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Converting bits and bytes: data conversions have become more frequent. Yet, many insurance companies are not very good at it, argues one expert, who offers guidance in navigating the pitfalls of data conversion.

Though the saying "knowledge is power," may sound cliche, especially in risk management, it's true. Our industry relies on knowledge and information to make critical risk decisions and the quality of our data becomes the linchpin to evaluating and determining acceptable risk.

So, when faced with the inevitable need to move data from one system to another (whether new technology is being introduced or system consolidation is the objective) quality data conversions become a key component to ensuring a smooth transition with minimal business interruption.

Unfortunately, insurance companies don't typically do enough data conversions to become proficient, with the task often viewed as a necessary evil.

The seemingly simple process of transferring data from one system to another while ensuring its integrity and accuracy is often viewed by insurance companies as a complex mystery offering its own set of risks. And, when risk managers are depending on their carrier, broker or TPA to provide accurate and complete information, data conversions become everybody's business. The quality of the results often determine the success or failure of the original initiative.

In this era of mergers and acquisitions, selling and buying books of business, and new technology opportunities; data conversions have become more frequent, but with many firms inadequately prepared to undertake the effort with any degree of confidence.

The traditional approach of dedicating a high number of scarce IT resources to the effort has been proven time and again to be fraught with problems, ranging from cost overruns to poor data quality results. In-house IT personnel rarely jump at an opportunity to participate in data conversion projects, as this one-time effort adds no value to their professional resume and offers them little technical challenge.

Faced with the unpleasant, but necessary data conversion effort, there is no need to start from scratch. Applying the experience of others who've already fought the fight and learned the tough lessons can significantly simplify an otherwise complex and laborious task.

Taking the effort to find conversion automation software and data conversion experts will save time and money, while avoiding costly mistakes. Subsequently, the in-house IT experts can focus on mission-critical processing needs without the distraction of the time and effort of a one-time conversion project.

Data conversions are not a technology issue alone. In fact, first and foremost, the accuracy and availability of data is a business issue. So, why not involve the business experts and gain the benefit of their perspective of the data? They know better than anyone how the data is used and what business results to expect. Who better to validate the accuracy of the conversion than someone intimately familiar with the data itself? Every conversion effort will almost certainly require some amount of data clean-up, and utilizing the available business expertise will only accelerate the effort and lead to a higher quality resulting data set.

Conversions are often accomplished by taking a file from the original system, testing and cleansing the data, and reloading the data to the new system. Once the transfer is completed, the nightly cycle is typically run, and more times than not, questionable data are uncovered. If the cycle cannot be completed, service may be interrupted and processing errors may occur, resulting in less-than-satisfied clients. Often, the old system needs to be brought back into production to keep the business up and running-one step forward, two steps back! All the while, more time and money will be spent trying to 'figure out' what went wrong, why and where.

To get the best results and minimize operational disruptions, the data should always be 'mapped' from the target system back to the source system. That's sometimes accomplished by having the conversion program actually simulate the customer service representative keyboarding the transactions. This approach enables the new system to replicate the transactions in the proper sequence, invoke cross-checks and edits, and ensure the greatest data integrity of each piece of data prior to committing it to the database.

The time and effort spent planning and preparing will often determine the data conversion winners and losers. Although it will take time, a wise investment is to evaluate, audit and clean the data to be converted. Finding and fixing the questionable data earlier helps avoid costly processing and data errors later. And, balancing the resulting financial data (claims, scheduled payouts, cash values, premiums, etc.) is a critical crosscheck for every conversion effort.

Since data conversions are a necessary evil and are part of virtually every organization's future, why not make them as pain-free and efficient as possible? Each data conversion doesn't need to feel like it's your first. It's just a matter of planning, preparation, and getting the right team, process, methodology and software and in place.

Jerry Kaul is vice president of marketing and business development with Universal Conversion Technologies. Jerry can be reached at 214.348.2000 or jkaul@
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Title Annotation:Industry Risk Report
Author:Kaul, Jerry
Publication:Risk & Insurance
Date:Apr 1, 2004
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