; &nbsp;&nbsp;</p>\n<p><strong>Trigger points</strong></p>\n<p>One reason legacy system replacement can often finally be triggered is lack of automation. This might be due to increased volumes and/or complexity. There is often scope to bring much greater levels of automation to resource-heavy areas such as management of direct debits or contractual rate revisions.</p>\n<p>Lack of straight-through processing also has competitive implications where rapid decision-making is paramount. The ability to provide loan approvals in minutes, not hours or days, becomes an important competitive advantage. The application process can become a fully digital one, with greater levels of self-service for customers and calls via the API layer to third-party sources for related data and documents.</p>\n<p>Another competitive element is time-to-market for new products and the ability to tailor offerings for particular customers or customer segments, providing timely and relevant offers at the moment they are needed. This puts a lot of pressure on old systems, where their monolithic and hard-coded nature means long lead-times between planning and delivering new products.</p>\n<p>Regulatory requirements only increase and might be another factor, while the loss of internal expertise and the inability to access external resources is also a common factor.</p>\n<p><strong>The replacement challenges &ndash; real and imagined</strong></p>\n<p>Firstly, it doesn&rsquo;t need to be a &ldquo;big bang&rdquo; rip and replace. Components can be introduced that relieve some of the pain points and allow a phased migration. Functionality or loan books can be moved across in a planned, risk averse manner, with lessons from one phase then passed to the next.</p>\n<p>There is also a belief that, for all the issues, at least the legacy systems are understood and constitute a good fit. However, the configurability of today&rsquo;s modern systems mean that they can be much more easily molded both to the current processes but also to better ways of working.</p>\n<p>At Ohpen, in any project, we would look to set up a sandbox environment within a few weeks of the start of the project. This gives customers early hands-on experience with the system and allows it to be configured on a partnership basis. The project can use a prototype model, with fast feedback loops, thereby avoiding later unwelcome surprises. In parallel, users gain important training from the outset of the project, familiarising themselves with the new system.</p>\n<p>That configuration can either initially be for a &ldquo;like-for-like&rdquo; replication of current processes, with a reengineering of these towards best practice after the go-live, or that reengineering can be done as part of the implementation. &nbsp;&nbsp;</p>\n<p>Integration is a focus from the start of any project and can be a challenge, particularly where the existing interdependencies are not well understood. The Ohpen platform uses REST API web services that make for a much more open environment.</p>\n<p><strong>Data Migration &ndash; a project headache?</strong></p>\n<p>Then there&rsquo;s data migration. So long as this is done in a planned, methodical way, using a framework approach, it need not be the headache that many assume. Whether it is onboarding a new loan book onto the existing system of a service provider or the replacement of a legacy platform at an individual lender, Ohpen&rsquo;s experience shows that it can be a relatively automated and painless process.</p>\n<p>The size of the data migration is not important, it is the quality and complexity of that data. It is perfectly feasible to complete a migration in a couple of months. This is true even for an area such as buy-to-let lending, with likely considerably more data and complexity than, say, a straightforward consumer loan. For a buy-to-let book, there could be complex structures related to collateral or multiple borrowers, for instance.</p>\n<p>There are other factors to consider. In particular, there might be a lack of knowledge and documentation within an institution about the legacy platform, which can add to the challenge.&nbsp;</p>\n<p>There are also decisions to be made, such as whether to take a snapshot of the loan book or migrate on a phased basis, still working on the loans in the meantime. One customer, with a very new loan book, reentered the loans from scratch, thereby retaining the full history of those loans.</p>\n<p>The first step is usually data cleansing on the source platform and then a test upload via a staging post to validate the process from a technical perspective. This will give an initial indication of data quality, potential issues and the scope of the task.</p>\n<p>This is repeated in iterative steps, with validation reports, until a point is reached where those reports show that the issues have been removed. At this point there is an acceptance test phase, ahead of the full migration.&nbsp;</p>\n<p>The process is a joint one, between Ohpen and the customer, with the latter becoming more self-sufficient over the course of the project. Ohpen has refined its approach and tools over its multiple, varied projects so that, while it will never under-estimate the challenge, it is also confident that data migration should be a relatively painless part of legacy system renewal.</p>\n<p><strong>Conclusion</strong></p>\n<p>All of the above are important but if there is one other vital success factor, it is a local presence and deep business domain knowledge. Ultimately, this allows customer and supplier to speak the same language, removes scope for confusion and creates a partnership approach that can last long after the legacy system has been replaced.&nbsp;</p>\n<p><em>Written by </em><em>Martin Whybrow, Next Gen Core Banking Solutions</em></p>","desktop_body":"<p><strong>What prompts institutions to finally replace their legacy systems and what are the success factors when embarking on that journey? asks Jo Triest, Ohpen Belgium&#x2019;s managing director </strong></p>\n<p>What is it that finally prompts financial services companies to replace their legacy systems? Tough decisions have often been put off; old systems have been patched up and given a stay of execution. However, today&#x2019;s sector is faster moving than ever before. Customers expect the same convenience and speed as they experience in the rest of their lives. The high costs, lack of resources, manual workarounds and limited functionality of those old platforms, plus their closed nature, make them ever less suited to this digital era.&#xA0; &#xA0;&#xA0;</p>\n<p><strong>Trigger points</strong></p>\n<p>One reason legacy system replacement can often finally be triggered is lack of automation. This might be due to increased volumes and/or complexity. There is often scope to bring much greater levels of automation to resource-heavy areas such as management of direct debits or contractual rate revisions.</p>\n<p>Lack of straight-through processing also has competitive implications where rapid decision-making is paramount. The ability to provide loan approvals in minutes, not hours or days, becomes an important competitive advantage. The application process can become a fully digital one, with greater levels of self-service for customers and calls via the API layer to third-party sources for related data and documents.</p>\n<p>Another competitive element is time-to-market for new products and the ability to tailor offerings for particular customers or customer segments, providing timely and relevant offers at the moment they are needed. This puts a lot of pressure on old systems, where their monolithic and hard-coded nature means long lead-times between planning and delivering new products.</p>\n<p>Regulatory requirements only increase and might be another factor, while the loss of internal expertise and the inability to access external resources is also a common factor.</p>\n<p><strong>The replacement challenges &#x2013; real and imagined</strong></p>\n<p>Firstly, it doesn&#x2019;t need to be a &#x201C;big bang&#x201D; rip and replace. Components can be introduced that relieve some of the pain points and allow a phased migration. Functionality or loan books can be moved across in a planned, risk averse manner, with lessons from one phase then passed to the next.</p>\n<p>There is also a belief that, for all the issues, at least the legacy systems are understood and constitute a good fit. However, the configurability of today&#x2019;s modern systems mean that they can be much more easily molded both to the current processes but also to better ways of working.</p>\n<p>At Ohpen, in any project, we would look to set up a sandbox environment within a few weeks of the start of the project. This gives customers early hands-on experience with the system and allows it to be configured on a partnership basis. The project can use a prototype model, with fast feedback loops, thereby avoiding later unwelcome surprises. In parallel, users gain important training from the outset of the project, familiarising themselves with the new system.</p>\n<p>That configuration can either initially be for a &#x201C;like-for-like&#x201D; replication of current processes, with a reengineering of these towards best practice after the go-live, or that reengineering can be done as part of the implementation. &#xA0;&#xA0;</p>\n<p>Integration is a focus from the start of any project and can be a challenge, particularly where the existing interdependencies are not well understood. The Ohpen platform uses REST API web services that make for a much more open environment.</p>\n<p><strong>Data Migration &#x2013; a project headache?</strong></p>\n<p>Then there&#x2019;s data migration. So long as this is done in a planned, methodical way, using a framework approach, it need not be the headache that many assume. Whether it is onboarding a new loan book onto the existing system of a service provider or the replacement of a legacy platform at an individual lender, Ohpen&#x2019;s experience shows that it can be a relatively automated and painless process.</p>\n<p>The size of the data migration is not important, it is the quality and complexity of that data. It is perfectly feasible to complete a migration in a couple of months. This is true even for an area such as buy-to-let lending, with likely considerably more data and complexity than, say, a straightforward consumer loan. For a buy-to-let book, there could be complex structures related to collateral or multiple borrowers, for instance.</p>\n<p>There are other factors to consider. In particular, there might be a lack of knowledge and documentation within an institution about the legacy platform, which can add to the challenge.&#xA0;</p>\n<p>There are also decisions to be made, such as whether to take a snapshot of the loan book or migrate on a phased basis, still working on the loans in the meantime. One customer, with a very new loan book, reentered the loans from scratch, thereby retaining the full history of those loans.</p>\n<p>The first step is usually data cleansing on the source platform and then a test upload via a staging post to validate the process from a technical perspective. This will give an initial indication of data quality, potential issues and the scope of the task.</p>\n<p>This is repeated in iterative steps, with validation reports, until a point is reached where those reports show that the issues have been removed. At this point there is an acceptance test phase, ahead of the full migration.&#xA0;</p>\n<p>The process is a joint one, between Ohpen and the customer, with the latter becoming more self-sufficient over the course of the project. Ohpen has refined its approach and tools over its multiple, varied projects so that, while it will never under-estimate the challenge, it is also confident that data migration should be a relatively painless part of legacy system renewal.</p>\n<p><strong>Conclusion</strong></p>\n<p>All of the above are important but if there is one other vital success factor, it is a local presence and deep business domain knowledge. Ultimately, this allows customer and supplier to speak the same language, removes scope for confusion and creates a partnership approach that can last long after the legacy system has been replaced.&#xA0;</p>\n<p><em>Written by </em><em>Martin Whybrow, Next Gen Core Banking Solutions</em></p>","date":"2021-04-30","city":"Amsterdam","media":null,"thumbnail":{"data":{"url":"https://ohpen-cms.s3-eu-west-1.amazonaws.com/9d52edb6-5a57-4ca5-90e8-7f800539a96f.jpg"}},"desktop_images":[]}},"pageContext":{"id":"a0a58de9-3daf-52b6-8665-398b9dfed41d","language":"en","i18n":{"language":"en","languages":["en"],"defaultLanguage":"en","routed":false,"resources":{"en":{"translation":{"global.please-do-not-change":"Copy 30","global.quickmenu_platform":"OUR PLATFORM","global.quickmenu_dna":"OUR DNA","global.cursor_next_button_cta":"NEXT","global.menu_platform":"OUR PLATFORM","global.menu_platform_subtext":"Experience limitless freedom","global.menu_dna":"OUR DNA","global.menu_dna_subtext":"Our mission, mentality, people","global.menu_contact":"CONTACT US","global.menu_contact_subtext":"Talk to us live or book a meeting","global.menu_sub_careers":"CAREERS","global.menu_sub_news":"NEWS","global.menu_sub_privacy":"PRIVACY POLICY","global.contact_super":"Contact us","global.contact_title":"IT’S TIME FOR A CHANGE","global.contact_body":"Get in touch. 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Your health matters - not only physical, but also mental. We offer all our Ohpeneers the opportunity to clear their minds in the office or at home. Choose from a wide variety of classes like Kickboxing, High Intensity Training, Yoga, Yoga or Meditation. At our office in Amsterdam we even have a 4.000 square foot gym at your disposal.","careers.health_cta_1":"Find your balance","careers.play_super":"Find your balance","careers.play_title":"LIVE IN BALANCE","careers.play_body":"At Ohpen we are serious about a good work life balance. We want to make sure you enjoy work as well as your personal life. Because we believe your best ideas will come from being in balance with both.","careers.play_cta_1":"Ohpen to Vegas","careers.hotel_super":"You're invited","careers.hotel_title":"come and stay","careers.hotel_body":"We're an international bunch, but Ohpen's head office is in Amsterdam. We want to make it easy for all our Ohpeneers to visit HQ, so if you ever need to be there, just stay at the Ohpen Hotel. The hotel is situated in the heart of the city and is free of charge for all invitees.","careers.hotel_cta_1":"Find your mission","careers.mission_title":"Join our mission","careers.mission_body":"We're here to develop the best core banking engine in the world. Sound exciting? Learn more about life at Ohpen and find your next mission.","clients.clients_header":"Clients & Cases","clients.clients_body":"Leading financial service providers trust their critical business processes to Ohpen's platform.","news.news_header":"Latest insights","news.news_body":"Here we share our insights, opinions and the latest company and product developments.","global.menu_sub_cases":"CLIENTS & CASES","global.menu_sub_mediakit":"MEDIA KIT","careers.filter_location":"by location","careers.filter_department":"by department","careers.filter_title":"FILTER RESULTS","careers.overview_super":"Join our mission","careers.overview_title":"All job openings","careers.overview_noresults_super":"No results (yet)","careers.overview_noresults_title":"Try adding or removing selected filters","cases.testimonials_fullstory":"See all cases","careers.filter_close":"Apply Filters","careers.filter_remove":"Remove filters","cases.freedom_super":"Don't just take our word for it","cases.freedom_title":"Freedom for our clients","cases.freedom_body":"We’re proud to support a wide variety of clients such as retail banks, asset managers, insurers, mortgage providers, pension providers and building societies.","cases.freedom_cta_1":"View client cases","global.menu_sub_team":"THE TEAM","careers.play_cta_2":"The Ohpen Hotel"}}},"originalPath":"/latest-insights/article/migration-from-legacy-common-challenges-best-practices","path":"/latest-insights/article/migration-from-legacy-common-challenges-best-practices"}}}}