How to Get Better Results from Your ‘Lift and Shift’ Project

The typical notion of ‘Lift and Shift’ is often simply a catch-all route applied to any cloud migration. It broadly refers to moving an application and its associated data from an on-prem center to a cloud platform, while retaining the same architecture, sizing and configuration.

But the term is regularly used in a far broader way. It also often refers to moving an entire software application as it is to an upgraded or superior version - even if the move is on-prem to on-prem, or cloud to cloud. But the term gets so frequently overused it creates the perception of low-level complexity or minimal effort during implementation.

As a result, the overuse creates low expectations around business outcomes – modest enhancements to decisioning and processes, which take advantage of incremental capabilities delivered by the new system. In other words, lower levels of implementation effort justify expectations of reduced ROI – if there’s even any at all.

Why ‘Lift and Shift’ Projects Take Longer, Cost More and Deliver Less

Expectations for a ‘Lift and Shift’ software implementation project typically include:

• Design, configuration, and testing will be fast and painless - pretty much just copy and paste.
• Interfaces with both downstream and upstream systems will remain almost unaltered.
• Given the input data is exactly the same, calculations and decisions delivered by the new software will be identical to the old system.
• There will be little or no enhancement to decisioning and processes that take advantage of incremental capabilities brought in by the new system.
• Provided the above, business users - Credit Risk, Operations, Compliance - will not be materially impacted during the course of the project.
• Transition to the new system will be totally transparent for operations and customer-facing staff.

In summary, there’s a misconception that ‘Lift and Shift’ will be a picnic.

But experience tells us the preconceptions of a typical ‘Lift and Shift’ implementation are rarely met in the real world. In fact, these types of software implementation projects are far more than simply just ‘lifting and shifting’ for numerous reasons.

• Input data structure and new fields in the new system might not be exactly the same, as source systems may have been updated, revised or replaced.
• New data lakes or data warehouses already in place may be in the midst of an upgrade or replacement.
• Input and output data language might be different in the new system as the old one may be outdated.
• Internal algorithms and functions – such as scores, affordability calculations or limit allocation logic - may not return the same results as in the old system.
• Extended user skills may be required to properly run the new technologies to make the most of their capabilities.
• Further updates may be required to align the new technology with existing systems, disrupting the operating models of customer-facing and operations staff.

When this happens - and the level of implementation effort is not as low as expected - a question mark immediately hangs over the reduced expectation of ROI. Was it really worth giving up the opportunity to achieve greater enhancement in decision-making and processes at the time of system migration?

That said, there are still many organizations where a ‘Lift and Shift’ approach to software implementation makes all the sense in the world. Typically, these enterprises are already analytically and technologically advanced, with sophisticated processes and decision-making in place. It may also be there is little room for incremental automation and the potential uplift from changes in decision-making is negligible.

Moving from ‘Lift and Shift’ to ‘Lift, Shift and Enhance’

For the vast majority of organizations migrating to a new system with expanded capabilities, it is an opportunity to help kick-start the journey to greater prosperity.

At FICO, many of our clients migrating from their legacy on-prem point solutions to our cloud-based FICO Platform realize the tremendous impact the expanded capabilities can bring in significantly improving their decisioning, orchestrating, or processing outputs, and consequently their business outcomes, growth and success.

For example, 'Lift, Shift and Enhance' drove mortgage growth for one EMEA lender, thanks to 90% automation and increased approvals of US$2.8 million - all without undermining risk exposure.

In this instance, our client opted to implement FICO originations software to replace obsolete legacy technology. But during the pre-implementation assessment it quickly became clear the bank's legacy decisioning was significantly hampering mortgage approvals for good quality credit applicants.

As a result, originations strategies were adjusted following analysis from a combination of expert know-how and data-driven insights, which helped inform the most appropriate 'Lift & Shift and Enhance' route to software implementation.

The bank's results spoke for themselves. It quickly emerged mortgage decision automation rates had soared from 65% to 90% - without detriment to risk quality. Annual yields from increased approvals were estimated to be around US$2.8 million.

The Four Pillars of ‘Lift, Shift and Enhance’

Data

• Break down data silos and create a rich, contextualized view of your customers and organization.
• Access more data, and more data types, from both internal and external sources to produce more accurate decisions.
• Ingest alternative data from non-traditional sources to expand analytics predictive power and afford precise decisions for thin-file and no-file customers promoting financial inclusion in the process.
• Process and make the most of granular transactional data to strengthen and refine analytics capabilities to help deliver ever-more accurate affordability calculations.
• Capture data as events happen in real-time. Insights can further complement the traditional cycle-based or end-of-month batch processing models.
• Streamline and orchestrate data access to various internal and external sources, enabling stakeholders from different business areas to make appropriate and better-informed decisions where it matters.
• Future-proof the whole decisioning platform for planned expanded capabilities. 

Insights

• Keep customer profiles up to date, outsmart competitors, create better customer journeys, respond faster to opportunities and build a learning culture.
• Add greater sophistication to analytics with new AI and machine learning models to draw actionable insights, strengthen customer strategies and enable smarter, faster, more profitable decisions.
• Expand analytics to more areas in the institution – be it transactional analytics, pricing elasticity, income and affordability estimation, attrition, customer lifetime value or link analysis.
• Take advantage of applied optimization models to expedite decisioning evolution and maximize return across the entire credit lifecycle.

Actions

• Combine insights from human and machine intelligence to deliver smarter decisions and hyper-personalized experiences which can maximize return-on-information.
• Make impactful actions when they matter the most, introducing real-time event-driven decisioning across all channels and throughout the entire customer lifecycle.
• Take advantage of superior technology and innovation to enhance decisions. Many bad decisions may simply be a result of poor technological capabilities.
• Rationalize logic and move from a rule-driven to an analytic-driven approach for increased decision automation and precision.
• Evaluate the full customer experience and lifecycle to provide consistent decisions and communications aligned across business areas and credit lifecycle stages.
• Create an omnichannel framework to enable every individual transaction – be it a credit application, insurance offer, customer service claim or any other across the different areas of the business - to move seamlessly across digital self-service as well as more ‘traditional channels’ to enhance customer experience and meet customer preferences.

Outcomes

• Ensure strategies consistently maximize their return by keeping a profound analytical understanding of data, decisions, actions, and their outcomes through upgraded reporting capabilities.
• Institutionalize test and learn champion-challenger methodology to drive a program of continual strategy evolution within a controlled learning environment.
• Take advantage of expanded outcome simulation capabilities to investigate the expected impact of changes within complex analytical decisioning solutions before deploying them into production. Stress-test predictive models alone or complete decision strategies against changing market conditions or changes in the models themselves.
• Create an enhanced reporting framework to provide the appropriate level of detail for all the various stakeholders within the enterprise, to clearly understand how the business is performing against the established targets so, if necessary, appropriate corrective or pre-emptive measures can be promptly adopted at any time.
• Set up a robust governance framework on your operating model around process, people, and systems.

If your organization is one of the few already enjoying these features and capabilities, congratulations! You are in a privileged position and likely to dominate your market for the next few years.

But if it’s still deemed to be far, far away from a decisioning paradise, or want to move to a new decisioning platform with augmented capabilities to be a resounding success – arguably the only option – is to embrace a ‘Lift, Shift and Enhance’ approach.

At FICO, we are here to support throughout the process, making any migration as painless as possible to supporting in making the most of the advanced capabilities to ensure better business outcomes.

How FICO Can Help Your Digital Transformation Succeed

• Explore innovation with FICO Platform
• Watch the video “FICO® Platform: Applied Intelligence, when and where it matters”
• Read the whitepaper “FICO® Enterprise Intelligence Network: Redefining the next generation of applied intelligence”
• See customers discuss their use of FICO Platform
• Read the article from The Journal of Digital Banking, “How Financial Services Leaders Are Using Enterprise Intelligence to Optimize Efficiency Ratios”
• Read the blog Three Ways to Justify Digital Transformation Investment to the C-Suite
• Making Digital Transformation Pay Off
• Watch FICO Platform in action with the story of your everyday consumer, Digital Jane